WASHINGTON - U.S. housing starts rose 3.5% to a 560,000 seasonally adjusted annual rate in May, the Commerce Department reported today, up from a revised 541,000 rate in April.
Permits for new construction rose 8.7% to an annual rate of 612,000, up from the revised April 563,000.
Economists polled by Thomson Reuters were looking for 540,000 starts and 560,000 permits.
Single-family starts, the more important and stable indicator of the housing market, were at a rate of 419,000, above the revised April rate of 404,000. Single-family permits were up to 405,000 from the April revised 190,000.
While all of these numbers seem to indicate some recovery in the new housing market, the homebuilders' sentiment index released Wednesday still showed a highly pessimistic attitude about their future business. Starts and permits have been stuck at low levels for just over two years and the May bounce doesn't change that picture significantly.
