The pace of new residential housing construction slumped last month, dipping to 1.009 million units (annualized) in October — down nearly 3% from September’s total, the US Census Bureau reports. Newly issued building permits, on the other hand, perked up by nearly 5%, offering a brighter outlook for the near term. Yesterday’s encouraging update on the mood in the home building industry for November lends support for seeing today’s soft data on housing starts as a temporary affair. “Growing confidence among consumers is what’s fueling this optimism among builders,” said David Crowe, chief economist at the National Association of Home Builders (NAHB). Even so, the outlook for growth in housing generally remains modest at best, as implied by the ongoing deceleration in the year-over-year trends for both starts and permits.

It’s hard to overlook the broad slowdown for new home building activity lately. It’s not always obvious in the short-term numbers, but it’s conspicuous when reviewing the monthly totals in relation to year-earlier data. As the chart below shows, the annual rates of growth for new construction and newly issued building permits have been winding lower for the better part of the past two years and today’s release doesn’t suggest that the trend is about to change. The monthly comparisons suffer from a fair amount of noise, but it’s short-sighted to dismiss the downward bias in the year-over-year trend.

Indeed, permits—a forward-looking measure for housing activity—is grinding along at a sluggish 1.2% rise as of last month vs. the year-earlier level. That’s close to the slowest pace since the recession ended in 2009 and it marks the third time this year that permits have more or less dropped to stall speed in annual terms. Housing construction is doing better, advancing nearly 8% for the year through October, but that modest gain looks vulnerable based on the near-flat performance in permits.

Some pundits are quick to point out that permits rose to a six-year high on a monthly basis in today’s release. True, but this masks the slowdown in the year-over-year trend, which is a more reliable measure for assessing housing’s momentum.

Still, there’s a danger in overplaying the case for pessimism. NAHB’s chief economist, for one, sees better days ahead. “Low interest rates, affordable home prices and solid job creation are contributing to a steady housing recovery,” he reasoned yesterday, citing the upbeat sentiment reading for home builders via the Housing Market Index (HMI). “After a slow start to the year, the HMI has remained above the 50-point benchmark for five consecutive months, and we expect the momentum to continue into 2015.”

That’s a reasonable view based on the fact that the US economy continues to grow at a moderate rate overall. The recent decline in weekly jobless claims to levels that are close to a 14-year low suggests that the encouraging rate of job growth in recent months will roll on. In turn, an expanding labor market will help maintain an expansion in housing activity.

Nonetheless, the near-term outlook for housing is one of modest growth at best. That’s not terrible, but residential construction is on track to generate a mild stimulus at most for the US economy in the foreseeable future.

“Conditions in the housing market are at least stable, and on the margin they appear to be improving a bit,” Ryan Wang, an economist at HSBC Securities, tells Bloomberg. “I think we should expect continued gradual growth heading into next year.”

For the moment, there’s not a lot evidence for expecting much more.