Housing starts tumbled 10.6 percent from March to a seasonally adjusted annual rate of 523,000, the Commerce Department reported.

The number widely missed the average analyst estimate of 563,000.

Building permits, a forward-looking indicator, also fell, by 4.0 percent from the prior month to a rate of 551,000, well below expectations.

For the month of March, which had shown a recovery by the two indicators from near-record lows in February, the Commerce Department revised the housing starts sharply higher and building permits sharply lower.

Both April indicators were dragged lower by a steep fall in the volatile multi-family sector, buildings with at least five units.

But the key single-family housing sector also weakened, with housing starts falling 5.1 percent and building permits down 1.8 percent.

The report underlined the deep crisis gripping the US housing market since a price bubble burst five years ago, triggering a subprime crisis in 2007 that sent the global financial system into a tailspin.

"This is the latest in a lengthening string of disappointing reports from the housing industry, which confirms that the sorry state of a mortgage market populated with a large number of unresolved foreclosures continues to undermine normal home-building activity," said David Resler of Nomura Global Economics.