Low Rates Fuel Housing Boom
Housing starts posted a fourth straight gain in July - the biggest in 16 months, providing new evidence that low mortgage rates have helped rouse the industry from its winter lethargy.
Until Wednesday, construction of new homes and apartments was believed to have fallen every month this year except for a small rise in April.
But the Commerce Department now says that starts increased throughout the second quarter and started the third with a 6.7 percent gain, the biggest since a 14 percent surge in March 1994.
“The clear factor is interest rates,” said economist David F. Seiders of the National Association of Home Builders.
The Commerce report Wednesday said starts totaled 1.38 million at a seasonally adjusted annual rate in July.
However, builder activity was mixed regionally. Starts jumped by double digits in the South and registered a gain in the West, but slipped in both the Midwest and Northeast.
The July rate was up from a revised 1.29 million in June, when starts advanced 0.9 percent.
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