WASHINGTON – Home construction tumbled at double the rate expected during October, while industrial production surged as the Gulf Coast recovers from hurricanes Katrina and Rita.

Housing starts decreased 5.6% to a seasonally adjusted 2.014 million annual rate, the Commerce Department said. Wall Street expected a decline of 2.8%. Permits for future building also dropped, taking the biggest tumble in six years.

“I think this is one time we don’t have a false alarm on our hands,” a senior economist at JP Morgan Asset Management, Anthony Chan, said. “Housing is slowing.”

Predictions of cooling in the housing sector have circulated for a long time as prices soared in certain markets. But recent evidence of deceleration from a pace often described as frenzied has mounted: Mortgage rates are climbing, sales have softened, and construction costs are rising. A Lehman Brothers economist, John Shin, called the report “a warm-up to further, gradual softening,” but pointed out a rate of 2 million starts is “historically high.”

“We would argue we will continue to see cooling of housing market, but it’s going to be at very high levels,” he said.