Housing Starts Drop 10% in First Quarter
A regulatory clampdown on risky real estate lending contributed to a 10% decline in first-quarter housing construction, F. W. Dodge said.
The construction information division of McGraw-Hill said starts on new houses, condominiums and apartments totaled 275,738 units in the first three months of the year, down from 307,080 units in the same period of 1989.
Only six of the nation’s 25 largest home building areas showed gains in the period, F. W. Dodge said. They were Seattle, Detroit, Chicago, Houston, Charlotte, N.C., and Milwaukee.
“Although last fall’s regulatory clampdown on the thrift industry’s high-risk lending practices was intended to curb further excesses of commercial real estate development, there’s been an inevitable spillover in the housing market as well,” said George A. Christie, vice president and chief economist for F. W. Dodge.
“Early data on second-quarter home building indicate that the decline is steepening,” he added.