Construction of new homes fell in March by the largest amount in five months, with weakness in all regions of the country except the Northeast.

The Commerce Department says home construction dropped 8.8 percent to a seasonally adjusted annual rate of 1.09 million units. It was the third decline in the past four months and left construction at its slowest point since October.

Applications for permits to build new homes, a good indicator of future activity, dropped 7.7 percent in March to an annual rate of 1.09 million units.

Construction activity has been volatile this year, dropping in January and March but posting a 6.9 percent rise in February. Housing construction has been helping fuel the overall economy, and economists expect the sector to rebound in the coming months.