Washington Housing construction dipped in May but remains at a healthy level, further evidence of the industry's resilience in the face of a faltering national economy.
The number of new housing units builders began work on last month dipped by 0.4 percent to a seasonally adjusted annual rate of 1.62 million, following a strong 2.3 percent increase in April, the Commerce Department reported Tuesday.
Even with May's decline, which was smaller than many analysts were expecting, the level of housing starts remained solid, economists said.
"Things are still cooking along," said David Seiders, chief economist for the National Association of Home Builders.
Even as the rest of the economy has slowed markedly since the second half of last year, housing activity has remained stable, thanks to low mortgage rates and falling interest rates in general.
In May, the average rate on a 30-year fixed-rate mortgage was 7.14 percent, compared with 8.52 percent for the same month a year ago. The strength of the housing and construction markets has been a main force keeping the struggling economy afloat.
To stave off recession, the Federal Reserve has slashed interest rates five times this year, driving borrowing costs down to the lowest point in seven years.
Many analysts expect Fed policy-makers to cut rates again at the end of their two-day meeting June 27. Some are predicting a cut of another half point, while others foresee a more moderate quarter-point move.
In May, construction of single-family homes slipped by 0.2 percent to an annual rate of 1.29 million. Starts of apartments, condos, townhouses and other multifamily housing fell by 1.5 percent to a rate of 331,000.
By region, starts in the Midwest rose by 15.8 percent to a rate of 344,000. The west rose by 2.9 percent to a rate of 422,000, while the Northeast and South each lost ground.
Housing permits, a good barometer of current demand, rose by 2.1 percent in May to an annual rate of 1.62 million. In Lawrence, builders took out 55 permits in May, up from 31 a year earlier.