Housing Starts Fall 8.2% for ‘88; Fewest Since ’82

Housing construction dropped 8.2% in 1988 to its lowest level in six years, the government reported Thursday, but analysts said the industry remained in good shape.

Construction of both single-family homes and apartments fell during 1988 to leave total housing starts at 1.49 million units. It was the poorest showing since the recession year of 1982 when 1.06 million units were built.

Analysts said that despite the decline, which is likely to continue into the current year, 1988 was a good year for the housing industry because the level of construction remained relatively high.

“We do not get very concerned when we’re building over a million single-family homes a year,” said Dale Stuard, president of the National Assn. of Homebuilders.

Further Declines Seen

Housing construction reached its post-recession peak in 1986, when 1.81 million units were built. Analysts believe that further decreases are inevitable as interest rates continue to rise, economic expansion runs its course and demographics take their toll.

Mortgage interest rates are also inching upward. Interest on fixed-rate mortgages reached 10.81% last week, according to the Federal Home Loan Mortgage Corp.

December’s seasonally adjusted annual construction rate of 1.52 million units was down a moderate 2.2% from a month earlier.

Building permits were up 1.8% in December to an annual rate of 1.54 million units.