The weak figures show that builders still lack confidence that buyers can soak up the glut of unsold homes already on the market —  a supply magnified by a record number of home foreclosures.

Construction of new U.S. homes dipped slightly last month, missing expectations, in a sign that the building industry’s recovery from the housing bust is likely to be bumpy and gradual.

Fresh signs that the economy is stabilizing—though at very low levels—emerged yesterday in reports that home construction rose more than expected last month and wholesale prices remained in check.

Construction of new homes increased in May by the largest amount in three months, providing an encouraging sign that the nation’s deep housing recession was beginning to bottom out.

Construction of new homes plunged to a record low in January as all parts of the country showed big declines in building activity.