Housing starts flattened in July but remained at near-record highs nationwide, according to figures released yesterday by the Census Bureau and the Department of Housing and Urban Development, and builders remain optimistic about the future, with building permits rising about 1.6 percent from June.

At this rate, more than 2 million homes will be built in 2005, only slightly below the 2004 figure.

"The numbers continue to look great," said David Seiders, chief economist for the National Association of Home Builders. "We're riding at an incredibly high level here."

Celia Chen, housing economist with Economy.com, said that yesterday's numbers indicate the market is still "sturdy," thanks to a strong economy and low mortgage interest rates, but she added that housing construction is not advancing at the "rapid pace" noted earlier in the year.

Single-family housing starts were up a slight 0.5 percent compared with June, to a seasonally adjusted annual rate of 1.71 million units, while starts of multi-family buildings fell 5.6 percent, to 289,000.

In the South, which includes the Washington area, overall starts were down 5.4 percent.

"Demand in this area isn't diminishing," said Kenneth Wenhold, director of the Virginia and Maryland division of Metrostudy, a Houston real estate research firm.

But housing economists, including Chen, were baffled by a sharp decline in the number of houses completed in the Northeast, where completions fell by 36 percent in July, dropping from a seasonally adjusted rate of 198,000 in June to 126,000 in July. Gopal Ahluwalia, the home builder association's director of research, said it was likely a "statistical aberration."

A slowdown in completions might indicate the builders are overwhelmed with demand and struggling with labor shortages, causing delays, said housing economist John Tuccillo. It might also reflect consumer preferences for autumn delivery of homes or may indicate that builders are delaying completion of homes for which they do not yet have buyers. In the South, completions were off just 4.1 percent.

Wayne Morris, left, and Stash Murdock work in Rogers, Ark. Housing completions were down 4.1 percent in the South.