Extending the pullback seen over the course of the previous session, treasuries moved to the downside during trading on Friday.
Bond prices regained some ground after seeing early weakness but remained stuck in the red. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.7 basis points to 1.836 percent.
The early drop by treasuries came after a report from the Commerce Department showed a substantial increase in U.S. housing starts in the month of December.
The Commerce Department said housing starts skyrocketed by 16.9 percent to an annual rate of 1.608 million in December after jumping by 2.6 percent to a revised rate of 1.375 million in November.
The surge came as a big surprise to economists, who had expected housing starts to rise by 0.7 percent to a rate of 1.375 million from the 1.365 million originally reported for the previous month.
With the much bigger than expected increase, housing starts soared to their highest level since hitting a rate of 1.649 million in December of 2006.
Meanwhile, the Federal Reserve released a report showing a modest pullback in U.S. industrial production in the month of December.
The Fed said industrial production fell by 0.3 percent in December after climbing by a downwardly revised 0.8 percent in November.
Economists had expected industrial production to dip by 0.2 percent compared to the 1.1 percent jump originally reported for the previous month.
The pullback in production came as utilities output plunged by 5.6 percent in December, with unseasonably warm weather leading to a large decrease in demand for heating.
The economic calendar for next week is relatively light following the holiday on Monday, although traders are likely to keep an eye on reports on existing home sales and leading economic indicators.