WASHINGTON (

TheStreet

) -- Housing construction missed expectations in Septembers while permits, a key gauge for the future of the housing market, posted their biggest drop in five months.

The Commerce Department said housing starts inched up 0.5% during the month to a seasonally adjusted rate of 590,000 units. This fell short of economists' expectations of 610,000 units.

New applications for building permits slipped 1.2%, its biggest decline since a 2.5% tumble in April.

This data continues a week of disappointing news in the housing market. On Monday, the National Association of Realtors said

builder confidence slipped one point in October

to a level of 18, on fears of the upcoming expiration of the home-buyer tax credit.

-- Reported by Jeanine Poggi in New York

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