Washington, DC, June 17, 2008 -- U.S. housing starts dropped by 3.3 percent in May, reaching their lowest level in more than 17 years, while permits for future construction also declined, according to the Commerce Department. The government reported that housing starts set an annual pace of 975,000 units in May, the lowest since March 1991. Economists polled before the report were expecting a 980,000 unit rate. The April starts figure was revised downward to 1.008 million from the originally reported 1.032 million. Building permits fell to an annual rate of 969,000, slightly higher than the 960,000 rate expected by economists. The Northeast experienced a 61.5 percent increase in May housing starts compared to the previous month, while the region set a record low level of housing permits for single-family homes. Starts were down in all other regions, with building activity declining by 25 percent in the Midwest, 10.3 percent in the West, and 4.4 percent in the South.