U.S. housing starts rose 0.2% in May to an annualized pace of 2.01 million units, the Commerce Department said June 16.
However, the agency revised its April estimate downward to 2.005 million units from the 2.04 million reported last month. As a result, the latest figure was slightly below the 2.05 million pace expected on Wall Street but still indicative of a strong housing market and up 1.8% from a year ago.
Starts of new single-family homes rose by 4.7% in May to a 1.704 million seasonally adjusted annual rate. Building permits for new housing -- a signal of future activity -- fell 4.6% to a 2.050 million annual rate. This is the largest decline since June 2004, but it follows a 6.3% rise in April.
The government cautions that the housing data are subject to large sampling and other statistical errors. It can take five months for a trend in housing starts to emerge from the data.
The report overall suggests that "housing activity is likely to remain buoyant in the months ahead," said Marie-Pierre Ripert at IXIS Corporate and Investment Bank.
But Robert Brusca at FAO Economics said he sees some signs that the red-hot housing market may be cooling.
"Housing is topping," Brusca said. "Permits have gone dead flat and starts, although erratic, are also largely moving sideways . . . The level of activity remains quite high for housing. But the prospects for further growth do not look that strong based on momentum."
Copyright Agence France-Presse, 2005