(Photo: Reuters)
New housing starts in the U.S. fell 11.1 percent in May after big gains in the month of April, the Commerce Department said in a report Tuesday. However, permits for future construction hit a near eight-year high, increasing 11.8 percent to a 1.28 million-unit rate, or the highest since August 2007.
April starts were revised up to a 1.17 million-unit rate, which is the highest since November 2007.
Economists polled by Reuters had forecast housing starts falling to a 1.10 million-unit pace in May after a previously reported 1.14 million-unit rate.
Meanwhile, permits have been above a 1 million-unit pace since July.
Groundbreaking for single-family homes, which accounts for the largest share of the market, dropped 5.4 percent to a 680,000 unit pace. Starts for the volatile multifamily segment plummeted 20.2 percent to a 356,000 unit rate.
The decline was prevalent in all four regions, declining by a whopping 26.5 percent in the Northeast. Starts in the South, where most of the home building takes place, fell 5.0 percent.
Single-family building permits inched up 2.6 percent to their highest level since December. Multi-family building permits increased by a hefty 24.9 percent. Permits for buildings with five units or more increased to their highest level since January 1990.
