Construction of new homes fell 9.8% in May, as builders pulled back amid waning demand from home buyers. Housing starts fell to a 1.26 million annual pace from 1.39 million the previous month, the government said. The annual pace refers to how many houses would be built over an entire year if May’s rate of construction were to continue. The pace of home building is down to the lowest level since May 2020 — during the peak of the COVID-19 pandemic. New-home construction is down 4.6% from the same period a year ago. Building permits, a sign of future construction, also fell 2% from the previous month to a 1.39 million rate. Builders have slowed down the construction of new homes primarily due to a pullback in buyer demand. Rising inventory levels and weak buyer demand have resulted in homes sitting longer on the market. More builders are also resorting to home prices to encourage buyers.