Ground breaking for new homes jumped 13.3 percent to a seasonally adjusted annual rate of 1.84 million units last month -- the highest level since June 1986 -- from an upwardly revised 1.627 million rate in August.
This marked the biggest monthly increase since a 14.1 percent climb in July 1995.
Single-family housing starts, the biggest category of building, rose to a 1.48 million unit annual rate, the highest level since November 1978. Multifamily starts fell 4.4 percent to a rate of 329,000 in September.
Starts gained across the country, rising 9.5 percent in the Northeast, 9.8 percent in the South, 11.4 percent in the Midwest and 24.2 percent in the West.
The Commerce Department said developers' inventories of single-family houses permitted but not started hit the highest level in more than 15 years in August, with 101,000 units. However, that level dropped to 90,600 units in September. That reduction in inventories helped boost the single-family starts number in September, the Department said.