Housing units started by the nation's home builders surged by 11.6 percent in May to a seasonally adjusted annual rate of 1.73 million units, according to the U.S. Department of Commerce. Both the single-family and multifamily components of the market posted large increases, and every region of the country recorded solid gains in housing production.

Gary Garczynski, president of the National Association of Home Builders (NAHB) and a builder/developer from Woodbridge, Va., attributed the impressive rebound largely to favorable interest rates on home mortgages. Rates on long-term contracts averaged 6.8 percent in May, and have since edged downward to 6.7 percent, while adjustable-rate mortgages (ARMs) have been available for less than 5 percent.

Single-family housing starts rose 9.6 percent to a seasonally adjusted annual rate of 1.39 million units in May, their highest rate since February. Meanwhile, multifamily starts rose 20.3 percent to a rate of 344,000 units, partially offsetting a big dip in the previous month. Regionally, starts rose across the board in May, posting double-digit gains of 22.4 percent in the Northeast, 24 percent in the Midwest and 10 percent in the West. The South, which is the nation's largest housing market, registered a solid 6 percent gain.

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