Housing starts across the country rose sharply in September from August, driven largely by a 51.3 percent increase in multi-family housing starts, the U.S. Department of Commerce said today.

The news underscored the strength of the rental housing market as people displaced by the foreclosure crisis and those who have chose not to buy seek other options. The 15 percent month-to-month increase was the best reading in 17 months and gains were posted in all regions.

That report comes a day after the release of the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for October, which said that builder confidence posted the largest one-month gain since April 2010 when the home buyer tax credit program helped goose the market.

This was a national survey that got a boost from big gains particularly in the west, where foreclosure activity remains high, but has been relatively stable The Midwest fared moderately well compared with other regions. The NAHB's chairman, Bob Nielsen, said that builder confidence generally remains low because of restrictive lending policies that make it difficult for many buyers to qualify.

There's another issue: Many builders are also having trouble getting new houses to appraisal for what it costs to build and sell them. The survey asked builders for their perceptions of single-family home sales and sales expectations for the next six months. Most builders have shifted their description of the market from poor to fair; far fewer have gone from a fair to good. New home sales data for the Twin Cities metro area isn't available, but the latest local report on the industry is from the Builders Association of the Twin Cities. It said that during September, construction of single-family houses remained near historic lows while growing demand for new rental apartments is helping keep some contractors busy.