More new residential units were started in September than any month since July 2008, blowing away expectations and making national headlines for the resurgence in home construction.

The number of new privately owned housing units that began construction was up for the third straight month.  Starts reached 872,000 units, above the 770,000 expected by a Bloomberg survey of economists and surpassed by 15 percent the upwardly revised to a 758,000 unit rate in August   September starts also exceeded September 2011 by 34.8 percent, the Commerce Department said yesterday,

Building permits, a precursor of future construction activity, also bounced back, up 11.6 percent from August and 45.1 percent from a year earlier. Building permits reached 894,000 units in September.  The increase in building permits suggests the gains in starts will be sustained for months to come.

Single-family starts were a major component of the increase, coming in at an annualized rate of 603,000 units during September, which is 11 percent above August and fully 27.3 percent more than the same month last year. Apartment starts (five units or more) were up 22.8 percent month-over-month and nearly doubled year-over-year, up 93.4 percent, though they tend to be jumpy.

The single family construction numbers are a positive sign for the market as they suggest that homebuilders feel confident in low inventories and are willing to delve back into the market despite tight financing that often requires self-funding of projects.  On Tuesday, the National Assn. of Home Builders/Wells Fargo Housing Market Index showed that builder confidence in the market for new single-family homes rose for the sixth straight month to its highest level since mid-2006.

“It’s no longer a question of whether the industry is rebounding,” Larry Sorsby, chief financial officer of Red Bank, New Jersey-based Hovnanian Enterprises Inc. (HOV), the best-performing homebuilding stock this year, told Bloomberg News in a telephone interview. “There is clear evidence that we have bounced off the bottom and are in the midst of a recovery.”

The September new starts report was “surprisingly strong,” said David Crowe, chief economist at the National Assn. of Home Builders.  “As consumer confidence rises and jobs return, more local markets and more consumers will join the buyer market and I expect housing construction to continue a modest but fairly steady rise throughout 2013 and into 2014,” Crowe wrote in a blog post.

While the annual rate of new home starts still is far below the peak of more than 2.2 million units reached in early 2006 during the peak of the housing bubble, the pace has picked up dramatically from the low of 478,000 in April 2009, and is up sharply from the 706,000 annual rate in May.