Housing Starts Drop, But Future Construction Looks Hopeful

WASHINGTON -- U.S. builders started slightly fewer homes in October but submitted plans for a wave of apartments, a mixed sign for the struggling housing market.

Builders broke ground on a seasonally adjusted annual rate of 628,000 homes last month, the Commerce Department said Thursday. That's roughly half the 1.2 million that economists equate with a healthy housing market.

But building permits, a gauge of future construction, rose nearly 11 percent. The increase was spurred by a 30 percent increase in apartment permits, which reached its highest level in three years.

Over the past year, apartment permits have surged roughly 63 percent. Single-family permits have increased just 6.6 percent in that span.

The Economy's 'Weak Link'

Renting has become a preferred option for many Americans who lost their jobs during the recession and were forced to leave their homes. The surge in apartments may help boost economic growth, but it has not been enough to offset the steep declines in single-family homebuilding.