US home building surged in May, climbing 21.7% from April, as low inventory in the existing home market continued to boost interest in new homes.

Housing starts, a measure of new home construction, came in far beyond expectations that they would decline by 0.1%, according to data released Tuesday by the Census Bureau.

The number of units rose in May to a seasonally adjusted annual rate of 1.631 million, above expectations for 1.40 million and above the revised April estimate of 1.34 million.

Building permits, which track the number of new housing units granted permits, also rose in May, after dropping in March and April. Permits were up 5.2% from the revised April rate of -1.5%.

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