Housing starts soften in April

By Don Hogsett -- Home Textiles Today, 6/3/2002 12:00:00 AM

WASHINGTON —

Sales of new and existing homes both moved higher during April, boosted by low mortgage rates, regaining some of the ground lost during widespread declines in March.

But housing starts — a gauge of future activity, at least in new homes — continued to soften, with starts falling by 5.4 percent, following an even deeper 7.8 percent decline in March.

Sales of existing homes, which draw in first-time buyers and make up the largest segment of the American housing market, jumped up by 7.0 percent, recovering from a steep 8.3 percent drop in March, the National Association of Realtors (NAR) reported.

David Lereah, the NAR's chief economist, commented, "It all comes down to the strong housing market fundamentals, which won't be changing in the foreseeable future. Low interest rates, strong demand, high consumer confidence and an improving economy are setting the stage for another record year in existing home sales." The realtor's trade group is forecasting a 1.5 percent gain in sales of existing homes this year. Sales activity was strongest in the Northeast, up 11.1 percent, followed by Southern states, up 9.5 percent.

New home sales edged up by 1.0 percent, reclaiming some of March's 3.1 percent decline, the Commerce Department reported. But growth was patchy and concentrated in the Midwest, where a big 33.8 percent increase in new home sales more than offset declines everywhere else. New home sales fell by 13.8 percent in the Northeast; by 5.6 percent in the West; and by 3.2 percent in the South.

Housing starts fell by 5.4 percent, with declines posted in all regions of the nation except for Southern states, where starts increased by 5.6 percent. Starts fell off a steep 24.1 percent in the Northeast; by 19.5 percent in the Midwest; and by 5.8 percent in the West.

Housing by region
Month-to-month % change