NEW YORK, June 16 (Reuters) – U.S. housing starts fell 10
pct, more than an expected fall of 3.3 pct, in May to their
lowest level in five months in Commerce Department data on
Wednesday.
A popular homebuyer tax credit had buoyed construction
activity over the past two months but expired in April.
Housing starts dropped to a seasonally adjusted annual rate
of 593,000 units, the lowest level since December.
The percentage decline of 10 pct was the biggest in 14
months. April’s housing starts were revised down to show a 3.9
percent increase, which was previously reported as a 5.8
percent rise. Compared to May last year, starts were up 7.8
percent.
New building permits, which give a sense of future home
construction, dropped 5.9 percent to a 574,000-unit pace in
May, the lowest in a year. That followed a 10.9 percent drop
in April and compared to analysts’ forecasts for a rise to
630,000 units.
Analysts believe the pullback in housing will be temporary,
citing the gradual improvement in the economy. Demand for
loans to buy homes rebounded from 13-year lows last week.
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