WASHINGTON (Reuters) - U.S. construction spending unexpectedly fell in March likely as a resurgence in mortgage rates weighed on homebuilding, but activity remains supported by an acute housing shortage.

Construction spending reveals how much the government and private companies spend on projects including housing and highways. The more the U.S. spends on construction, the higher the level of economic activity. The government revised spending on construction in February to a flat reading, from an initial report of a 0.3% drop.