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BAD WEATHER AND SOARING LUMBER PRICES SLOW HOUSING STARTS IN MARCH

 WASHINGTON, April 20 /PRNewswire/ -- A late winter blizzard slowed the pace of new housing starts to a seasonally adjusted annual rate of 1,134,000 in March, down 4.6 percent from February, according to the National Association of Home Builders (NAHB).
 "The blizzard wiped out a week of building time throughout a good part of the Midwest, the South and the Northeast, with housing starts falling 14 percent, 5 percent and 27 percent, respectively," said NAHB President J. Roger Glunt.
 In the West, where weather conditions were much better, housing starts rose nearly 18 percent to a seasonally adjusted rate of 296,000 units, the highest rate for that region in six months.
 In addition to bad weather throughout much of the nation, the doubling of lumber prices between October and March forced many builders to put their projects on hold temporarily until prices receded.
 Framing lumber prices rose from $249 per thousand board-feet last October to a peak of $506 per thousand board-feet in mid-March. "That price hike hit was very disruptive and increased the hard cost of building a typical 2,000-square-foot home by $5,000," Glunt said.
 "We expect housing starts to rebound during the second quarter," Glunt added. "Mortgage rates are at 20-year lows, lumber prices are starting to recede and construction postponed in March because of poor weather and now ready to move forward should result in a much higher rate of housing construction during the second quarter."
 However, Glunt noted that the slowdown in housing construction reported during the first quarter was another grim reminder of the many uncertainties that hang over the economy.
 "If we don't get an upturn in housing starts over the next several months, this recovery could be in serious trouble," Glunt added.
 To bolster consumer confidence and to keep housing out in front of the current economic recovery, Glunt called on the administration and the Congress to resolve their differences on an economic recovery package and to move quickly to reactivate the low-income housing tax credit and tax exempt mortgage revenue bonds, which account for about 90,000 housing starts during a typical year. Authority to issue housing tax credits and revenue bonds expired last July.
 "The multifamily housing sector is already a disaster area, with starts not expected to top 171,000 this year, a more than 20-year low," he said. "We need the reactivation of the tax credit program to keep that sector from falling off the cliff and to increase construction of much needed affordable rental housing."
 Single-family homes were started at an annual rate of 993,000 during March, down 4.5 percent from February. Multifamily units were running at an annual rate of 141,000, down 5.4 percent from the previous month.
 March building permits were issued at a rate of 877,000 for single- family units, off 8.2 percent from the February rate, and at a rate of 161,000 for multifamily units, down 12 percent from the previous month.
 NAHB is projecting a total of 1.32 million housing starts for 1993, an increase of 10 percent, or 120,000 units, from the 1.2 million units started in 1992.
 -0- 4/20/93
 /CONTACT: Jay Shackford of the National Association of Home Builders, 202-822-0406/


CO: National Association of Home Builders ST: District of Columbia IN: CST SU: ECO

MH-DC -- DC024 -- 8204 04/20/93 14:44 EDT
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Date:Apr 20, 1993
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