SILVER SPRING, Md. — Construction of new homes in the U.S. fell 0.7% in October, a sign that builders are facing difficulties keeping up with demand as supply chain problems persist.

October’s decline put home construction at a seasonally adjusted annual rate of 1.52 million units, which is an increase of 0.4% from the rate at this time last year, the Commerce Department reported Wednesday.

Applications for building permits, a barometer of future activity, rose 4% from September and is up 3.4% from October of last year.