US housing starts drop 0.3% in May

US housing starts fell a little less than expected in May, according to data released by the Commerce Department.

Housing starts slipped 0.3% to a seasonally-adjusted annual rate of 1.16m versus expectations of a decline to 1.15m.

Meanwhile, starts for single-family homes rose 0.3% from the revised April figure of 762,000 to an annual rate of 764,000.

Permits for new construction, which are a closely-followed gauge of future demand, were up 0.7% to a rate of 1.14m in May, while permits for the construction of single-family homes dropped 2% to 726,000.

Pantheon Macroeconomics: “We expected a bigger drop in starts, following the prior decline in permits, which tend to lead by a month or two. We hoped for a bigger rebound in permits, though, and it's disappointing to see that all the increase was in the wildly volatile multi-family component, while single family permits fell 2.0%.”