U.S. housing starts fell more than expected in May to a five-month low as a homebuyer tax credit expired, and building permits also fell, the government reported Wednesday, in the latest signs that the construction industry will not fuel the economic recovery. The Commerce Department said construction of new homes and apartments fell 10 percent in May to an annual rate of 593,000 units, the lowest level since December. The percentage decline was the biggest in 14 months. The results were driven by a 17 percent plunge in the single-family market, which had benefited earlier in the year from federal tax credits of up to $8,000. It was the largest monthly drop in single-family construction since January 1991. Housing starts rose in April and March as new home construction was boosted to take advantage of the tax credit. Applications for new building permits, a sign of future activity, dropped 5.9 percent to a 574,000-unit annual pace in May, the lowest level in a year. The drop following a 10.9 percent decline in April.
