A small increase in multi-family permit issuance in September was not able to offset the unexepected 3% seasonally-adjusted monthly decline in single-family permits during the same month. In total, residential construction permits were off by 1.2% from August, not a huge decline but one not expected by Wall Street, and not a welcome one when many in the industry are looking for a more signs of stabilization. While permits are a measure of supply, they tend to be a reflection upon the sentiments of home builders in assessing upcoming housing demand.

The number of single-family permits issued in September was 15% lower than the level seen in September 2008 and 47% lower than two years ago.

According to state level data, which lag the national figure by one month, each of the top five single-family permit issuance states in August were down between 2% and 25% from the level seen in August 2008. Texas held on to the top spot, with well over double the number of permits of the next ranked state - Florida.

Meanwhile, the number of multifamily building permits issued (5+ units) increased in September, rising 7% to 104,000 units permitted. On a year-over-year basis, multifamily permit issuance was down 57% from September 2008 and 71% below the September 2007 figure.

Permit issuance for buildings with 2 to 4 units was even with August at 19,000 units permitted during the month, but 50% below the level seen last month and 62% below the level seen two years ago in August.

State level data, which lag one month behind the national figure, indicate that in August multifamily permit issuance decreased by 78% in Texas from the level seen during the same month last year. At the bottom of the list, permit activity in Alabama in this segment was 205% above the year ago level.

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