U.S. builders broke ground on an unexpectedly lower amount of homes in July, marking the first decline in housing starts in three months, Bloomberg reported.

The forecast, which was determined by a Bloomberg News poll of 69 economists, was for July to have the most housing starts in the past eight months, but multifamily dwellings dragged the pace down. Housing starts were expected to rise 2.7 percent to an annual rate of 598,000, but instead declined 1 percent decline to an annual rate of 581,000, according to the Commerce Department.

Single-family houses, which account for 75 percent of the industry, have been rising since March and increased 1.7 percent to an annual rate of 490,000. Starts on multifamily dwellings, in contrast, fell 13 percent to an annual rate of 91,000.

The Midwest had a 13 percent increase in starts, but the rest of the nation saw a decline. The Northeast was hit worst with a 16 percent drop, while the West and South suffered 1.6 and 1.4 percent declines, respectively.

Building permits, typically a sign of future construction, fell 1.8 percent to an annual pace of 560,000.

Despite the unexpected drop in starts, confidence among builders reached a one-year high in July of 18 on an index by the National Association of Home Builders/Wells Fargo. A rating below 50, however, means that the conditions are viewed as poor.