Housing surges, but resales falter

Staff -- Home Textiles Today, 4/1/2002 12:00:00 AM

NEW YORK —

Helped by good weather and strong consumer confidence, the U.S. housing market remained strong in February, though the gains in new home sales and housing starts were offset by softness in the big market for existing home sales.

Resales, by far the biggest segment of the market — and the one that draws in the most entry-level buyers, perhaps the ones most affected by rising rates — slipped by 2.8 percent in February to a seasonally adjusted annual level of 5.9 million, as some consumers started to worry that mortgage rates will rise as the economy picks up steam. Indeed, mortgage rates have begun to tick up during the past several weeks, according to Freddie Mac, with rates on a 30-year mortgage inching up to 7.14 percent late in March from 6.89 percent in February.

"Obviously low mortgage rates are the key to a strong housing market, but rising consumer confidence and a growing number of households bode well for the future." said Martin Edwards, Jr., president of the National Association of Realtors.

Sales of new homes and housing starts — the two segments of the market that cater to the more affluent home buyer — surged ahead, with new home sales gaining by 5.3 percent, and starts jumping up by 2.8 percent. Starts of single-family homes were notably strong, climbing by 7.4 percent, but the overall total for starts was capped by a 12.0 percent decline in apartment starts.

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