New home construction showed gains once again last month, signaling that that sector of the housing market is continuing to recover.

Housing starts climbed to a seasonally adjusted 894,000 in October, a monthly increase of 3.6 percent, according to a report Tuesday by the U.S. Census Bureau. Compared with October 2011, they were up 41.9 percent. It marked the largest increase in more than four years.

The biggest increase came in multi-family construction, which was up 11.9 percent. Single-family construction edged down 0.2 percent compared to September but was up 35.3 percent from October 2011. 

Housing permits, which are a leading indicator of construction activity, fell by 2.7 percent. Single-family construction permits were on the rise, improving 2.2 percent, while multi-family permits fell 10.6 percent.

“Today’s report bears out similar changes in other economic indicators that housing continues to recover at a slow but steady place, and is right in line with our expectations of modest month-to-month growth,” David Crowe, National Association of Home Builders chief economist, said in a statement. “However, we still have a long way to go to get back to normal production as inaccurate appraisals, tight lending conditions for home buyers and policy uncertainties continue to impede the recovery.”

All this positive news has made homebuilders more optimistic, according to a report Monday. The National Association of Home Builders said that builder confidence was at a six-year high.