U.S. housing starts came in below expectations at 975k in May, a month-over-month decline of 3.3%, according to data released from the U.S. Department of Commerce on Tuesday morning. The consensus was looking for a decline to 980k level.

The previous month's 1032k was revised to a level of 1008k.

Despite the decline, single family homes - the most important component in the report, accounting for four-fifths of housing starts - fell 1.0% to 694k, compared to the previous month's 681k level.

Multiple family homes contributed 301k, below the previous month's 327k level.

Meanwhile, building permits totalled 969k in May, a decrease of 1.3% month-over-month from 982k last month and above the consensus call for 960k.

Privately-owned housing completions in May were at a seasonally-adjusted annual rate of 1132k.

Housing starts refer to the number of homes being built, and provide a sense of how the housing sector has performed in the previous month. Housing permits represent plans to construct new homes, an indicator of housing performance in upcoming months.

By Erik Kevin Franco and edited by Cristina Markham