Housing Starts Climb 2.1%

* The indicator: The Commerce Department reported housing starts for August.

* What they did: Construction of homes and apartments rose 2.1% to a seasonally adjusted annual rate of 1,440,000 units from 1,410,000 in July. High mortgage rates battered the interest-sensitive single-family residential sector, but a sharp surge in multifamily construction boosted the overall figure.

* What it means: Some analysts are predicting mortgage rates will reach 9% by the end of the year, from less than 7% nearly a year ago. That would price out an estimated 200,000 first time buyers. The prospect of more renters is one of the factors driving up the multifamily sector, along with the restoration of a tax credit for low-income housing.

* Highlights: Construction of single-family homes--80% of residential construction--slipped 2.7% in August after gaining 3.1% in July. New apartment building construction rose 28.5% last month following a 9.7% rise the month before. Regionally, in the West, housing starts dropped 14% to a seasonally adjusted annual rate of 308,000 units last month.

Annual Rate

Seasonally adjusted annual rate, in millions of units:

August 1994: 1.44

Source: Commerce Department