THE VIRGINIAN-PILOT 
              Copyright (c) 1994, Landmark Communications, Inc.

DATE: Wednesday, August 17, 1994             TAG: 9408170459
SECTION: BUSINESS                 PAGE: D6   EDITION: FINAL 
SOURCE: ASSOCIATED PRESS 
DATELINE: WASHINGTON                         LENGTH: Short :   29 lines

HOUSING STARTS UP 4.7%, BUT THEY'RE SLOWING

Construction of new homes and apartments rebounded slightly in July - up 4.7 percent - but analysts said Tuesday's increase in interest rates will brake further an already slowing housing market.

Mortgage rates mimicked earlier Fed moves, rising from an average of 7.14 percent in February when the Fed first acted to 8.62 percent in July. An increase in rates from 7 to 9 percent would add $209 to the monthly payment on a $150,000 mortgage.

Even without another rate increase, most analysts said housing activity already had leveled off.

Also Tuesday, the Federal Deposit Insurance Corp. said its real estate index, based on a survey of 450 senior examiners and asset managers at federal regulatory agencies, registered 72 in July, down from the record 78 in April. Values above 50 indicate more respondents thought conditions were improving than declining. by CNB