Housing Starts Hit 19-Year High

January 10, 2004
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WASHINGTON - Housing starts rose to a seasonally adjusted annual rate of 2.070 million units in October, reported the U.S. Department of Commerce. This is 4.5 percent above October's upwardly revised estimate of 1.980 million units, as well as 17.6 percent above the November 2002 rate, and the strongest rate of housing production since February 1984.

"We are closing in on an incredibly strong year," stated Kent Conine, president of the National Association of Home Builders (NAHB). "Builders have been striving to meet robust demand for homes, and the market still has a lot of strength."

"The key driver for housing has been the favorable interest rate structure, and ongoing solid increases in house values also have fueled demand for both single-family homes and condo units in multifamily structures," noted David Seiders, NAHB's chief economist.

Single-family starts reached their highest pace on record in November - a seasonally adjusted annual rate of 1.695 million units. This was 3.3 percent above the upwardly revised October rate and 20.8 percent above the November 2002 pace. Multifamily housing starts increased 10.6 percent over October to a seasonally adjusted rate of 375,000 units and were 5 percent above the pace of a year ago.

Construction of new homes and apartments rose in all regions but one in November, with the Northeast, Midwest, and West posting gains of 15.7 percent, 8 percent, and 10.4 percent, respectively, over October's rate. The South was down 2.2 percent, following a very strong October for the region.

For the month, issuance of total building permits was down 5.4 percent from October to a seasonally adjusted rate of 1.874 million units, as builders worked down a near-record backlog of unused permits.

"Issuance of new building permits was down across all regions and the backlog of unused permits fell substantially in November as housing starts surged," said Seiders. "These developments suggest some decline in housing starts for December, but 2003 almost certainly will record the highest number of starts since 1978. NAHB now estimates a total of 1.84 million units by year's end."

Publication date: 01/12/2004

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