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Construction of new homes and apartments, after three months of declines, increased in May, helped by dry weather.

The Commerce Department said builders started construction at a seasonally adjusted annual rate of 1.957 million units last month, up 5% from April's pace. The better-than-expected increase came after declines of 5.5% in April, 7.5% in March and 5.9% in February.

Analysts attributed the rise to an unusually dry spring in many parts of the country, which allowed builders to start work on more homes. But they cautioned that construction activity is likely to slide in coming months as the housing industry slows under the impact of rising mortgage rates.

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A leading consumer rights group, the Consumer Federation of America (CFA), on Monday issued a report charging that real estate industry members act as a cartel to stifle competition, resulting in higher prices and poorer service for homebuyers.

It's the latest episode in the long-running soap opera that pits consumer groups and the government against the real estate industry. The dispute has become increasingly heated in recent years as soaring home prices have resulted in huge commissions for the industry. At the same time, the technology advances that have dramatically lowered costs in investment, travel and other industries have not had a great impact on real estate.

"Many traditional real estate brokerage firms, and their organizations, function as a cartel that tries to set prices and restrict service options," said Stephen Brobeck, CFA's executive director at a press conference in Washington D.C.

The CFA charges that consumers are harmed in three main ways:

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