P.M. BRIEFING : May Housing Starts Drop 1.4% to Lowest Point Since Recession

Housing starts in May continued their 1990 downward drift, dropping 1.4% to their lowest level since the 1981-82 recession, the government reported today.

The Commerce Department said starts of new homes and apartments totaled a seasonally adjusted annual rate of 1.21 million units, the smallest number since 1.17 million units got under way in October, 1982, at the end of the last recession.

Housing starts jumped 23.2% to a 1.57 million annual rate in January, which was the warmest on record. But they have dropped each month since then--down 5.1% in February, 12.2% in March and 6.4% in April.

The April figure was worse than the 5.8% drop originally reported last month.

Analysts have attributed the weakness to high interest rates and tighter restrictions on credit and, occasionally, to the weather.

Mortgage rates, which dropped into the single digits toward the end of last year, rose above the 10% level in January and ranged between 10.67% and 10.33% in May. Rates fell to 10.12% by last Friday.