Home Construction Tumbles 3.9 Percent

Housing construction slowed in March, partly due to a double-digit drop in new apartments, but remained relatively strong for a fifth straight month despite rising mortgage rates.

“Builders are continuing to build,” said economist David Lereah of the Mortgage Builders Association. “But I get nervous going forward. Eventually, interest rates will win this war” if they continue to rise and price buyers out of the market.

Housing starts fell 3.9 percent in March, to a seasonally adjusted 1.45 million annual rate, the Commerce Department reported Wednesday. It was the steepest decline since starts fell 6.2 percent a year earlier.

But activity was mixed regionally, rising in the Northeast and Midwest while falling in the South and West.

Despite the overall decline, starts remained above 1.4 million for a fifth straight month. And the February rate was even stronger than initially estimated - 1.51 million rather than 1.49 million.