Housing A Mixed Bag In September

Washington — The U.S. housing market continued to send mixed signals during September, with some parts of the nation weak, and others showing solid growth in the aftermath of Hurricane Katrina.

Sales of existing homes, by far the largest segment of the market, were unchanged during September, the National Association of Realtors reported, even though sales in some areas surged in the wake of Katrina. David Lereah, chief economist, said near-record activity was supported by spiking home sales in areas surrounding the Katrina disaster zone.

“We are now getting some hard data from this region, with spot checks showing sharply higher home sales to residents who were displaced by the hurricane. The sales surge is more than offsetting declines in the disaster zone,” he said.

Ad hoc checks in unaffected markets such as Baton Rouge, La., show sales rose dramatically from 2004 levels.

Housing starts also benefited from a post-Katrina surge, climbing 3.4 percent, and bounding back from a 1.3 percent drop in August, the Commerce Department reported. Two of the nation's four regions recorded a rise in starts during the month, the South, up 6.9 percent as the area recovered from Katrina; and the Midwest, up 1.9 percent.

“Builders are operating at a very healthy pace and see little letup in the months ahead, despite the initial shock and economic uncertainties immediately following hurricanes Katrina and Rita,” said Dave Wilson, president of the National Association of Home Builders.

David Seiders, chief economist of the builders' trade group, said: “All the fundamentals remain in place and the overall housing market continues to exhibit ongoing strength. Favorable mortgage rates as well as strong household income and job growth continue to bolster housing demand.”

The highly volatile market for generally more expensive new homes advanced 2.1 percent, partially offsetting a deep 9.9 percent slide the month before. The strength in new home sales was concentrated in the Midwest, where sales surged 24.9 percent, followed by a 5.6 percent gain in the South. Demand slackened elsewhere, however, with sales down 20 percent in the Northeast, and off 11.8 percent in the West.