U.S. single-family homebuilding fell in April as tariffs on imported materials and high mortgage rates remained major obstacles for the housing market.

Single-family housing starts, which account for the bulk of homebuilding, dropped 2.1% to a seasonally adjusted annual rate of 927,000 units last month, the Commerce Department's Census Bureau said Friday.

President Donald Trump's aggressive tariffs, including duties on lumber and steel, have left builders reeling. The United States and China de-escalated their trade war over the weekend, but uncertainty remains over what happens after the 90-day truce they agreed on. There is also no clarity on the fate of country-specific duties which were delayed until July.

A National Association of Home Builders survey on Thursday showed sentiment among single-family homebuilders plunged to a 1-1/2-year low in May, with 78% of builders reporting "difficulties pricing their homes recently due to uncertainty around material prices."

There is also a glut of unsold new homes, with inventory at levels last seen in late 2007. Permits for future construction of single-family housing declined 5.1% to a rate of 922,000 units in March.

Residential investment, which includes homebuilding, rebounded in 2024 after steep declines in the prior two years caused by a surge in mortgage rates. It grew at a moderate pace in the first quarter of 2025.