Housing starts in Japan jumped 21.1% in July, compared to the previous July, to 83,398 units, the highest level in more than two years.

Demand surged before the government ended a reward program for building energy-saving homes last month, the Ministry of Land, Infrastructure, Transport and Tourism reported.

The increase in July, which was the largest since the 54.2% increase back in September 2008, came in much stronger than the median economist forecast for a 4.8% rise.

Housing starts posted a fourth straight year on year rise in July after growing by 5.8% in June. The July level was the highest since the 84,277 units seen in November 2008.

The seasonally adjusted annualized rate of housing starts stood at 955,000 units in July, up from 817,000 units in June and marking the highest level since 963,000 recorded in December 2008.

The news comes as Japan’s lower house has elected former Finance Minister Yoshihiko Noda as the country’s new prime minister. He succeeds the unpopular Naoto Kan, who quit after 15 months in office. Noda will face a host of daunting problems, including how to fund the recovery from Japan’s devastating March 11 earthquake and tsunami, the ongoing nuclear crisis that resulted from the disaster, and the rapid strengthening of the nation’s currency on the international markets.