
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, June 20, 1990                   TAG: 9006200044
SECTION: BUSINESS                    PAGE: B-5   EDITION: METRO  
SOURCE: From staff and wire reports
DATELINE: WASHINGTON                                LENGTH: Medium

NEW HOUSING SLUMPS

Housing starts nationwide continued drifting downward in May, dropping 1.4 percent to their lowest level since the 1981-82 recession, the government reported Tuesday.

In the Roanoke area, however, first-quarter totals ran ahead of 1989 and May's starts were only slightly below levels of a year ago.

The Commerce Department said starts of new homes and apartments totaled a seasonally adjusted annual rate of 1.21 million units, the smallest number since 1.17 million units were begun in October 1982 at the end of the last recession.

In Roanoke City and County, there were 52 single-family housing starts for May, 38 in Roanoke County and 14 in Roanoke, the Roanoke Regional Home Builders Association said. In May 1989, Roanoke had nine single-family housing starts and Roanoke County 51.

For the first quarter of 1989, 122 single-family and 48 apartment units were begun, compared to 157 single-family houses and 86 apartments in first quarter 1990.

Starts slumped 8 percent in the Midwest and 3.3 percent in the West. Increases were posted in the South, up 3.2 percent, and the Northeast, up 1.6 percent.

Nationally, housing starts jumped 23.2 percent to a 1.57 million annual rate in January, which was the warmest on record. But they have dropped each month since then - down 5.1 percent in February, 12.2 percent in March and 6.4 percent in April.

Analysts have attributed the weakness to high interest rates and tighter restrictions on credit and occasionally to the weather.

Mortgage rates, which dropped into the single digits toward the end of last year, rose above 10 percent in January and ranged between 10.67 percent and 10.33 percent in May, according to the Federal Home Loan Mortgage Corp. Rates fell to 10.12 percent by last Friday.

Some analysts cited tighter lending policies in the wake of the troubled savings and loan industry. And many believe builders took advantage of the unseasonably warm temperatures in January to begin construction, rather than wait for spring and summer.

The pace during the first five months of 1990 was 5.3 percent below that of the same period of 1989.

by CNB