Property ManagementHousing Starts Rise Sharply
Falling interest rates, rising home prices, and strong
underlying demand continue to fuel the housing sector amid broad economic
weakness, as housing starts rose 2.8 percent in July from the previous month
to a seasonally adjusted annual rate of 1.67 million, the Commerce
Department reported today.
"Housing has remained a strong point in the economy even as signs of
weakness persist elsewhere. This is primarily due to falling mortgage
interest rates, which now have slipped below 7 percent; rising home prices,
which have brought the investment aspect of housing to the forefront as the
stock market has continued to falter; and firm underlying demand fueled by
stronger than anticipated household growth as evidenced by new Census
figures," said Bruce Smith, president of the National Association of Home
Builders (NAHB) and a home builder from Walnut Creek, Calif.
Single-family starts rose 1.5 percent to a seasonally adjusted annual rate
of 1.3 million, and multifamily starts posted a 7.6 percent gain to stand at
368,000 units.
Recent builder surveys indicate that the housing outlook remains strong in
the weeks and months ahead, but Smith cautioned that due to the overall
economic weakness, several potential roadblocks loom ahead.
Regionally, starts of new homes gained 21.3 percent in the Northeast, 3.8
percent in the South and 2.3 percent in the West. The exception was the
Midwest, where starts declined 6.8 percent. The beleaguered manufacturing
sector is still concentrated in the Midwest region.
Building permits, which can be an indicator of future building activity,
declined 1.8 percent overall. Single-family permits were down 1.9 percent
while the multifamily side remained flat.