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HOUSING STARTS REMAIN FLAT IN JULY BUT SHOULD PICK UP IN THE SECOND HALF OF THE YEAR

 WASHINGTON, Aug. 17 /PRNewswire/ -- Home construction remained flat in July as new homes and apartments were started at a seasonally adjusted annual rate of 1,212,000, the U.S. Bureau of the Census reported today.
 "We remain optimistic that home construction in the second half of the year will pick up," said J. Roger Glunt, president of the National Association of Home Builders. "Everything is in place for a stronger second half of the year: President Clinton's economic plan has passed and that should lift the uncertainty that has dampened consumer confidence over the last few months; plus, mortgage interest rates are still very attractive, hovering just slightly above 7 percent," Glunt said.
 Housing starts in July were off June's pace by 2.7 percent. Single- family starts totaled 1,060,000, down 1.7 percent from June, and multifamily starts dropped 9.5 percent to 152,000.
 Some of the weakness in housing can be attributed to the sluggish California market, which accounted for more than 15 percent of all housing construction in the mid-1980's. Due mostly to the weakness in California, housing starts in the West dropped nearly 12 percent in July.
 Elsewhere, starts were up almost 1 percent in the Northeast and 2.5 percent in the South. In the Midwest, starts dropped 4 percent. Part of that decrease may be attributable to the severe rain and flooding there.
 Single-family permits, a bellwether of future construction activity, rose 4.5 percent in July, an indication that there should be an increase in construction activity in the months ahead.
 "The pickup in single-family permits is encouraging. It tells us that builders are optimistic about the housing market for the coming months," Glunt said.
 Multifamily permits fell 4.2 percent in July. But that segment of the market, which has been hurt by tax law changes and the credit crunch, should begin to rebound modestly later this year. The president's economic plan included permanent reauthorization of the low- income housing tax credit, which accounts for one-third of all multifamily construction.
 "With that program back on the books, we should soon begin to see the construction of affordable rental apartments," Glunt said. "The revived low-income housing tax credit, low interest rates and increasing consumer confidence should combine to spur housing to NAHB's projected level of 1.26 million housing starts this year, a slight increase over last year's total," he said.
 -0- 8/17/93
 /CONTACT: Jay Shackford of the National Association of Home Builders, 202-822-0406/


CO: National Association of Home Builders; U.S. Bureau of Census ST: District of Columbia IN: CST SU: ECO

DC-KD -- DC020 -- 3700 08/17/93 16:10 EDT
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Publication:PR Newswire
Date:Aug 17, 1993
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