New U.S. home construction picked up modestly in May compared with April, the Commerce Department said Thursday.
At an annual rate, there were an estimated 560,000 privately owned housing starts in the month, 3.5 percent higher than April's revised estimate of 541,000.
Compared to a year earlier, building starts dropped 3.4 percent, the department said.
Commerce said there were 612,000 housing permits issued on an annual basis in May, 8.7 percent higher than April's revised estimate of 563,000 and 5.2 percent above May 2010.
In May, 544,000 privately owned housing projects were completed, 0.4 percent above April's revised estimate of 542,000 and 22.5 percent below May 2010 when 702,000 home project completions were recorded on an annual basis.
On Wednesday, the National Association of Home Builders reported confidence among U.S. home builders had dropped slightly in June, with their Housing Market Index dropping 3 points to 13 in the month.
The NAHB said rising prices for building materials was part of the reason confidence was low.