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Industry News
August Housing Starts Down Marginally From
17-Year High
From NAHB
September 17, 2003
- Indicating continuing strength in the nation’s
housing market, home builders began work on new homes and apartments
at a seasonally adjusted annual rate of 1.82 million units in August,
the Commerce Department reported today. This marked a 3.8 percent
decline from July’s upwardly revised number, which was the
highest in 17 years. Meanwhile, issuance of building permits surged
4.8 percent to its highest level this year, at a 1.89 million-unit
rate, and the backlog of unused permits moved up to 179,200 units.
"This is unquestionably a strong report," said Kent Conine,
president of the National Association of Home Builders (NAHB) and
a home and apartment builder from Dallas. "Builders are clearly
reacting to continued strong demand for single-family homes, which
is being fueled by historically low interest rates and solid home-price
performance. And it looks like there’s plenty of momentum
for housing heading toward the end of the year."
"The performance of residential building starts and permits
through the last two months virtually guarantees another strong
contribution from housing to GDP growth for the third quarter,"
added NAHB Chief Economist David Seiders. "One very positive
recent development has been the downward movement of long-term mortgage
rates from their highs in early September."
Both single-family and multifamily housing starts receded from their
impressive July pace in August. A 4.0 percent decline brought single-family
starts to a still-strong 1.48 million-unit rate while a 3.1 percent
decline brought multifamily starts to a 344,000-unit pace.
Regionally, starts fell in all but the Midwest, where a 1.0 percent
gain was registered. Wet weather in the Northeast likely contributed
to a 23.3 percent decline from an exceptionally fast construction
pace in that region during the previous month, while the South and
West posted more moderate 2.7 percent and 1.8 percent declines,
respectively.
Building permits in August rose 4.8 percent to a healthy 1.89 million-unit
pace, seasonally adjusted, with single-family building permits rising
nearly 3 percent to an all-time record of 1.475 million units. Multifamily
building permits posted an impressive 12.3 percent gain to a 411,000-unit
rate.
"Today’s report, together with our latest builder surveys
revealing very positive expectations for sales heading into 2004,
is ample evidence for NAHB to raise its forecast for housing starts
this year to 1.76 million units - up about 3 percent from last year’s
healthy production," said Seiders.
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