WASHINGTON - Construction of new homes unexpectedly plunged last month, as builders waited to see whether lawmakers would extend a tax credit for homebuyers.

The results underscore how much the housing market has been relying on government support for its fledgling recovery. The tax credit of up to $8,000 for first-time owners was due to expire on Nov. 30, but Congress voted to extend it earlier this month and expand it to more buyers, after intense pressure from real estate agents and homebuilders.

A strong housing market is needed to support a broad economic recovery.

The Commerce Department said Wednesday that construction of new homes and apartments fell 10.6 percent in October to a seasonally adjusted annual rate of 529,000, from an upwardly revised 592,000 in September. Economists polled by Thomson Reuters expected a pace of 600,000.

Buyers who have owned their current homes for at least five years are now eligible for tax credits of up to $6,500, while first-time homebuyers would still get up to $8,000. To qualify, buyers have to sign a purchase agreement by April 30.

Applications for building permits, a gauge of future activity, fell 4 percent to an annual rate of 552,000 units. That also missed analysts' expectations of 580,000.

Meanwhile, the National Association of Home Builders said Tuesday its housing market index remained unchanged in November, reflecting a cautious outlook from residential developers as they waited to learn whether Congress would extend a homebuyer tax credit.

The trade association said its index stood at 17 for the second straight month. Index readings below 50 indicate negative sentiment about the market.