Despite a better-than-expected government report that found housing starts rose 3 percent in October, shares in local homebuilders tanked Tuesday as the overall housing market continues to struggle.

Shares in Los Angeles-based KB Home shed 8.3 percent in early trading Tuesday to $21.48 hitting a 52-week low along the way at $21.35. Calabasas-based Ryland Group Inc. also lost 6.3 percent to $22.60. Shares in both homebuilders are off nearly 60 percent for the year.

Housing starts increased to a seasonally adjusted, annual rate of 1.2 million. However, housing starts still are 16 percent below the same period a year earlier. What’s more, the modest increase was due entirely to starts of multi-family units; starts of single family homes fell.

The outlook, as measured by permits, was not good. Permits for new construction fell 6.6 percent for the month to the lowest level since July 1993. Economists had expected permits to decline 4 percent.

Regionally, housing starts rose by 5.8 percent in the West, 21 percent in the Midwest, and 8.5 percent in the Northeast. Starts fell by 4.6 percent in the South.