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U.S. housing starts unexpectedly rose 3 percent in October -- the biggest gain in eight months, the Commerce Department reported. The jump was attributed to increased activity in the condominium market, which offset the weakest construction of single-family homes since 1991.
Builders broke ground on 1.229 million homes last month. Construction of single-family homes dropped 7.3 percent, while multi-family home construction jumped 44 percent.
In addition, building permits were down 6.6 percent to 1.178 million, the lowest level in 14 years and below the 1.2 million units economists had projected.
Home construction will drop at a 22 percent annual pace this quarter, the most since the last three months of 1981, according to a forecast by economists at Lehman Brothers Holdings.
Further, foreclosures doubled in September from a year earlier as subprime borrowers struggled to make payments on adjustable-rate mortgages, RealtyTrac said last month.