Home builders ramped up construction in May, providing an economic boost while they sought to take advantage of an improving housing market defined by low inventory.
Housing starts increased 6.8% from revised April figures to a seasonally adjusted annual rate of 914,000, the Commerce Department said Tuesday. That was 28.6% higher than May 2012.
The faster rate of construction was attributable primarily to an increase in multi-family construction. Building of single-family homes barely rose, ticking up 0.3%. The housing start numbers, while up, were lower than economists polled by Bloomberg News had expected.
Building permits, an indication of future construction, dropped 3.1% from April, to a seasonally adjusted annual rate of 974,000. Economists had expected a decline after building permits soared to a multi-year high in April.
The rate of building permits was still higher than a year earlier, though, and single-family-home permits hit a five-year high.
Housing starts fell month-...