May housing starts were 1.6 per cent above the seasonally adjusted annual rate for April to continue the housing boom that began two years ago, the Commerce Department said yesterday.

Housing starts for the month were at an annual rate of 1.929 million units, compared with the April rate of 1.899 million, and 34 per cent ahead of the May 1976 rate of 1.435 million.

And the number of building permits issued last month rose by 3 per cent to a seasonally adjusted annual rate of 1.6 million units from 1.563 million in April, Commerce also said.

Single-family homes were started at a seasonally adjusted annual rate of 1.461 million last month compared with 1.433 million in April.

"It is another very encouraging month for housing," said Maynard Comiez, Commerce Department economist. "It suggest construction may well be a major contributor to the economy this year."

Comiez said he doubts there will be increases in housing starts this year because construction is already at a healthy level. He said construction of single-family houses already has reached its peak, and any further increases would have to come in multi-family homes.

Michael Sumichrast, chief economist for the National Association of Home Builders, said he was encouraged that housing starts in the Northeast had increased from 188,000 to 223,000 in May and also showed a big gain in North Central United States, where they rose from 480,000 to 531,000.