The U.S. Commerce Department reported that the shortfall occurred mostly in the multifamily sector, where production often fluctuates widely on a month-to-month basis.

"Today's numbers are certainly no cause for alarm," said David Seiders, National Association of Home Builders (NAHB) chief economist. "With interest rates on long-term mortgages still below 7 percent, and with the economy on a recovery path, the market for new homes is in very good shape.

"Although rental vacancy rates have been rising during the past year as large numbers of renters have shifted to first-time homeownership, we expect job growth to help support the multifamily market as the economic recovery proceeds," he added.

Single-family housing starts fell by a marginal 2 percent in April, to a seasonally adjusted annual rate of 1.27 million units, while multifamily starts declined 18.1 percent to 285,000 units. The shortfall occurred primarily in the Northeast and Midwest, where extraordinarily good weather spurred big gains earlier in the year. Those regions registered declines of 24 percent and 19.5 percent, respectively, while the West showed a 5.8 percent decline and the South posted a 5.6 percent increase.

Housing permits, which can be an indicator of future building activity, were virtually unchanged in April at a rate of 1.63 million units. Single-family permits were up 1.6 percent to a 1.27 million-unit rate, while multifamily permits were down almost 4 percent to a rate of 366,000. Three out of four regions posted gains in housing permits in April, with the South's 3.1 percent decline being the only exception to the rule. Permits rose 11.2 percent in the Northeast, 2.5 percent in the Midwest and 1.2 percent in the West.