U.S. housing starts slipped in May as the construction of multi-family housing units dropped, but further gains in building permits suggested a rebound that would continue to support economic growth in the second quarter.
Groundbreaking fell 0.3 percent to a seasonally adjusted annual pace of 1.16 million units, the Commerce Department said on Friday. Starts in April were little changed at a 1.17 million-unit pace.
Economists polled by Reuters had forecast housing starts falling to a 1.15 million-unit pace last month.
Housing remains a pillar of strength for the economy. Residential construction added almost a six-tenths of a percentage point to first-quarter gross domestic product, the biggest contribution in more than three years.
Groundbreaking on single-family homes, the largest segment of the market, rose 0.3 percent to a 764,000-unit pace last month. Single-family starts in the South, where most home building takes place, rose 2.6 percent to their highest level since December 2007.