Recent residential construction, including single-family and multifamily homes, tumbled by crucial amount in 4 years as rising mortgage rates weaken housing activity.

Housing starts fell 14.7% month over month in March, dropping from a 1.55 million units annualized pace to 1.32 million units annualized, in response to data from the Census Bureau released Tuesday. Single-family starts fell 12.4% month over month.

Based on LPL Financial’s chief economist, Jeffrey Roach, the data indicates how recent home construction is “beginning to indicate cracks throughout the pace of growth.”

“Housing construction is poised to slow as potential homebuyers indicate now may very well be a poor time to buy a house. Investors should expect residential investment becoming a drag on GDP growth within the approaching quarters. Housing activity may not fully stabilize until the Fed commences their easing cycle.”

The fresh government data comes after builder sentiment in April was flat from the previous month, breaking 4 consecutive months of gains. The NAHB said, “Buyers are hesitating until they may higher gauge where rates of interest are headed.”

“Looking ahead, we still think single-family starts stand to make the most of the shortage of second-hand homes available in the marketplace, shifting demand to newbuilds,” Thomas Ryan, property economist at Capital Economics, wrote in a note to clients following the discharge.

“But that strength is perhaps offset by weakness in multi-family starts, which we expect will remain around current levels, leaving total housing starts little higher than they currently are by the tip of this yr.”

The SPDR S&P Homebuilders ETF (XHB) was trading lower by greater than 1% Tuesday morning.