Homebuilders slowed down the pace of construction for the third straight month in May, a possible sign that the shortage of houses for sale might worsen.
The Commerce Department says housing starts fell 5.5 percent in May to a seasonally adjusted annual rate of 1.09 million units. This comes after a 2.7 percent monthly decline in April and a 7.7 percent drop in March. Home construction is still 3.2 percent higher year-to-date, but that increase has been too modest to address the dwindling supply of homes.
Building permits, an indicator of upcoming construction, tumbled 4.9 percent to 1.17 million.
The monthly declines come despite a solid job market with a relatively healthy unemployment rate of 4.3 percent. Many analysts expect the job gains to translate into more home construction.
US housing starts drop for a 3rd straight month