HOME BUILDING HITS WINTER SKIDS

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

DATE: THURSDAY, February 18, 1993                   TAG: 9302180065
SECTION: BUSINESS                    PAGE: B-5   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium
HOME BUILDING HITS WINTER SKIDS
Construction of new homes fell 7.2 percent in January, the government said Wednesday. Analysts attributed the drop to bad weather and an unsustainable increase in building in December.
Unless the weather turns bad again this month, these analysts added, housing starts should turn up again, boosted by favorable mortgage rates and a gradually improving economy.
"The economy is growing more strongly, interest rates remain low and consumer confidence continues to be high," said economist David Berson of the Federal National Mortgage Association. "All that will translate into more starts."
The Commerce Department said housing starts totaled 1.19 million at a seasonally adjusted annual rate in January, the lowest level since July, when new construction dipped to a 1.11 million rate. Last month's decline was the largest since a 16.9 percent fall last April.
Starts were down sharply in both the Northeast and West. They also fell in the Midwest, but rose in the South.
Applications for building permits, often a barometer of future activity, edged down 1.7 percent, to a 1.18 million rate.
"This decline in permits would not suggest as drastic a decline in starts as 7.2 percent," said Marilyn Schaja, an economist with Donaldson, Lufkin & Jenrette Securities Corp. in New York. "We expect a bounceback in upcoming data."
Construction of single-family homes was off 5.6 percent, to a 1.07 million rate, the first decline in six months. It had risen 4 percent a month earlier.
But apartments, which are overbuilt in many areas of the country, fell even farther, 19.7 percent to a 122,000 rate. Construction of larger apartments - five units or more - dropped 21.7 percent to a 94,000 rate, the lowest on record. The previous record low was 98,000 in December 1991.
Regionally, the South posted a 3.4 percent increase, to a 570,000 annual rate, the highest since 575,000 in July 1990.
Bob Fetzer, vice president of the Roanoke Regional Home Builders Association, attributed the growth to more industries moving to the South, favorable interest rates and more people choosing to retire here.
Retirement has had a big effect on building habits in the Roanoke Valley, he said. One of the lures is Smith Mountain Lake.
"Roanoke is no longer an industrial base," he said. "We need to sell the mountains and the lifestyle."
Staff writer Charlyne McWilliams contributed to this story.

by Archana Subramaniam by CNB