WASHINGTON — Builders broke ground on more new homes in May, but not enough to signal a recovery in the troubled housing market.

Home construction rose 3.5 percent from April to a seasonally adjusted annual rate of 560,000 units per year, the Commerce Department said today.

Economists say the pace of construction is far below the 1.2 million homes per year that must be built to sustain a healthy housing market. Many credit-strapped builders are struggling to compete with low-priced foreclosures.

Housing permits, a gauge of future construction, rose last month to the highest level since December. But apartment and condominium construction accounted for a large portion of that increase. Renting has become a preferred option for many Americans who lost their jobs in the recession and who were forced to leave their rapidly depreciating homes.

Permits for buildings with five or more housing units jumped to its highest point since October 2008, well before a second wave of foreclosures knocked home prices down further.

The number of single-family homes started in May rose a modest 3.7 percent. But the construction pace of single-family homes, which accounts for about 80 percent of all residential construction, is well below the 2010 rate.

Construction of those traditional homes is “still very much dead in the water,” said Mark Vitner, senior economist at Wells Fargo.

Though new homes represent a small fraction of the overall housing market, they have an outsize impact on the economy. Each home built generates, on average, three jobs and $90,000 in taxes, according to the National Association of Home Builders.

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