The Commerce Department reported this morning (June 19) that seasonally adjusted housing starts in May fell a welcome 2.1% to 1.474 million from April's 1.506 million. Moreover, May starts were down 24.2% from the same month in 2006, when construction began on 1.944 million privately owned homes.

The numbers, issued jointly by the Census Bureau and the Department of Housing and Urban Development, indicated that builders are indeed working off existing inventory while planning for better times ahead. Building permits issued in May were up 3% to 1.501 million, up from 1.457 million in April, but still 21.7% below the 1.918 million permits issued in May of last year.

Both starts and permits were down for single-family homes, with single-family starts in May down 3.4% from April to 1,170,000 and single-family permits down 1.8% to 1,056,000.

Housing completions were down 0.5% from April to 1.534 million, a 19.3% drop from May 2006. Single-family completions, however, were up 1.5% in May to 1.302 million.