Dive Brief:

• A day after the National Association of Home Builders reported the highest optimism among builders since January, the U.S. Census Bureau released numbers showing that housing starts fell far short of expectations in March.

• Starts inched up 2% in March after taking a nosedive in winter-weary February. But the number of residential groundbreakings was down 2.5% from March 2014. And although the number of permits issued for single-family homes in March was 2.1% higher than in February, the annual pace of permits dropped 5.7%.

• A 7.1% decline in multifamily starts and a 16% dip in multifamily permits could indicate that the sector’s aggressive condominium and apartment building spree of the past few years is winding down.

Dive Insight:

The disappointing uptick in residential construction has confounded some economists, who point to near record-low interest rates, a strengthening job market and inviting spring weather as conditions that seem to favor more robust building.

Still, a drought in the West reportedly could be limiting builders, and fewer homes are needed in once-booming cities where oil drilling has tapered off.

The lack of new homes in the pipeline, analysts said this week, could result in a weak spring selling season, despite optimism among builders.