U.S. home construction fell 5.8 percent in March even with the help of warmer-than-normal weather in the month, but new building permits jumped to the highest level since September 2008.

Construction of homes and apartments last month slipped 5.8 percent to a seasonally adjusted annual rate of 654,000 units from a slightly revised 694,000 in February, the Commerce Department said Tuesday. Economists polled by Thomson Reuters had forecast February housing starts little changed at an annual rate of 705,000 on a seasonally adjusted basis.

March's decline, the biggest percentage drop in a year, was led by the volatile multi-family category that includes townhouses and apartment buildings, which declined 16.9 percent.

Construction of single-family houses eased 0.2 percent to a 462,000-unit rate. Housing starts in the North rose 32.8 percent, while starts in the South declined 15.9 percent.

Building permits, a proxy for future demand, climbed 4.5 percent to 747,000 in March from a downwardly revised 715,000 in February, driven by a spike in requests to construct multi-dwelling buildings with five units or more, suggesting builders are becoming more optimistic.

Permits for single-family homes, which account for about three-quarters of the market for new housing, dropped 3.5 percent in March from 479,000 in the prior month.

Over the past 12 months, housing starts are up 10.3 percent.

Sentiment among home builders ebbed in April for the first time in seven months, a survey showed Monday. Expectations for sales over the next six months fell.