- The Washington Times - Thursday, July 18, 2002

ASSOCIATED PRESS

Housing construction eased in June after a surge the previous month, but was at a healthy level that analysts say suggests continued demand.

Builders broke ground last month on 1.67 million units at a seasonally adjusted annual rate a 3.6 percent drop from the May level, the Commerce Department reported yesterday.

In May, housing construction increased by 10.8 percent, according to revised figures. That increase, which was smaller than the government previously reported, followed a drop in April.

Despite June's fall, there is "no evidence the strength in housing is any way impeded," Federal Reserve Chairman Alan Greenspan told Congress yesterday.

Mild weather early this year helped to spur housing construction, which remained solid throughout last year's recession. Analysts have been predicting a slowdown, saying that the robust levels cannot be sustained.

"But we keep getting surprised by the strength" of new home construction, said Dave Seiders, chief economist for the National Association of Home Builders. "Apparently there's a real emphasis on housing as a place to be focusing on to put your money."

That is especially true given the uncertainties of the stock market. Mr. Seiders predicts a modest erosion in construction, yet still solid numbers in the second half.

By region, housing starts rose by 6.1 percent in the Northeast to a rate of 175,000. In the Midwest, they dipped by 0.9 percent to a rate of 344,000. In the South, housing construction plunged by 7.6 percent to a rate of 744,000. The West also saw a drop, by 2.2 percent, to a rate of 409,000.

Even with the slowdown in home construction, analysts predict the sector will continue to be healthy. Low mortgage rates and solid housing appreciation make purchasing a home an attractive investment.

Last week, the average rate on a 30-year fixed-rate mortgage fell to 6.54 percent, down from 6.57 percent the previous week, according to Freddie Mac, the mortgage company.


Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide