Yesterday - an index that gauges builder confidence for single-family homes jumped two points in May, to its highest level since September 2008, according to the National Association of Home Builders.   That followed a five-point rise in April.   The index is based on a survey of builders, who rate current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." They also rate traffic by prospective buyers to new homes.

Two out of three components of the index rose in May. The index component gauging current sales conditions rose two points to 14, while the component gauging sales expectations for the next six months rose three points to 27. The index gauging traffic of prospective buyers remained steady, at 13.

Yet today - the Commerce Department reported that construction of homes and apartments fell 12.8 percent last month to the lowest pace on records going back a half-century. Analysts had expected housing starts to rise.  The report did contain some positive signs including a rebound in single-family construction, which partly offset a drop in apartment building.