WASHINGTON (AP) — U.S. builders began construction on more single-family homes and apartments in May, encouraged by more buyers and a scarcity of houses for sale.
The overall pace of homes started rose 6.8 percent last month to a seasonally adjusted annual rate of 914,000, the Commerce Department said Tuesday. That followed a 14.8 percent decline in April. May's rate is still below March's pace of more than 1 million — the highest in five years.
Single-family home construction, nearly two-thirds of the market, rose 0.3 percent last month to an annual rate of 599,000. That followed two months of declines.
Apartment construction, which is more volatile, surged 21.6 percent to an annual rate of 315,000. That came after a big drop in April.
Applications for building permits, a gauge of future construction, fell 3.1 percent in May to a seasonally adjusted 974,000, remaining close to a five-year high hit in April.
Overall, the report points to more evidence of a housing recovery that has become sustainable. New-home construction has risen 28.6 percent since May of 2012.
Improved hiring and low mortgage rates have encouraged more people to buy homes. The increased demand, along with a tight supply of homes for sale, has pushed home prices higher.
Stronger housing markets are helping the economy grow and offsetting some of the drag this year from higher taxes and federal spending cuts.
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