Ground breaking for new homes jumped to a seasonally adjusted 1.733 million annual rate from a downwardly evised 1.553 million rate in April, the biggest climb since July 1995, the Commerce Department said.
Single family starts -- the largest category of activity -- jumped 9.6 percent, an increase also not matched since July 1995.
Starts beat the expectations of some analysts, according to Reuters, who had forecast a 1.599 million rate.
Permits, an indicator of builder confidence in future activity, rose 2.6 percent.
Regionally, starts climbed 6 percent in the South, the busiest home-building region, and 10 percent in the West, the next-most-active part of the country for construction.
New home building rocketed 24 percent in the Midwest and 22.4 percent in the Northeast.