US Housing starts tumbled in October to reach a seven-month low thanks to a major decline in the construction of multifamily homes. However, an increase in building permits indicates that the housing market is still solid.

Groundbreaking declined 11% to an annual pace of just 1.06 million units (seasonally adjusted). This is the lowest level for housing starts in seven months. With that said, October was the seventh straight month that housing starts were about 1 million units, which is the longest stretch for the housing market since 2000. In addition, the number of building permits issued jumped 4.1% to reach a rate of 1.15 million units.

The Mortgage Bankers Association also released a report that showed mortgage applications jumped 6.2% last week from the previous week.

In each of the last six quarters, housing has played a major role in GDP growth and is keenly watched by investors as a reliable indicator, along with employment, as to the health of the US economy.

The S&P’s homebuilding Index increased at the same pace as the broader U.S. stock market. The largest home builder in the U.S., D.R. Horton Inc. (DHI), was up 0.57%. Lennar Corp. (LEN) was also up 0.34%.

Economists projected housing starts to drop by a pace of 1.16 million units in October. Some economists believe that October’s weak numbers are related to labor and land shortages. Groundbreaking on single-family homes dropped 2.4% to reach a pace of 722,000 units which compounded concerns.