New housing starts ended a four-month-run of increases in May, dropping 10% month-over-month, according to a joint release by the Commerce Department's Census Bureau and the Department of Housing and Urban Development (HUD).

Privately owned housing starts in May were at a seasonally adjusted annual rate of 593,000, according to the monthly report (download here). That's down 10% from the revised April rate of 659,000. The April estimate of the annual rate was revised down from the original rate of 672,000. However, May 2010's rate was up 7.8% from the May 2009 rate of 550,000.

As HousingWire previously reported, while starts were up during the past four months, in April, a decline in new building permits indicated a future decline in new construction.

Single-family housing starts were at a seasonally adjusted annual rate of 468,000, down 17.2% from the revised April rate of 565,000. The May rate for housing starts of buildings with five or more units was 112,000, up from the April revised rate of 81,000.

It's sobering news for the new housing markets, analysts said, and comes as the deadline for the homebuyer tax credit has come and gone. While mortgage rates are still near historic lows, the market is no longer supported by the Federal Reserve's mortgage-backed securities (MBS) purchase program, which ended earlier this year.

"Today's data releases illustrate how uneven the economic recovery still is, with the manufacturing sector firing on all cylinders while the housing sector slides back into the abyss," Toronto-based Capital Economics wrote in commentary released Wednesday.

The seasonally adjusted annual rate for privately owned housing units authorized by building permits in May was 574,000, down 5.9% from the upwardly revised April rate of 610,000, but it 4.4% above the May 2009 rate of 550,000.

Permits for single-family homes in May were at a rate of 438,000, down 9.9% from the upwardly revised April rate of 486,000. Permits issued for buildings with five or more units were at a rate of 117,000 in May, up from the upwardly revised April rate of 107,000.

On Tuesday, the National Association of Homebuilders said builder confidence decreased in June, after reaching a three-year high in May.

The rate of new housing units completed in May was at a seasonally adjusted annual rate of 687,000, down 7.4% from the downwardly revised April estimate of 742,000 and is 15.4% below the May 2009 rate of 812,000.

Single-family housing completions were at a rate of 507,000 in May down 7.8% from the downwardly revised April rate of 550,000. The May rate for buildings with five or more units was 175,000, down from the April downwardly revised rate of 181,000.

Write to Austin Kilgore.

Mortgage applications trended upward in two weekly surveys, reversing last week's dip in application activity.

The Mortgage Bankers Association (MBA) found that applications for purchase mortgages rose 7.3% in the week ending June 11 — the first increase in six weeks.

At the same time, applications for refinance mortgages jumped 21.1% to the highest level recorded in more than a year, since May 2009. The refinance share of application activity reached 74.8%, from 72.2% the week before.

With purchase and refinance requests taken together, total mortgage applications rose 17.7% on a seasonally adjusted basis, MBA said.

"Mortgage applications for home purchases increased last week, the first increase in over a month," said MBA vice president of research and economics Michael Fratantoni, in a press statement. "While it is clear that purchase applications in May dropped sharply as a result of the tax credit induced increase in applications in April, it is unclear whether we are seeing the beginnings of a rebound now."

The Mortgage Maxx index, which adjusts data to reflect the number of households applying for a mortgage, found 2.8% more households submitted applications than the week before. Maxx publisher Paul Descloux, in weekly commentary, noted the index could decline in coming weeks following the homebuyer tax credit expiration.

"As completed purchases catalyzed by the federal tax incentive fade over the coming weeks, further deterioration in that number may be in the offing," he said.

Write to Diana Golobay.