New home starts in the United States took a nosedive in October after hitting a 16-year high the month before.

On Wednesday, the U.S. Commerce Department reported a drop to an annual rate of 1.6 million in October compared to 1.81 million a month earlier.
The big decline was due to cold, wet weather in most of the country. Starts rose in the West, where building weather was better, said Newport Communications Senior Economist Jim Haughey. "Also, apartment starts fell 31% after a surge in September, which reflects this sector?s volatility."
Haughey said the housing market remains strong and is likely to perk up again in the next few months.
"October permits rose slightly to 1.76 million, indicating that there is a backlog of homes to be started. The number of homes under construction continues at a record level, and the inventory of new homes is extremely low," he said. "Residential construction spending may rise in October because of the continuing work on houses started earlier and the expanding remodeling market. This assures that construction-related freight will remain strong through the winter with modest growth likely. It also means that the demand for vocational trucks for contractors and utilities should pick up through the winter.
According to Haughey, the biggest impact of the strong housing market on freight continues to be the up to $20 billion a month that consumers are taking out of their home equity when they refinance to lower their mortgage rates.
"Nearly 80% of mortgage applications last week were for refinancing, up 8 percentage points from just before the recently announced interest rate cuts by the Fed," he said.