New Apartments Boost Housing Starts

A big jump in apartment projects pushed the pace of new construction modestly higher in the West and across the United States last month, the government said Tuesday, while a private research firm said sales of existing homes across Southern California inched ahead to their highest level in more than three years.

New homes were built at a 1.35-million seasonally adjusted annual rate across the United States in September, up 2.8% from August and 7% above the 1.22 million rate of a year earlier, the Commerce Department said. It was the highest level of activity since February, 1990.

Construction in the West--where California accounts for about half of all activity--rose an identical 2.8% in September from August and was up 14.2% from the depressed levels of a year earlier.

In a separate report, La Jolla-based Dataquick Information Systems said home sales in the six Southern California counties rose 0.8% in September from August and jumped 27.4% above their year-earlier levels.

Sales typically fall from August to September, as children head back to school and parents start settling in for the fall.

But the 16,358 houses and condominiums that closed escrow in Southern California last month marked the highest sales count for any month since August, 1991, when 18,203 Southland homes were sold.

Donald L. Cohn, Dataquick’s chief executive, said the sales momentum created by dropping mortgage rates and falling home prices earlier in the year carried into September.

The modest gains in last month’s new-construction figures stemmed solely from a 52% rise in apartment construction, which easily offset a surprising 3% decline in single-family houses, the Commerce Department said. Activity in the apartments sector fell nearly 17% in August.

J. Roger Glunt, president of the National Assn. of Home Builders, attributed part of the surge in apartments to renewal of a federal tax credit for developers of low-income housing.

Housing Starts:

Seasonally adjusted annual rate, millions of units

Sept. ‘93: 1.35

Source: Commerce Department