The Commerce Department reported on Wednesday the housing starts rose by 3.6 percent m-o-m in May to a seasonally adjusted annual pace of 1.572 million, while building permits fell by 3.0 percent m-o-m to a seasonally adjusted annual rate of 1.681 (the lowest level since October 2020).

Economists had forecast housing starts increasing to a pace of 1.630 million units last month and building permits remaining at a pace of 1.730 million units.

Data for April was revised to show homebuilding growing to a pace of 1.517 million units, instead of increasing at a rate of 1.569 million units as previously reported, and permits advancing to a pace of 1.733 million units, instead of rising at a rate of 1.730 million units as previously reported.

According to the report, permits for single-family homes, the largest segment of the market, decreased 1.6 percent m-o-m in May, while approvals for the multi-family homes segment plunged 5.8 percent m-o-m.

In the meantime, groundbreaking on single-family homes increased 4.2 percent m-o-m in May, while housing starts for the multi-family rose 4.0 percent m-o-m.