Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, January 21, 1995 TAG: 9501230037
SECTION: BUSINESS PAGE: A-6 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Short
``When the Fed sees a report like this, they'll say it's obvious they're doing the right thing by hiking rates further,'' said David Lereah, an economist with the Mortgage Bankers Association.
The overall 1994 housing starts advance was held back slightly by a 1 percent decline in December. But the 1.53 million seasonally adjusted annual rate last month was second in 1994 only to November, when housing starts reached 1.55 million rate.
``Surveys are showing that builders generally are saying buyer traffic is down and sales are slowing,'' said Tommy Thompson of Owensboro, Ky., president of the National Association of Home Builders. ``We're obviously seeing the impact of the rate increases.''
Last year, builders broke ground on 1.45 million single-family homes and apartments, a 12.9 percent jump over 1993 and the largest number since 1.49 million in 1988, the Commerce Department reported.
Single-family starts jumped 6.2 percent to 1.2 million units, up from 1.13 million in 1993 and the most since foundations were poured for 1.43 million units in 1978.
Analysts attributed the strength in the single-family sector to growth in jobs and incomes that offset higher borrowing costs.
In addition, they said nearly 60 percent of homes were financed with less-expensive adjustable rate mortgages at year's end, compared with 15 percent earlier in the year.
Starts of apartments soared 58.9 percent, to 257,400.
by CNB