WASHINGTON (Reuters) - U.S. construction spending increased more than expected in August as historically low interest rates boosted homebuilding. The Commerce Department said on Thursday that construction spending jumped 1.4%. Data for July was revised higher to show construction outlays increasing 0.7% instead of edging up 0.1% as previously reported. Economists polled by Reuters had forecast construction spending gaining 0.8% in August. Construction spending shot up 2.5% on a year-on-year basis. Spending on private construction projects surged 1.9%, fueled by investment in homebuilding amid record-low mortgage rates and a pandemic-driven migration to suburbs and low density areas. Spending on residential projects accelerated 3.7%, eclipsing a 0.3% drop in outlays on nonresidential construction projects such as manufacturing and power plants. Spending on public construction projects nudged up 0.1%.