Housing construction fell a bigger-than-expected 3.9% in May, to its lowest level in nearly a year, suggesting that rising mortgage rates are cutting into demand. The Commerce Department reported Friday that builders began work on new homes at a seasonally adjusted annual rate of 1.59 million last month, the lowest level since 1.56 million in June last year. May's performance was weaker than many analysts were expecting. They were forecasting that housing starts would decline by 1.8% to 1.63 million, reflecting an upswing in mortgage rates and wet weather during the month. In April, builders began work on 1.66 million units, a 1.6% increase, weaker than the government previously estimated. The Federal Reserve has boosted interest rates six times since last June to slow the speeding economy and keep inflation from becoming a problem.