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

DATE: FRIDAY, January 21, 1994                   TAG: 9401210115
SECTION: BUSINESS                    PAGE: A-7   EDITION: METRO 
SOURCE: By Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

'93 HOUSING STARTS MOST IN 4 YEARS

Builders broke ground in 1993 on the largest number of homes in four years, and analysts see continued improvement this year.

"Low mortgage rates, better employment gains and improved consumer confidence have served to boost single-family housing starts in the second half of 1993," said economist John E. Silvia of Kemper Financial Services in Chicago. "These same factors should sustain housing starts in the first half of 1994."

Housing starts jumped 7.1 percent last year to 1.29 million, up from 1.20 million in 1992, the Commerce Department said Thursday. It was the second straight advance and lifted construction to the highest level since 1.38 million new single-family homes and apartments were built in 1989.

Activity improved in every region but the Northeast, where it slipped slightly.

Home building activity ended the year on a strong note, shooting up 6.2 percent in December to a seasonally adjusted 1.54 million annual rate. This was the highest since a 1.55 million rate in January 1990, and the fifth straight increase.

But Merrill Lynch and Co. economists suggested that the Los Angeles earthquake and severe winter weather in much of the Midwest and East this month probably would curb construction early in the year.

Once rebuilding begins in Los Angeles and the frigid weather lifts, housing starts should pick up again, they said. They noted that mortgage applications for home purchases jumped to the highest level in three months for the week ended Jan. 15.

Applications for building permits also appeared to confirm the optimism. Often a gauge of future activity, applications jumped 7.4 percent in December, to a 1.48 million annual rate. It was the sixth advance in a row.

In 1993, home building was led by single-family construction, which surged 9.1 percent to 1.12 million. This was the highest since 1.15 million homes were built in 1987.

Apartment construction, hampered by high vacancies in much of the nation due to overbuilding in the late 1980s, slipped 4.7 percent to 161,700, the smallest in more than a decade. Many analysts believe this sector has bottomed and that any rebound will be slow.

Regionally, the South posted the biggest advance, jumping 12.8 percent to 560,500. That was the highest since 706,000 in September 1987. Starts were up 6.2 percent in December, to a 683,000 annual rate.

by CNB