Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, July 21, 1993 TAG: 9307210043
SECTION: BUSINESS PAGE: B6 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
Analysts said construction, which had rebounded in April and May from a winter slump, was being hampered by continued weakness in the labor market and by uncertainties over federal tax and spending policies and the Clinton administration health care package.
The Commerce Department said Tuesday that housing activity was mixed, up in the Northeast and West and down in the South and rain-soaked Midwest. Overall, starts in June were unchanged from May's 1.25 million seasonally adjusted annual rate.
"I'd be surprised if we can get to 1.3 million for the year," said economist David Lereah of the Mortgage Bankers Association, who earlier had forecast construction of 1.32 million units in 1993.
David Seiders of the National Association of Home Builders lowered his forecast to 1.26 million, from 1.29 million.
Still, that would be an improvement over 1992, when 1.2 million units were built. So far this year, however, housing starts are up just 1.1 percent over the first six months of 1992.
"It's disappointing in terms of where we expected this market to be," Seiders said. "With interest rates the lowest in two decades, we would expect something better."
The Federal Home Loan Mortgage Corp. said fixed-rate, 30-year mortgages averaged 7.16 percent last week, the lowest since it began keeping records in April 1971.
Building permits, often a barometer of future activity, suggested that improvement may not be immediate. They fell 1.3 percent, to a 1.11 million rate, after advancing 1.8 percent in May.
Seiders also said the 21.5 percent jump in the multifamily sector, a 175,000 rate, could not be sustained and would fall in July.
by CNB