WASHINGTON (AP) — The pace of U.S home construction slipped in May with many Americans still struggling to afford new houses.
Builders started work at a seasonally adjusted annual rate on 1.01 million homes last month, the Commerce Department said Tuesday. That was down 6.5 percent from 1.07 million in April.
Construction firms began work on fewer single-family houses, condominiums and apartments last month.
Home construction has struggled to gain much traction this year, limiting its ability to contribute as much to broader economic growth as it has in the past. Many would-be buyers face higher mortgage rates than at this time last year, while builders are selling fewer new homes but charging more for them. That has reduced the number of possible buyers and the number of construction jobs. Builders employ 1.49 million fewer workers than they did at the start of the Great Recession in December 2007, a loss of roughly 20 percent.
In May, construction tailed off in the Northeast, Midwest and West. Only the South experienced greater building activity in May.
Housing starts have risen 9.4 percent over the past 12 months. But apartments account for most of the gains, suggesting that more Americans will be renting instead of owning homes.
The growth in apartment buildings points to an economy in which more Americans are renting, rather than buying homes. Following the housing bust and recession, Americans have had to deal with relatively flat wages and job insecurity, both obstacles to saving for a down payment. The home ownership rate was 64.8 percent at the start of the year, down from a peak of 69.2 percent during 2004.
Applications for building permits, a gauge of future activity, fell 6.4 percent in May to an annual rate of 991,000.