WASHINGTON (AP) — U.S. construction spending rose 0.5% in September, boosted by government and private residential projects.

Private residential construction spending increased 0.6%, the third straight month of gains following declines in April, May and June. Spending on single family home construction rose 1.3%, more than enough to offset the 0.7% drop in apartments and multi-family home building.

September’s overall construction spending was higher than forecast, with analysts surveyed by FactSet expecting a rise of just 0.2%. The September rebound comes as the previous August gain of 0.1% was revised to a decline of 0.3%.

Last month, the Commerce Department reported that housing starts fell 9.4% in September, but that was following a 12.3% surge in August. Construction of both homes and apartments has risen 1.6% in the past year, suggesting the housing market remains solid.

Lower mortgage rates and a healthy job market with rising wages have boosted home sales and the demand for new homes. The average interest rate on a 30-year mortgage has risen slightly the past few weeks, but is still low at 3.78%.

The Labor Department reported Friday that the unemployment rate ticked up from 3.5% to 3.6%, remaining near a five-decade low.

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Commerce said Friday that government construction spending rose 1.5% during the month, with state and local building offsetting declines in federal spending. Power and water projects saw the sharpest increases.

Overall construction spending after adjusting for seasonal variations came in at an annual rate of $1.29 trillion, 2 percent lower than September 2018.

During the first nine months of 2019, U.S. construction spending was $968.7 billion, a drop of 2.2% from the first nine months of 2018.