U.S. housing starts fell 5.6 percent in October as construction of both single-family and multifamily homes slid, while a drop in permits for future groundbreaking was the largest in more than six years, the government said on Thursday.

October housing starts declined to a 2.014 million unit annual rate, slower than the 2.070 million unit pace expected by Wall Street economists, who had anticipated rising mortgage rates would cool activity. The decrease in October starts, from an upwardly revised 2.134 million unit rate in September, was the largest percentage drop since March.

Single-family housing starts declined 3.7 percent to a 1.704 million unit pace while multifamily construction tumbled 14.8 percent to a 310,000 unit rate, according to the Commerce Department report.

Permits for future groundbreaking, an indicator of builder confidence, declined to a 2.071 million unit pace. That was down 6.7 percent from September, the biggest percentage decline since September 1999, when permits fell 7.2 percent, the Commerce Department said.

It said recent Gulf Coast hurricanes had minimal impact on the data.

Low mortgage rates have supported a five-year rally in the housing market, but borrowing costs have started to climb. Mortgage finance company Freddie Mac said the 30-year fixed-rate mortgage averaged 6.36 percent last week, up from 5.76 percent a year ago.

Economists say higher rates should dampen homebuyer demand and cool off the housing market, and recent months' housing data has begun to indicate some moderation in the sector.

Housing starts declined throughout the United States in October, dropping 10.8 percent in the West, 10.5 percent in the Midwest, 7.5 percent in the Northeast and 0.5 percent in the South. Permits for new construction fell in all regions except the Midwest, which reported a 1.7 percent increase.