November’s housing starts numbers came in weaker than expected in November, in perhaps the first signal that rapidly rising interest rates are starting to negatively affect the real estate industry.

The new data came in stark contrast to what was a very bullish-looking October for home building. From Reuters:

Groundbreaking on new housing projects dropped 18.7 percent to a seasonally adjusted annual rate of 1.09 million units, the Commerce Department said on Friday. October’s starts were revised up to a 1.34 million-unit rate, the highest since July 2007.

Economists polled by Reuters had forecast housing starts slipping to a 1.23 million-unit rate in November from the previously reported 1.32 million pace. Starts fell in all four regions last month. Housing starts data is very volatile month-to-month.

Despite rising rates and slowing construction, home builders remain confident that 2017 will be a banner year:

The housing market remains on solid ground even as mortgage rates have jumped to more than two-year highs following the election of Donald Trump as the next president. A survey on Thursday showed homebuilders’ confidence in December hitting its highest level since July 2005, with builders anticipating strong sales.

Of course, homebuilders are notoriously bad at forecasting, so investors should probably take those survey results with a grain of salt.

The SPDR S&P Homebuilders ETF (NYSE:XHB) was unchanged in premarket trading Friday at $34.58. Year-to-date, the largest homebuilder-focused fund has gained just 1.17%, versus an 11.25% rise in the benchmark S&P 500 index during the same period.

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