(CN) – Home construction ticked up slightly in October, but in a sign of weakness ahead for the sector, ground breakings for single-family homes fell, the Commerce Department said Tuesday.
The government said overall, new home construction rose 1.5 percent in October, to a seasonally adjusted annual rate of 1.23 million.
That’s up from 1.21 million in September. But there’s a caveat: the gains came entirely from apartments. Starts for single-family houses actually slipped 1.8 percent last month.
Housing has his a rough patch in recent months as mortgage rates have climbed, putting the ability to buy a home or move up to a more desirable property out of reach for more Americans.
A sharp increase in mortgage rates has led to a marked decline in home construction since May, such that ground breakings have fallen 2.6 percent over the past 12 months.
The average 30-year fixed rate mortgage has shot up a full percentage point in the past year to 4.94 percent, according to mortgage buyer Freddie Mac.
This benchmark rate is at its highest average since February 2011.
Permits, an indicator of future activity, declined 0.6 percent to an annual rate of 1.26 million. This pullback in construction has occurred as sales of new homes have begun to stall.
The annual rate of home sales has declined 15.3 percent since May, a striking reversal from the growth seen during the first five months of 2018, the Commerce Department said.
The Associated Press contributed to this report.