U.S. housing starts (search) slid 3.8 percent in August, the government said Wednesday in a report showing a trend of rising mortgage rates is cooling the housing boom.

However, the Commerce Department (search) also said permits to break new ground for single-family homes jumped 2.9 percent to a 1.475 million rate — a record high — as builders rushed to lock in building authorization before higher rates chase away buyers.

Housing starts slid to a seasonally adjusted annual rate of 1.820 million from an upwardly revised 17-year high of 1.892 million in July, Commerce said. It was the biggest drop since April, but the pace was in line with expectations of analysts polled by Reuters, who anticipated a 1.825 million pace.

Permits to build all types of dwellings soared to a 1.886 million annual pace, the highest level since December, and well ahead of the 1.803 million pace expected by analysts.

Starts fell 2.7 percent in the South and by 1.8 percent in the West, the two biggest regions for building. Starts fell 23.3 percent in the Northeast, the biggest drop in that region since May 2001, and rose 1 percent in the Midwest.

Mortgage interest rates have trended higher from four-decade lows recorded in June as markets began to anticipate the U.S. economic recovery gaining traction.

The popular 30-year fixed rate mortgage (search) had risen more than a percentage point to 6.44 percent from 5.21 percent in mid-June, according to mortgage finance company Freddie Mac. The average long-term home loan rate fell to 6.16 percent last week after reports showing job losses caused fresh anxiety about the economic recovery.

Many buyers have rushed to take advantage of historically low interest rates in anticipation rates will drift higher. Mortgage applications rose last week while the number of refinancings fell, a Mortgage Bankers Association of America report released earlier in the day said.