Housing Construction Falls 11% in February

Housing construction fell a steep 11% in February, the biggest decline in almost a year, the government said Tuesday.

In other economic news, the government reported Tuesday that Americans took on $7.22 billion more in installment debt than they paid off in January.

While analysts blamed the drop in construction on erratic swings in apartment building activity, some expressed concern that mortgage rates have begun rising again.

The Commerce Department report said construction of new homes dropped to a seasonally adjusted annual rate of 1.64 million units last month, erasing most of a 12.9% increase in January.

Apartment Construction Down

The swings in both months came from changes in apartment construction activity. After soaring 68% in January, construction of apartments with five or more units plunged 36.7% in February.

Housing analysts credited part of the January increase to a rush by builders to get projects started under current tax laws rather than face the possible loss of certain tax breaks that the Administration has targeted for elimination in its reform proposal.

The big decline in apartment construction swamped a healthy 5.3% increase in construction of single-family homes in February, which put single-family activity at an annual rate of 1.1 million units, the highest level since last May.