WASHINGTON -- While the economy fell into negative growth territory in the third quarter, housing production held its own, according to government figures released yesterday.

Gross Domestic Product (GDP) declined 0.4% while residential fixed investment posted a positive growth rate of 1.9%, the Bureau of Economic Analysis reported. That growth is down from housing's 8.5% growth rate in the first quarter and 5.9% growth rate in the second quarter.

Housing will continue to help cushion the effects of the evolving economic downturn due to a strong demographic demand for housing, record buildup in home equity during the last decade, historically low interest rates on home mortgages, and the current refinancing boom, according to Bruce Smith, president of the National Association of Home Builders (NAHB).

Considering that housing and related industries and activities impact close to 20% of GDP, the residential sector has a huge potential to stimulate local economies, Smith observed.