Housing Starts Stateside Fall in May

It was something of a good-news-bad-news story on the housing front in the United States last month.

U.S. home building unexpectedly fell in May, but data for the prior two months was revised higher and building permits increased, suggesting that the housing market was drawing some support from a sharp decline in mortgage rates.

Figures released by the U.S. Commerce Department revealed housing starts dropped 0.9% to a seasonally-adjusted annual rate of 1.269 million units last month amid a drop in the construction of single-family housing units.

Data for April, however, was revised up to show home building rising to a pace of 1.281 million units, instead of increasing to a rate of 1.235 million units as previously reported. Housing starts in March were also stronger than initially estimated.

Economists had forecast housing starts edging up to a pace of 1.239 million units in May. Single-family housing starts fell in the Northeast, the Midwest and West, but rose in the South, where the bulk of home building occurs.

The department also reported that building permits rose 0.3% to a rate of 1.294 million units in May. It was the second-straight monthly increase in permits. Building permits have been weak this year, with much of the decline concentrated in the single-family housing segment.