The Commerce Department reported on Wednesday the housing starts surged by 4.3 percent m-o-m in May to a seasonally adjusted annual pace of 0.974 million, while building permits climbed by 14.4 percent m-o-m to an annual rate of 1.220 million.

Economists had forecast housing starts increasing to a pace of 1.095 million units last month and building permits rising to a pace of 0.891 million units.

Data for April was revised to show homebuilding growing to a pace of 0.934 million units, instead of increasing at a rate of 1.216 million units as previously reported.