U.S. Housing Starts Drop 11.1% In May To 1.04 Million Annual Rate

Construction started on new U.S. homes fell 11.1% to an annual rate of 1.04 million in May, pulling back from a surge in April, which saw the fastest starts pace since late 2007, according to government data released Tuesday. Starts for single-family homes fell 5.4% to an annual rate of 680,000, while starts in buildings with at least five units dropped 18.5% to a pace of 349,000. Economists polled by MarketWatch had expected an overall May starts rate of 1.08 million, compared with an originally estimated pace of 1.14 million for April. On Tuesday the government tweaked April's starts rate to 1.17 million. For context, there was an average starts pace of about 1.5 million over the 20 years leading up to the housing bubble's 2006 peak. The annual pace of permits for new construction, a sign of future demand, rose 11.8% to 1.28 million, the fastest pace since August 2007. The pace of permits for single-family homes rose 2.6% to an annual rate of 683,000, while the pace of permits for apartments rose 26% to 557,000. Economists caution over reading too much into a single monthly home-construction report because the data are subject to substantial revisions.