WASHINGTON — Despite falling interest rates, housing construction continued to decline in May, down 2.1% from the previous month to the lowest level since the last recession in 1982, the government said today.
Mortgage rates, which peaked at 11.22% in March before falling to 10.2% by last week, had been blamed for the recent decline in housing activity. Analysts had thought the falling rates would boost the pace. Nevertheless, new homes and apartments in May were built at a seasonally adjusted annual rate of 1.31 million units, down from 1.34 million in April when construction fell 5%, the Commerce Department reported.
It was the fourth consecutive monthly decline, the longest string since activity slowed for five months in a row from February through June, 1987. The April level was the slowest pace since the 1.30 million rate in December, 1982.