WASHINGTON (Associated Press) – While an extension on the homebuyer tax credit remains under discussion, building permit applications fell 1.2 percent and overall residential construction rose 0.5 percent in September.

Construction rose 7.1 percent across the South last month. On a national scale, construction of single-family homes rose 3.9 percent to an annual rate of 501,000, while multifamily construction fell 15.2 percent. Overall residential construction posted a seasonally adjusted annual rate of 590,000 units.

The National Association of Home Builders’ index of builder confidence fell from 19 in September to 18 in October, a slip that builders attribute to the upcoming expiration of the homebuyer tax credit.

Real estate agents and homebuilders are urging Congress to extend the $8,000 rebate for first-time homebuyers, but some analysts and lawmakers argue that most homebuyers who receive it would have bought a home anyway.

The Associated Press also reported that the number of tax returns fraudulently claiming eligibility for the $8,000 credit could jeopardize efforts to extend the program. As of the end of September, the IRS has frozen over 110,000 refunds pending civil or criminal examinations, identified 167 criminal schemes and commenced 115 criminal investigations.