WASHINGTON U.S. single-family homebuilding increased in April, but data for the prior month was revised sharply lower, suggesting that the embattled housing market was struggling to find a floor, despite a retreat in mortgage rates.

Single-family housing starts, which account for the bulk of homebuilding, rose 1.6% to a seasonally adjusted annual rate of 846,000 units last month, the Commerce Department said on Wednesday. Data for March was revised down to show single-family homebuilding falling to a rate of 833,000 units instead of increasing to a pace of 861,000 units as previously reported.

A survey on Tuesday showed the National Association of Home Builders/Wells Fargo Housing Market index increased in May to the midpoint mark of 50 for the first time since July 2022 as a dearth of previously owned homes supported new construction.

The housing market has taken the biggest hit from the Federal Reserve's fastest monetary policy tightening campaign since the 1980s to tame inflation.

The average rate on the popular 30-year fixed mortgage has dropped from a peak of 7.08% in November. It averaged 6.35% last week, according to data from mortgage finance agency Freddie Mac. But tightening credit conditions could make it harder for builders to access funding for new projects.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)