State housing starts fell 9.6% in September.

But California new-home construction continued at a brisk pace, according to Bank of America economists. September’s housing starts were off from August, but the month’s figures were still among the highest recorded in the past five years. Despite the modest decline, construction activity in the next few months should be strong because of an “extraordinary” increase in new housing permits granted in September. Meanwhile, the bank reported that housing prices continue to climb, with the statewide average home price this year expected to be $116,000, about 3% higher than last year.