WASHINGTON— U.S. builders broke ground on fewer homes in May, although the pace of construction is significantly higher than a year ago.
The Commerce Department says housing starts last month fell 11.1 percent to a seasonally adjusted annual rate of 1.04 million homes. Economists say that sales increased so sharply in April — surging 22 percent to an annual rate of 1.17 million — that some giveback was inevitable in May.
Housing starts have increased 6 percent year-to-date, aided by the spillover effects of strong job growth and relatively low mortgage rates. Construction firms appear ready to increase building activity in the coming months to satisfy the growing demand for housing.
Approved building permits rose increased 11.8 percent to an annual rate of 1.28 million, the highest level since August 2007.