A surge of construction drove US housing starts up five per cent in May from the prior month - the strongest pace since July 2007.

The Commerce Department says that housing starts rose to a seasonally adjusted annual rate of 1.35 million. All of May’s construction gains came from a 62 per cent jump in the Midwest, while building slumped in the Northeast, South and West.

The solid job market has helped to boost demand for new homes. Housing starts have risen 11 per cent so far this year, with gains for both single family houses and apartment buildings.

Still, builders are concerned that tariffs announced by US President Donald Trump that could affect steel, aluminum and timber would make construction much more expensive, possibly limiting how many properties are built.