The U.S. real estate market struggled last month as housing starts fell 10.6 percent in April to a seasonally adjusted 523,000 annual units, the Commerce Department said.

Foreclosures, difficulty in securing builder financing and uneasiness among consumers contributed to the drop, the National Association of Home Builders said.

"While mortgage rates are low and house prices are as affordable as they've been in a generation, the decline in April's housing starts is indicative of the low level of confidence that consumers have in the housing market," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev.  

“Consumers have not yet reached a level of confidence that is strong enough to begin lifting the housing market," said NAHB chief economist David Crowe. "The fundamentals -- such as economic growth and employment -- are beginning to shape up and will eventually provide enough momentum to push housing forward at a healthy pace. But until then, builders are unwilling to move forward. The issuance of housing permits, an indication of future housing activity, has remained at about the same level as the first quarter of the year."

Total  new-home permits dropped 4 percent to 551,000 units for the month.