Although a recent government report shows the best month-to-month result in new-home starts since the height of the housing boom, industry analysts are interpreting the news in different ways.

The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced new residential construction this week. Privately owned housing starts in May were at a seasonally adjusted annual rate of 1.036 million units, or 11.1 percent below the revised April estimate of 1.165 million units, but 5.1 percent above the May 2014 rate of 986,000 units.

Privately owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of nearly 1.3 million units, or 11.8 percent above the revised April rate of 1.14 million units, and 25.4 percent above the May 2014 rate of 1.017 million units.

Privately owned housing completions in May were at a seasonally adjusted annual rate of 1.034 million units, or 4.7 percent above the revised April estimate of 988,000 units and 14.5 percent above the May 2014 rate of 903,000 units.

Single-family housing starts in May were at a rate of 680,000 units, or 5.4 percent below the revised April figure of 719,000 units. Single-family housing completions in May were at a rate of 635,000 units, or 5.2 percent below the revised April rate of 670,000 units. Chief Economist Jonathan Smoke said the data on new construction “signals strong consumer demand for both apartments and single-family new homes and healthy market fundamentals.”

“The increasing level of new construction is entirely consistent with the strong demand and corresponding price gains we have been seeing in both rents and home prices,” Smoke said.

“Given the tight supply conditions in many major markets, signing a contract on a to-be-built home is one of the ways consumers can avoid being outbid in the quest to buy a home. Builders are more confident as a result of seeing more traffic. Indeed, the last time that NAHB’s housing market index, the leading measure of homebuilder sentiment, was higher than yesterday’s reported number, was in 2005 at the height of the housing bubble.”

Smoke said he was not concerned about the month-to-month decline in starts and encouraged everyone to “focus on the permit numbers, which are up 25 percent year over year.

“Builders today are predominantly building to signed contracts, and we expect permits and starts to continue to post gains throughout the year following continued strength in traffic and sales,” Smoke said.

“For 2015, we expect single-family permits to end above 750,000, which would mean a stronger second half of the year to offset the slower level of activity in the first quarter. Total permits this year should end close to 1.26 million, an increase of 20 percent over 2014. Total starts will follow, expected to be up 14 percent over last year.”

But housing market analyst Metrostudy cautioned, “Don’t be fooled” by the data in the government’s latest report, saying May’s data followed an incredibly strong previous month, and its own analysis of builder activity and new-home supply in markets around the nation “provides strong quantitative evidence that the demand for new homes is still recovering, albeit slowly.”

Metrostudy said that according to its latest research, lot development is up 21.5 percent year over year.

“There is much more detail available in Metrostudy’s research than is evident in the government data; some markets are actually showing very strong increases in homebuilding,” the analyst said. “Furthermore, builders in most markets are confident that this slow-motion rebound will continue. That is why builder confidence has improved.”

Email Amy Swinderman.

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