U.S. homebuilding fell for a second straight month in August as a rebound in the construction of single-family houses was offset by persistent weakness in the volatile multifamily home segment.

Housing starts slipped 0.8 percent to a seasonally adjusted annual rate of 1.18 million units, the Commerce Department said on Tuesday. July’s sales pace was revised up to 1.19 million units from the previously reported 1.16 million units.

Homebuilding has been treading water for much of this year amid shortages of land and skilled labor as well as rising costs of building materials.

Building permits surged 5.7 percent to a rate of 1.30 million units in August, the highest level since January. Single-family home permits fell 1.5 percent, while permits for the construction of multi-family homes soared 19.6 percent.

The data suggested limited impact on permits from Hurricane Harvey, which lashed Texas in late August and caused unprecedented flooding in Houston. The Commerce Department said the response rate from areas affected by the storm “was not significantly lower.”

Starts could slump further in September in the aftermath of Harvey and Hurricane Irma, which struck Florida.

Though activity could pick up as the hurricane-ravaged communities rebuild, the dearth of labor is hobbling homebuilding. A survey Monday showed confidence among homebuilders fell in September amid concerns that the hurricanes could worsen the labor shortages and make building materials more expensive.

Economists polled by Reuters had forecast housing starts rising to a 1.18 million-unit pace last month. Investment in homebuilding contracted in the second quarter at its steepest pace in nearly seven years.

Housing subtracted 0.26 percentage point from second-quarter gross domestic product. Homebuilding rose 1.4 percent in August on a year-on-year basis. Housing is being supported by a labor market that is near full employment. In addition, mortgage rates remain close to historic lows.

Single-family homebuilding, which accounts for the largest share of the housing market, jumped 1.6 percent to a rate of 851,000 units in August. Single-family starts rose in the South and West, but fell in the Midwest and Northeast.

Groundbreaking on single-family housing projects has slowed since vaulting to near a 9-1/2-year high in February.

Last month, starts for the volatile multi-family housing segment tumbled 6.5 percent to a rate of 329,000 units.