Housing holds

The Commerce Department reported on June 20 a marginal 0.4 percent drop in May housing starts to a seasonally adjusted annual rate of 1.62 million units. Single-family housing production decreased by 0.2 percent and multifamily decreased by 1.5 percent.

"Construction of new housing in the second

Housing continues to outperform expectations, considering ominous signs in other sectors of the economy, Smith observes. But he doubts housing will remain immune from the economic slowdown much longer. The NAHB forecasters predict a 2.5 percent decline in 2001 housing production compared to last year.

Increases in household formations and low mortgage interest rates helped demand. Regionally, the Midwest led the way in housing starts, increasing 15.8 percent, followed by a 2.9 percent gain in the West. The Northeast had the most drastic swing in starts with a fall of 28.3 percent in multifamily. Southern starts declined by 1.9 percent.