Low interest rates and an improving real estate market continue to encourage house and apartment construction in the Twin Cities, with the most building permits issued in September in five years.

Last month, 413 permits were issued to build 666 units in the Twin Cities, according to the Builders Association of the Twin Cities (BATC). Almost 90 percent more units were permitted in September 2012 than in September 2011.

The value of those permits continues to rise. While there were more permits pulled in June (465) and more permitted units in July and August (783 and 901, respectively), the value of the September permits was the highest of the year -- at $148.7 million.

Through the first three quarters of 2012, the value of permitted units rose to $1.1 billion, a 48.7 percent increase in value over the same period in 2011. The nine-month performance marked the first time the value of permitted units has exceeded $1 billion in past five years.

"Reports from our fall Parade of Homes confirm that the new-construction market is doing better than it has in some time," said BATC President Curt Christensen, owner of Lee Lyn Construction. "Most of our builders reported strong traffic to their models and -- even better -- plenty of buyers were out looking."

Hans Hagen, president of Hans Hagen Homes Inc., said that September was the best in several years. He said that traffic to his model homes in Blaine was up more than 50 percent during the month and that sales have increased 100 percent.

Blaine has been a bright spot for single-home construction. In September, it produced the second-most permits for the month with 24, and year-to-date it has 287. Woodbury, the next most-active city, had 20 permits last months and 182 year-to-date.

Minneapolis leads in the number of permitted units with 1,200 this year to date, most of them apartments.

Patrick Kennedy • 612-673-7926