U.S. home construction slipped a bit in May as a sharp drop in single-family construction was only partially offset by a rise in apartment building.
The Commerce Department said Tuesday that construction was started at a seasonally adjusted annual rate of 1.27 million homes and apartments, a decline of 0.9% from April when construction starts had risen a strong 6.8 %. Applications for building permits, a good sign of future activity, edged up 0.3% in May to an annual rate of 1.29 million.
Construction of single-family homes fell 6.4% in April while construction of apartments rose 10.9%.
Falling mortgage rates are expected to help boost home construction and sales in coming months and help offset such problems as a shortage of building lots and a lack of skilled construction workers.
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