In the South, construction fell by 15 percent, to an annual rate of 551,000 units.

Sales also rose in the South, up 13.6 percent, to an annual rate of 243,000 units.

Housing starts in the West were down 2.5 percent, to an annual rate of 426,000 units.

Sales there were up 21.6 percent, to an annual rate of 107,000 units.

Homes in the South climbed 3.4 percent, to a rate of 1.22 million units.

The housing from these two programs has been increasing at a rate of only 6,700 units per year since 1981.

Sales were up a smaller 4.2 percent in the West, to an annual rate of 359,000 units.

Sales were also off 5.1 percent in the South, to an annual rate of 243,000 units.

Economists had expected a rise to a rate of 1.19 million units.

Sales fell 4.2 percent in the South, to an annual rate of 273,000 units.