Home Building Falls 1%; First Decline Since 1982

Construction of new homes and apartments fell 1% last year, the first decline since 1982, but analysts said the housing industry still enjoyed a good year.

Last year finished on a strong note with a sharp 17.5% jump in housing starts in December, the biggest monthly increase in more than two years.

Analysts said this big gain reflected sharp declines in mortgage rates at the end of the year and was a sign that construction should remain strong at least through the first half of 1986.

Housing construction totaled 1.73 million units in 1985, down slightly from the 1.75 million units started the year before, the Commerce Department said Friday.

In other economic news, the Federal Reserve Board reported that the operating rate at U.S. factories, mines and utilities climbed to 80.5% of capacity in December, the best gain in four months. The Fed said the 0.4-percentage-point increase was led by a sharp rise in production at auto plants.

The small decline in housing starts was the first since a 2% drop in 1982. In 1983, housing construction surged 60.3% as builders recovered from four dismal years in which construction starts had plummeted by 47%.