US Housing Starts Jumped 5 Percent In May

A surge of construction in the Midwest drove U.S. housing starts up 5 percent in May from the previous month.

The Commerce Department said that housing starts rose to a seasonally adjusted annual rate of 1.35 million, the strongest pace since July 2007. All of May's construction gains came from a 62 percent jump in the Midwest, while building slumped in the Northeast, South and West. Home construction can be volatile on a monthly basis, so May's gains may be a blip rather than a trend.

The solid job market has helped to boost demand for new homes. Housing starts have risen 11 percent so far this year, with gains for both single family houses and apartment buildings. Permits to build tumbled 4.6 percent in May, but permits are running 8.9 percent higher year-to-date.

Still, builders are concerned that tariffs announced by President Donald Trump that could affect steel, aluminium and lumber would make construction much more expensive, possibly limiting how many properties are built. (AP)