(CN) – The pace of construction of new homes slowed for the third-straight month in May, a sign that an ongoing shortage of houses for sale might worsen.
The Commerce Department said Friday that housing starts fell 5.5 percent in May to a seasonally adjusted annual rate of 1.09 million units.
The drop follows a 2.7 percent monthly decline in April and a 7.7 percent drop in March.
Home construction is still 3.2 percent higher year-to-date, but that increase is too small to keep up with demand.
The successive declines in housing starts come despite a solid job market and an unemployment rate of 4.3 percent.
Industry analysts attribute most of the slowdown to a decline in the construction of apartment buildings, this is pulling the overall building numbers down despite an uptick in the construction of single-family homes.
The government says groundbreakings in the Northeast were unchanged in May and declined in the Midwest and South. Housing starts rose slightly in the West.
Building permits, an indicator of future construction, slumped 4.9 percent nationwide to 1.17 million.
Meanwhile, a new Harvard University study finds that the diminished supply of available homes is swelling prices in large U.S. metro areas from New York to Miami to Los Angeles is squeezing out would-be buyers and pushing up rents as more people are forced to remain tenants.
Harvard University’s Joint Center for Housing Studies said Friday about one-third of households is currently spending more than 30 percent of their gross income on housing.
Homeownership rates have stagnated in part because high rents have made it difficult for many prospective buyers to amass a down payment for a house, the report said.
At the same time, the sparse supply of available properties is benefiting existing homeowners, many of whose home values have recovered from the housing bust a decade ago.
“As the economy continues to recover, as income picks up as household formations pick up, it’s not spurring a supply response,” said Chris Herbert, managing director of Harvard’s Joint Center for Housing Studies. “It’s a worsening of the situation that was evident last year.”