Connecticut housing permits off dramatically in September.

The number of new housing units approved last month in Connecticut was down 32.9 percent compared to September 2016, according to data released Thursday by the state Department of Economic and Community Development.

There were 407 new housing units approved in September, compared to 541 during the same period in 2016. And yet despite the decline in new housing units approved, last month was the highest level of permit activity in the state since October 2016.

The number of housing permits issued in Connecticut over the first nine months of this year is down by 17 percent from the same period in 2016. There were 2,691 new housing units approved statewide over the first nine months of this year compared to 3,244 during the same period a year ago.

Windsor Locks led all of the 104 communities reporting monthly permit activity in September with 160 units. Milford led the New Haven area in housing permit activity last month with 12 units.

More than half of the number of housing units approved last month were for buildings with five or more units, DECD officials said. The demand for apartments remains strong, according to Donald Klepper-Smith, chief economist and director of research for New Haven-based DataCore Partners.

“You have a weak housing market right now because you’ve got slow labor growth,” Klepper-Smith said. “There is not a lot of spec building going on and flexible housing alternatives are desired. So we’re seeing a lot of transportation oriented housing being built.”

The lack of demand for new housing in Connecticut also speaks to inventory levels of existing homes, he said.

“We’re not looking at a situation where the state is overbuilt, but there still is a lot of inventory that remains,” Klepper-Smith said.

luther.turmelle@hearstmediact.com