The news could have a significant impact in the coming months on the homebuilding and construction equipment industries, as applications for new building permits also fell 3.3 percent to a new record low.
Economists had expected home construction and building permits to rise slightly in April, as there were some signs that the collapse in housing activity was nearing its end, according to the Associated Press.
And as foreclosed homes continue to come onto the market at rock-bottom prices, builders face tough competition in the housing market.
There were some positive signs. The National Association of Homebuilders released its survey of builder confidence Monday, showing an increase in confidence for May after an earlier gain in April.
Economists said low housing prices, record low mortgage rates and efforts by the Obama administration to turn the housing market around could provide encouragement for home buyers.
