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Jan. 27, 2003: Home Building Hit 16-Year High In 2002

January 25, 2003
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LAS VEGAS — Indicating that housing provided substantial support to the United States economy in 2002, the U.S. Department of Commerce reported that builders finished the year with a total of 1.7 million units. This is the largest housing production figure in 16 years and includes the largest number of single-family homes built in 24 years. As a positive sign for building activity in 2003, housing permits issued in 2002 reached the highest level since 1986.

"Home building finished 2002 with a bang," stated Gary Garczynski, president of the National Association of Home Builders (NAHB), during opening ceremonies at the International Builders' Show in Las Vegas. "Government numbers on housing starts and permits in December are remarkably strong across the board — even better than we had expected."

Garczynski noted that the gains extended across all market sectors and every region of the country. He attributed this strong showing to the best mortgage rates in 40 years and solid house-price performance.

In December, starts rose 5 percent to a seasonally adjusted annual rate of 1.84 million units, with a nearly 5 percent increase on the single-family side and a 5.5 percent increase on the multifamily side. The government also revised substantially upward its previous reports on housing starts for October and November.

The 2002 total of 1.7 million housing units includes 1.36 million single-family units and 345,000 multifamily units.

Permit issuance for new homes, which can be an indicator of future building activity, rose 8.2 percent in December to a seasonally adjusted annual rate of 1.88 million units.

"Our latest builder surveys show that the single-family market remains strong in January, and we're looking for 2003 to be another excellent year," noted NAHB chief economist David Seiders. "NAHB is currently expecting housing production to slip only slightly in 2003 as interest rates firm up later in the year, but that forecast does not assume passage of a fiscal stimulus package; 2003 could even be better if Congress passes such a package on a timely basis. The bottom line is, the housing sector provided solid support to the economy in 2002 and should continue to be a positive factor in 2003 as well."

Publication date: 01/27/2003

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