Printer Friendly

FEBRUARY HOME STARTS SURGE ON EXPECTATIONS OF TAX CREDIT

 FEBRUARY HOME STARTS SURGE ON EXPECTATIONS OF TAX CREDIT
 WASHINGTON, March 17 /PRNewswire/ -- With buyers and builders possibly jumping the gun on a proposed $5,000 federal tax credit for first-time home buyers and taking advantage of the lowest mortgage rates in nearly 20 years, new housing starts accelerated in February to a seasonally adjusted annual rate of 1,304,000, up 9.6 percent from the 1,190,000 rate reported in January.
 "Back-to-back monthly increases in housing starts indicate that the housing market is gaining strength following the worshome builder from Cincinnati.
 However, Buchert cautioned that the recent upturn in long-term mortgage rates and the political gridlock in Washington over proposed tax stimulus legislation could undercut whatever momentum in economic growth that might now be underway.
 "The tax stimulus bill, which includes the proposed $5,000 tax credit, is heading for a presidential veto," he noted. "Unless Congress moves quickly to frame another tax bill that has bipartisan support, we could see a slowdown in demand among first-time buyers."
 In February, single-family housing starts jumped nearly 15 percent to a seasonally adjusted annual rate of 1,146,000. Multifamily construction, however, fell 17.3 percent to a rate of 158,000. Single-family permits -- a bellwether of future activity -- increased 5.1 percent to a rate of 959,000, while multifamily permits fell 8 percent to a rate of 201,000.
 Building activity rose in all four census regions. The starts rate was up 7.6 percent in the Northeast, 6.8 percent in the Midwest and the South and 10 percent in the West.
 Long-term mortgage rates fell during most of 1991 and bottomed out at about 8 percent during the first week of January. Since then, rates have edged back up to a level close to 9 percent.
 "Eight percent mortgage rates gave the market a big psychological lift during January and February, bringing into the market thousands of prospective buyers who had been sitting on the sidelines during 1991," Buchert said. "With mortgage rates climbing above 9 percent, some of the pent-up demand worked off and the tax credit now in doubt, we could see some leveling off in demand in the months ahead."
 -0- 3/17/92
 /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:


MH-MK -- DC015 -- 8782 03/17/92 12:48 EST CO: E! Entertainment Television ST: California IN: ENT SU:

DM-JL -- LA008 -- 8782 03/17/92 12:03 EST
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Mar 17, 1992
Words:423
Previous Article:PENNSYLVANIA LEAD TEACHER CONFERENCE SET FOR MARCH 18-19
Next Article:BIDERMANN RENEWS LICENSING AGREEMENT WITH BURBERRYS
Topics:


Related Articles
Shares dip despite rise in profits.
S&U cashes in as profits should beat top hopes.
'Spring on time' for UK industry.
Cautious optimism as building permits enjoy nudge north.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters