New US residential building fell to the lowest level since 1959 last month, signalling that the stricken housing market could have further to fall.

Housing starts fell for the ninth time in 10 months, dropping by 12.8 per cent to an adjusted annual rate of construction of 458,000, commerce department figures showed on Tuesday. The decline dashed analysts’ expectations of an increase in new construction, but many took this as good news because the overhang of housing inventory needs to be slashed for a recovery to occur.