WASHINGTON – The pace of U.S. home construction slipped in May with many Americans still struggling to afford new houses.

Builders started work at a seasonally adjusted annual rate on 1.01 million homes last month, the Commerce Department said. That was down 6.5 percent from 1.07 million in April.

Construction firms began work on fewer single-family houses, condominiums and apartments last month.

Home construction has struggled to gain much traction this year, limiting its ability to contribute as much to broader economic growth as it has in the past. Many would-be buyers face higher mortgage rates than at this time last year, while builders are selling fewer new homes but charging more for them. That has reduced the number of possible buyers and the number of construction jobs. Builders employ 1.49 million fewer workers than they did at the start of the Great Recession in December 2007, a loss of about 20 percent.

In May, construction tailed off in the Northeast, Midwest and West. Only the South experienced greater building activity in May.

Housing starts have risen 9.4 percent over the past 12 months. But apartments account for most of the gains, suggesting that more Americans will be renting instead of owning homes.

The growth in apartment buildings points to an economy in which more Americans are renting, rather than buying homes..

Applications for building permits, a gauge of future activity, fell 6.4 percent in May to an annual rate of 991,000.

Now that the spring and summer buying season is in full swing, homebuilding appears to be struggling.

Builder confidence has improved slightly but remains pessimistic.

The National Association of Home Builders/Wells Fargo builder sentiment index rose to 49 in June, up from 45 in May.

A reading below 50 indicates that builders consider the conditions for new construction to be poor. The index had been above 50 from June through January.

Sales of new homes rose 6.4 percent in April to a seasonally adjusted annual rate of 433,000, according to a separate Commerce Department report. That comes after sales declined 6.9 percent in March to an annual pace of 407,000, while buying slipped 4.4 percent in February.

Median prices on new homes are $275,800, a 10 percent increase since the beginning of 2013.