A drop in the building of multifamily homes such as apartments and condominiums caused a major drop in housing starts in November, the NAHB said.

Overall housing production dropped 18.7 percent to a seasonally adjusted 1.09 million annual rate, the National Association of Home Builders said, citing U.S. government data.

The issuing of permits also declined 4.7 percent.

However, for the year overall, the trend is positive, said NAHB Chairman Ed Brady, a home builder from Bloomington, Illinois.

"Year-to-date, single-family starts are up 9.6 percent and the overall trend in this sector remains positive," he said. "Builder sentiment is strong and we can look forward to growth in the single-family market in the year ahead as the industry adds workers and lots and Washington policymakers provide regulatory relief for small businesses."

NAHB chief economist Robert Dietz said the housing market is healthy.

"Single-family starts declined from a robust level in October but still remain very solid," Dietz said. "Though rising mortgage rates could be a headwind for housing, we expect single-family production to continue on a long-run, gradual growth trend. Meanwhile, the multifamily sector, which has been volatile in recent months, is expected to level off at a solid rate as that market finds balance between supply and demand."