U.S. homebuilding tumbled in April and permits fell, suggesting the housing market continued to tread water amid shortages of land and skilled labor.

Housing starts dropped 3.7 percent to a seasonally adjusted annual rate of 1.287 million units in April, the Commerce Department said on Wednesday. The decline reversed March's rise.

Data for March was revised to show starts rising to a 1.336 million-unit rate instead of the previously reported 1.319 million-unit pace. Building permits fell 1.8 percent to a rate of 1.352 million units last month.

Economists polled by Reuters had forecast housing starts decreasing to a pace of 1.310 million units last month and permits declining to a 1.350 million-unit rate. Starts fell in the Northeast, West and Midwest, but rose in the South.

U.S. financial markets were little moved by the data.