
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, February 17, 1994                   TAG: 9402170041
SECTION: BUSINESS                    PAGE: B-9   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

HOME CONSTRUCTION IS WEATHER-BEATEN

Home building took its steepest slide in a decade last month, dragged down by the harsh winter and the California earthquake.

Analysts said residential construction would remain stuck this month because of lingering severe weather, but it would regain its footing as spring approaches.

Housing starts skidded 17.6 percent in January to a seasonally adjusted annual rate of 1.29 million units, the Commerce Department reported Wednesday.

The decline, which matched a similar drop in January 1991, was the biggest since a 26.4 percent plunge in March 1984.

"February will probably be down for weather-related reasons as well, but starts will bounce back," predicted economist Robert Davis of the Savings & Community Bankders of America. "It's a temporary lull."

The West, including California, posted the only increase in residential construction, but it was considerably weaker than in December. Starts fell elsewhere.

Analysts noted that part of the decline was the result of an upward revision in December starts from a 1.54 million rate to 1.57 million - highest since 1.62 million in January 1989.

"Even without the earthquake and cold, we considered the December surge to be unsustainable . . . and were looking for a moderate fallback in the first quarter," said economist David Seiders of the National Association of Home Builders.

Analysts said residential construction would remain strong through 1994, although it would level off around the 1.46 million fourth-quarter rate. The Home Builders are forecasting 1.43 million starts this year, up from 1.29 million in 1993.

Applications for building perdmits - often a barometer of future activity - fell 7.9 percent in January, the first decline in seven months. Analysts said the drop also was weather-related.

Single-family starts dropped 15 percent to a 1.15 million rate.

Apartment construction plunged 33.8 percent to a 147,000 rate. But Seiders said, "We expect it erratically, but gradually, to move upward."

Housing starts fell 21.6 percent to 565,000 in the South, wiping out a 15.9 percent gain the previous month.

by CNB