WASHINGTON--

Construction of single-family homes fell in June to the slowest pace in 17 years although a change in New York laws helped give a big boost to apartment building.

The Commerce Department reported Thursday that construction of single-family homes dropped by 5.3% in June to a seasonally adjusted annual rate of 647,000 units, the weakest performance since January 1991, another period when the housing industry was going through a severe downturn.

However, construction of multifamily units surged by 42.5% last month, thanks to a change in New York City building codes that spurred a wave of apartment construction in that area. Taken together, single and apartment construction rose by 9.1% to an annual rate of 1.066 million units.

But the total increase was viewed as an aberration that did not give a true picture of the continued weak state for the housing industry because it was skewed by the huge jump in apartment building in New York.

Private economists are predicting that housing will continue to be under strains for the rest of the year. The troubles in housing, combined with related turmoil in the financial sector attributed to billions of dollars of losses on mortgage loans, are dragging down the economy, raising risks of a recession.