After two months of increases, groundbreaking decreased nearly six percent to a seasonally adjusted annual pace of 1.14 million units, according to data from the Commerce Department.
Reuters reports that even despite the dip, a rebound in permits for single-family houses still indicates a demand for housing. Permits for single-family homes rose 3.7 percent to a 737,000-unit pace.
Demand for housing is being driven by a tightening labor market, which is lifting wages. A survey of homebuilders published on Monday showed confidence hitting an 11-month high in September, with builders bullish about current sales now and over the next six months, as well as prospective buyer traffic.
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