By Xavier Fontdegloria

Construction of new homes in the U.S. fell in April after surging in March, data from the Commerce Department showed Tuesday. Here are the main takeaways from the report:

--Housing starts, a measure of U.S. homebuilding, decreased by 9.5% in April compared with March, to a seasonally adjusted annual rate of 1.569 million. This is below the consensus forecast from The Wall Street Journal poll of economists, who expected starts to decline 2.2% to an annual pace of 1.7 million.

--The current level of starts is 67.3% above compared with the same month a year earlier, when construction activity plunged amid the pandemic-induced shutdowns.

--In March, housing starts amounted to a revised 1.733 million from an earlier estimate of 1.739 million.

--Monthly housing starts data are volatile and are often revised. April data came with a margin of error of 10.8 percentage points.

--Residential permits, which can be a bellwether for future home construction, increased 0.3% in April, at a seasonally adjusted annual rate of 1.76 million. The figure is broadly in line with economists' forecasts of a 0.2% rise to an annual pace of 1.77 million.

--U.S. housing starts report for April compares with May's indicator compiled by the National Association of Home Builders, which showed confidence in the single-family housing market remaining at high levels.

--Home builders are ramping up construction amid strong buyer demand and scarce supply of homes for sale, but shortages of labor and increasing prices for building materials pose some downside risks for the months ahead, economists say.

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

(END) Dow Jones Newswires

May 18, 2021 09:01 ET (13:01 GMT)