U.S. housing starts dip in May, but permits surge (by Jeffry Bartash)

WASHINGTON (MarketWatch) - Construction on new U.S. homes fell 4.8% in May to an annual rate of 708,000, but permits climbed 7.9% to the highest level in nearly four years, the U.S. Commerce Department reported Tuesday. Economists surveyed by MarketWatch had expected starts to total 720,000 on an annualized basis. Yet housing starts in April were revised up to 744,000 from an original reading of 717,000 - the best spurt of construction since October 2008. And permits for new construction, viewed as a gauge of future demand, jumped to an annual rate of 780,000 from April's upwardly revised level of 723,000. It's the highest rate since September 2008. Permits for single-family homes, which account for three-quarters of the housing market, rose 4% to an annual rate of 494,000 last month. That's the highest level since March 2010. All figures are seasonally adjusted.