Housing starts up 6.8% in May

• Builders%27 confidence at 7-year high
• Existing home sales for May come out Thursday

Home builders stepped up construction of new homes and apartment buildings last month as the the nation's steady housing recovery continued advancing.

Housing starts rose 6.8% to a seasonally adjusted annual rate of 914,000, the government reported Tuesday.

April's rate was revised up to 856,000 from the 853,000 pace originally reported.

Single-family housing starts rose 0.3% last month after two months of declines.

Housing starts were expected to pick up last month because of a surge in building permits in April.

In May, building permits fell 3.1% to an annual rate of 974,000. That's still close to the five-year high hit in April.

The housing construction numbers follow others showing recovery in the housing market, which continues to be a plus for the U.S. economy.

A widely followed measure of home builder sentiment jumped to a seven-year high in June, the National Association of Home Builders said Monday.

New home sales in April also improved, up 29% year over year, and reaching an annual rate of 454,000, its second highest rate in nearly five years.

An improving job market and low mortgage rates have encouraged home buyers. That, along with a tight supply of homes for sale, has pushed home prices higher, up 12.1% in April year-over-year, CoreLogic data shows.

Many builders have successfully raised prices. The huge rise in the home builder index signals that housing starts will move higher in June and keep rising later this year, says PNC Financial Services Group.