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U.S. Housing Starts Unexpectedly Drop From Upwardly Revised Level

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A report released by the Commerce Department on Tuesday showed new residential construction in the U.S. unexpectedly decreased in the month of May, although from an upwardly revised level.

The Commerce Department said housing starts slid by 0.9 percent to an annual rate of 1.269 million in May from an upwardly revised April estimate of 1.281 million.

Economists had expected housing starts to edge up to 1.239 million from the 1.235 million originally reported for April.

The unexpected pullback came as housing starts in the Northeast plummeted by 45.5 percent to a rate of 73,000 in May from 134,000 in April.

Housing starts also slumped by 8.0 percent in the Midwest and fell by 2.4 percent in the West, but housing starts in the South soared by 11.2 percent.

The report also said single-family housing starts plunged by 6.4 percent to a rate of 820,000, more than offsetting a 10.9 percent spike in multi-family starts to a rate of 449,000.

Meanwhile, the report said building permits rose by 0.3 percent to an annual rate of 1.294 million in May from a downwardly revised 1.290 million in the previous month.

Building permits, an indicator of future housing demand, had been expected to come in unchanged compared to the 1.296 million originally reported for April.

The uptick came as single-family permits surged up by 3.7 percent to a rate of 815,000, but the increase was largely offset by a 5 percent slump in multi-family permits to a rate of 479,000.

Compared to the same month a year ago, housing starts in May were down by 4.7 percent, while building permits were down by 0.5 percent.

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