Single-family housing starts fell 3.4% in May, but the downturn in new construction appears to be leveling off."We are basically at the bottom," said Michael Swanson, senior economist at Wells Fargo Bank, Minneapolis. The U.S. Census Bureau reported that single-family starts fell from a seasonally adjusted annual rate of 1.21 million in April to 1.17 million in May. April starts were revised downward by 14,000 units. Compared with those of May 2006, single-family starts are down 26%. "When you look at the number of homes that we are starting [per capita], it is extremely low," Mr. Swanson said. "You cannot stay this low for very long." The Wells Fargo economist said it could be another couple of quarters before single-family starts "perk back up." And he said he expects builders to shift from high-end homes to simpler homes because financing costs have risen.

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