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

DATE: THURSDAY, July 20, 1995                   TAG: 9507200026
SECTION: BUSINESS                    PAGE: B-7   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

HOUSING STARTS FALL IN JUNE

Housing starts slipped 0.1 percent in June, the fifth decline in six months, but the drop was entirely in multi-family construction. Single-family starts posted a healthy gain.

Still, starts overall fell in three of the nation's four regions despite falling mortgage rates, which analysts had expected to boost building activity.

The Commerce Department said Wednesday that housing starts totaled 1.263 million at a seasonally adjusted annual rate, down from a revised 1.264 million in May. The May total originally was estimated to be 1.24 million.

Although starts fell in each of the first three months of 1995 as mortgage rates peaked, they managed a 2.5 percent advance in April before slipping 0.4 percent a month later.

Analysts had expected construction to increase in June to meet renewed demand in the face of gains in sales of new and existing homes as falling mortgage rates made housing costs more affordable.

Thirty-year, fixed-rate mortgages averaged 7.53 percent in June, down from more than 9 percent last January. They have continued to fall, hitting 7.41 percent last week, lowest in 16 months.

The monthly payment on a $100,000 mortgage with a 7.5 percent interest rate is $699, while the payment on the same loan with a 9 percent rate is $805 - a difference of $106.

Applications for building permits - often a barometer of future activity - suggested continued activity. They rose 2.3 percent, to a 1.27 million annual rate. They had been unchanged in May after rising 0.6 percent in April.

Single-family starts jumped 3.9 percent, to a 1.01 million rate, highest since a 1.05 million rate last March. They had fallen 3.5 percent in May to 974,000, lowest since a 939,000 rate in March 1993.

Single-family homes represent about 80 percent of total starts.

But construction of apartments and condominiums plunged 13.4 percent, to a 251,000 rate, wiping out an 11.5 percent gain a month earlier.

by CNB