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, the
Commerce Department said on Tuesday.
Data for April was revised up to show homebuilding 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 polled by Reuters 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 homebuilding occurs.
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. The
housing market hit a soft patch last year and has been a drag on
economic growth for five straight quarters.
The sector is being constrained by land and labor shortages,
which are making it difficult for builders to fully take
advantage of lower borrowing costs. As a result, the housing
market continues to struggle with tight inventory, leading to
sluggish sales growth.
(Reporting By Lucia Mutikani; Editing by Andrea Ricci) ((Lucia.Mutikani@thomsonreuters.com;
1 202 898 8315; Reuters Messaging: lucia.mutikani.
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