New-home construction in the U.S. fell more than forecast in November after surging a month earlier to a nine-year high, indicating fitful progress in residential real estate.

Residential starts slumped 18.7 percent to a 1.09 million annualized rate last month after rising to a 1.34 million pace, Commerce Department data showed Friday. The median projection in a Bloomberg survey called for a 1.23 million pace in November. Ground-breaking jumped 27.4 percent in October, the most since July 1982. Permits, a proxy for future construction, also fell last month on fewer applications to build apartments.

Even with the decline, homebuilding so far this quarter is running at a faster pace on average than it was in the previous three months and permits for single-family properties rose. While challenged by a recent increase in mortgage rates, limited numbers of skilled workers and shortages of available lots, builder sentiment surged in December on optimism that President-elect Donald Trump will ease regulatory burdens.

“The current message is one of optimism that single-family starts are going to continue to gain ground in the months ahead,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, said in a research note before the report. “Whether recent sharp rises in interest rates have a dampening effect remains to be seen.”

Economists’ estimates in the Bloomberg survey ranged from 1.13 million to 1.32 million after a previously reported October pace of 1.32 million pace. Starts decreased in all four regions last month.

The report showed a wide range for error, with a 90 percent chance that last month’s figure was between a 12 percent and 25.4 percent decline.

Builder Sentiment

The starts data, while very volatile from month to month, follow other figures indicating steady improvement in residential real estate, including a surge in homebuilder sentiment to the highest since July 2005, according to National Association of Home Builders/Wells Fargo released Thursday.

Permits dropped 4.7 percent to a 1.2 million annualized rate, reflecting a 13 percent slide in applications for multifamily dwellings. Permits for one-family homes climbed 0.5 percent, the fourth straight gain.

Construction of single-family houses dropped 4.1 percent to an 828,000 rate from 863,000 in October.

Groundbreaking on multifamily homes, such as townhouses and apartment buildings, decreased 45.1 percent to an annual rate of 262,000 after a 76 percent surge in October. Data on these projects, which typically have led housing starts over the past few years, can be especially fickle.

A boost in mortgage rates from historical lows could act as a brake on sales and construction. The average 30-year mortgage rate climbed to 4.16 percent in the week ended Thursday, the highest since October 2014, according to Freddie Mac data.