Housing starts fell to a five-month low in May but industrial output rose, evidence of an uneven recovery that has kept inflation at a minimum.
As the government's tax incentives for homebuyers expired, new home building dropped 10 percent to a seasonally adjusted annual rate of 593,000 units, the lowest level since December, the Commerce Department said on Wednesday.
Building permits are cleaner than housing starts. The consolidation pattern and upside acceleration of the 2005 down trend have broken to the downside. A continuation/resumption of the government's tax incentives is likely.
Building Permits And Change YOY: