Housing starts remaining healthy

WASHINGTON — Spurred by low mortgage rates, sales of single-family homes are forecast to grow by 1.0 percent this year to a record-breaking 985,000 units, the National Association of Home Builders (NAHB) is forecasting.

"For home builders, the early part of this year was complicated by unusually large swings in weather conditions and uncertainties related to the buildup to war with Iraq — yet sales of new homes held near a million-unit annual pace and residential fixed investment accounted for about one-third of total GDP growth in the first quarter," said Kent Conine, NAHB president. "Home sales actually have strengthened in the wake of the war and are now on track to beat our previous forecasts and support the economy over the balance of the year."

Supporting growing home sales are near-record low interest rates, Conine said, which are expected to average 5.3 percent during the third quarter, before rising to an average of 5.5 percent in the closing quarter of 2003.

Taking a look at housing starts, David Seiders, NAHB chief economist, said, "We're holding to our previous forecast for a total of 1.7 million housing starts this year, on a par with last year and a very healthy number. That includes an upwardly revised 1.0 percent gain in single-family home production, to 1.38 million units, and a 6.6 percent decline in multifamily production, to 324,000 units."