Expectations were for starts to rebound some, growing 5.4% month over month to an annualized rate of just over 1 million after last month's disappointing report.
Building permits rose 1.5% to an annualized rate of 1.02 million from last month's revised level of 1.003 million.
Building permits were also expected to rebound, growing 2.7% month-over-month after last month's 5.6% decline.
Last month's report from the Census showed that starts plunged 14.4% to an annualized rate of 956,000, well below the expected decline of 5.2% to an annualized pace of 1.04 million.
Last month's housing starts rate was revised up slightly to 957,000.