U.S. housing starts rose 3.3% to 560,000 in May, stronger than the 546,000 expected by consensus though still not enough to offset the 8.8% drop to 541,000 (revised from 523,000) seen the month before. Housing starts are down 3.4% from last May. Single family starts were up 3.7% to 419,000 pace, offsetting the 3.3% decline in April. Multi-family starts rose 2.9% to 141,000 rate in May, which barely recovering some of the 21.7% drop in April. While the sector remains fragile, highlighted by the drop in the NAHB homebuilder sentiment index on Tuesday, the change is at least in the right direction. The stronger than expected starts reading will likely help calm markets concerned that the housing recovery has collapsed.