WASHINGTON -- Housing starts drifted down 2% in April,as building permits rose 4%, the Commerce Department said Tuesday.
In April, housing starts grew to the seasonally adjusted annual rate of 1.455 million, 2% below March's rate. The April figure is 18% above the April 1993 annualized data of 1.232 million.
The seasonally adjusted annualized rate of building permits in April was 1.371 million, up 4% from the 1.313 million units authorized by permits in March, and up 24% from the April 1993 rate of 1.107 million permits.
The Saving and Community Bankers of America wasn't complaining that the April housing start figures were down.
'Third Highest Number'
"It is in line with the strong trend of close to 1.5 million starts at an annual rate," said Robert R. Davis, chief economist at the thrift trade group. "Even though it was down, it was the third highest number in the last year."
Housing starts exploded in March - rising more than 12% above February's rate. The March figure was 35% above the March 1993 annualized data of 1.09 million.
Mr. Davis believes the annualized housing start figure will hover around 1.4 million to 1.5 million starts each month until winter. In the fourth quarter, it will likely drop to 1.3 million, partly as a belated result of higher interest rates, he said.
Mr. Davis said housing starts are "headed lower toward than that for the course of 1995."
Continuing Strength Seen
"The economy is going to continue strong into the fall and housing starts are going to be part of that activity," Mr. Davis said. "Even though interest rates are higher, they are not going to dampen immediately housing starts."
In fact, rising interest rates are helping drive the current strong housing start levels, he said.
"The fear that interest rates may move higher from current levels is basically pushing potential homebuyers off the fence," Mr. Davis said. "The home purchase activity is not just an interest rate phenomenon, it also is driven by overall purchasing power in the economy and general sentiment."
