But since May, rates have fallen, helping to keep housing and construction activity at healthy levels even as the overall economy slows. Last week, rates fell to 6.89 percent, a 21-month low. In November, housing construction rose 2.7 percent, according to revised figures that were higher than the government previously reported. Some Cause for Concern Builders, however, say that are concerned that low consumer confidence, stock market volatility and higher energy costs will dampen sales in the future. Worried that the rapidly slowing economy could slip into a recession, the Federal Reserve, in a rare move between regularly scheduled meetings, cut interest rates on Jan. 3 by a half a percentage point.
Analysts expect additional rate cuts in the coming months.
In December, starts of single-family homes rose 6 percent, reflecting cheaper mortgage rates. But starts of apartments, condos and other multifamily housing plunged 20.8 percent. By region, housing starts rose in all parts of the country except in December for the Midwest, where they fell. Housing starts rose by 8.9 percent in the Northeast to a seasonally adjusted annual rate of 159,000. In the West, they increased by 5.8 percent to a rate of 453,000 and in the South, they grew by 5.2 percent to a rate of 708,000.