Home construction plummeted in May to the lowest levels since December, renewing concerns about the sluggish housing market after the expiration of a federal tax credit.
Housing starts dropped 10 percent last month to a seasonally adjusted annual rate of 593,000 units, the Commerce Department reported Wednesday.
Housing starts are up 7.8 percent compared with performance a year ago.
Single-family homes took a big hit, sinking 17.2 percent between April and May to a seasonally adjusted rate of 468,000 units.
Analysts expected a drop although not one this severe as builder confidence in the market remains shaky with the expiration of the homebuyers tax credit and a higher number of less expensive existing houses for sale.
Earlier this week, the National Association of Home Builders reported a drop in confidence in June.