Housing permits set a third-quarter record and are headed for a near record year.

Some 315,000 permits for single-family houses were issued in the quarter, the research firm U.S. Housing Markets reported in its latest newsletter. The previous record for a third quarter, 307,500, was set in 1977.

Brian Bragg, editor of the newsletter, said the environment has encouraged potential first-time homebuyers.

"Younger people are qualifying much more easily, because rates are so low and they can make the payments," Mr. Bragg said. "Plus, job security is good in a tight market.

Housing permit data are a lead indicator, Mr. Bragg said. "Builders have to jump through a lot of hoops to get a permit these days, so they have too much invested in the process to not use it," he said. "When studies use housing starts, they're a month late reporting what we knew by looking at permits issued."

Permit issuance also set a record in the first quarter and the first half. The nine-month total is 903,238.

Breaking the full-year record, which was set in 1978, would take 280,000 in the current quarter. That is unlikely, Mr. Bragg said; the "explosive levels" of that year reflected the end of an energy crisis.

But he did not predict a slowdown soon in home building.

"It'll end when interest rates jump back up to 10%, when we're in a recession, or when somebody stops giving us oil," Mr. Bragg said. "Until then, there'll always be a reason why you're going to want to move."

U.S. Housing Markets said the Atlanta area will set a single-family permit record for the third year in a row. Residential permits totaled 43,145 through September, 16% more than a year earlier, it reported.

This may not be good news for the area, however. Mike P. Leddy, senior vice president of Crescent Mortgage in Atlanta, said the consensus is that the area is becoming overbuilt. The area, whose current population is around 3.7 million, is gaining 200,000 to 250,000 a year.

"Anytime you have this kind of growth or a time of boom, builders tend to get a little overzealous," Mr. Leddy said.

"The time period has already been extended on how long it'll take to absorb new homes in the area," he observed. "It's no surprise: the more houses on the market, the longer time they take to sell."

Mr. Leddy, noting that Crescent Mortgage closed $220 million in November, expressed confidence about the immediate future.

"The fourth quarter is going to remain strong because," he said. "We can expect interest rates to stay low, and we'll probably see the Fed continue to lower short-term rates in order to stimulate the economy."

"This situation is unique, because typically it's in a recessionary environment when interest rates are this low."

He noted, too, that home building is only one reason the mortgage business has been strong.

"New home starts isn't a big factor to us right now," Mr. Leddy said. "At least 60% of most lenders' business is from refis."

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