The U.S. Commerce Department released the housing market data on Tuesday. Housing starts in the U.S. declined 11.1% to 1,036 million annualized rate in May from a 1,165 million pace in April, exceeding expectations for a rise to 1.019 million. April's figure was revised up from 1,135 million units.
The decline was driven by a falls in both starts of single-family and multi-family homes.
Building permits in the U.S. climbed 11.8% to 1.275 million annualized rate in May from a 1.140 million pace in April. It was the highest level since August 2007.
Analysts had expected building permits to increase to 1.100 million units.
Starts of single-family homes dropped 5.7% in May. Building permits for single-family homes rose 2.6%.
Starts of multifamily buildings plunged 20.2% in May. Permits for multi-family housing jumped 24.9%.
Housing market activity may accelerate this year due to the improvements in the labour market.