Builders Slowing Home Construction Pace

Home builders, fearful of an excessive inventory buildup, have stretched out their construction schedules, according to U.S. Housing Markets, a publication of Lomas Mortgage USA.

The rescheduling is a symptom of what has become the deepest and broadest decline in the U.S. single-family housing market in four years, the publication said. Nationally, the number of building permits issued during the quarter fell 13%, and even some of the previously hot markets showed weakness.

"Bad weather interfered with home building in the West during the first quarter, particularly in California," said Robert R. Denton, executive vice president of Lomas Financial Group.

"But builders in the rest of the country needed no such excuse to curtain their operations. Single-family permit volume dropped 21% in the Plains states, 12% in the southeastern states, 11% in the Great Lakes area, and 7% in the oil patch."

Mr. Denton said few areas escaped the decline. Those that saw year-to- year improvements were mostly in the Northeast, where 1995 weather has been good and weak 1994 numbers made for better comparisons.

The Northeast as a whole showed an improvement of 3.5% in single-family construction permits in the first quarter, led by the New York area, with a 23.4% gain. But the absolute level of construction remained fairly weak, at 2.7 permits per 1,000 population, about half the national average.

The Midwest was down 14%, the South dropped 9.4%, and the West slumped by 22.2%. Orange County, Calif., reported a plunge of 42.1%, while Los Angeles was down only 6.8%.

In the South, Atlanta, Houston, and Memphis showed small gains, but all other regions dropped. The Fort Myers, Fla., area was off by about one- third.

No part of the Midwest showed a gain.

The publication said that multifamily construction intentions continued to expand, with permits soaring about 38% nationally. Combining single- family and multifamily, permits fell 3.9% in the first quarter.

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