Construction of new homes and apartments fell 3.3 percent in December but the total housing activity for the year managed a solid 2.2 percent increase, a remarkable achievement for an industry that normally is one of the hardest hit during a recession.

The Commerce Department said Thursday that construction was started on 1.57 million single-family homes and apartments last month at a seasonally adjusted annual rate. That was 3.3 percent below the November level, which had risen a sharp 7 percent.

Even with the December decline, housing construction for all of 2001 rose by a solid 2.2 percent to 1.60 million units, the second-highest performance in the last 15 years. Only 1999 showed more construction activity during that period, reaching a total of 1.64 million.

In a second report, the Labor Department said Thursday that the number of Americans filing first-time claims for unemployment benefits fell by 14,000 last week to a seasonally adjusted total of 384,000. It was the second consecutive weekly decline, but it stemmed from the government's method of adjusting for normal seasonal variations.

Without the seasonal adjustments, claims would have increased by the largest amount in a single week since the 1990-91 recession. However, analysts blamed much of that increase on a surge in claims in California, where unemployed workers had delayed filing for benefits in previous weeks to take advantage of a law taking effect Jan. 6 that increased maximum benefits.

Economists have been surprised by the strength in housing in 2001, a year in which the country dipped into a recession in March, the first downturn in a decade.

Normally, housing is one of the hardest hit industries during an economic downturn as rising job losses force consumers to cut back on big-ticket purchases such as new homes.

However, this recession has followed a different pattern, with a huge drop-off in business investment rather than a falloff in consumer spending seen as the key cause for the downturn.

Housing was also helped in 2001 by an aggressive credit easing by the Federal Reserve, which last year slashed interest rates 11 times, driving a key short-term rate down to 1.75 percent, its lowest level in four decades.

Long-term mortgage rates also tumbled for most of the year, hitting a 30-year low of 6.45 percent in early November, as the economy, already in a recession, was sent reeling by the Sept. 11 terrorist attacks.

Many economists predict housing will remain at reasonably strong levels in 2002 with mortgage rates holding at affordable levels. Last week, Freddie Mac, the mortgage company, reported that rates on 30-year mortgages dipped to 7.06 percent, up from the November low but still at a levels considered highly attractive by home buyers.

The 3.3 percent overall decline in housing construction in December stemmed from a huge 22.6 percent plunge in apartment construction. Single-family homes actually posted a 3.6 percent increase last month.

By region, the biggest drop in activity occurred in the Northeast, a decline of 15.8 percent to a seasonally adjusted annual rate of 144,000 units. Activity in the Midwest fell by 10.9 percent to a rate of 335,000 units and was off 2.5 percent in the South to a rate of 687,000 units. The West was the only region of the country showing an increase in building activity last month, an 8.3 percent jump that pushed housing starts to an annual rate of 404,000 units.