New Home Construction at Highest Level in 20 years

WASHINGTON D.C. - Construction of new homes and apartments rose 4.7 percent in January to the highest level in more than 20 years, according to a Commerce Department report released Wednesday.

Privately-owned housing starts in January were at a seasonally adjusted annual rate of 2.159 million, 11.6 percent above the January 2004 rate of 1.934 million.

The report on housing starts showed that construction of single-family homes rose 2.7 percent to 1.76 million units, an all-time high, while construction of apartments was up a sharp 14 percent to 399,000 units.

?EUR??,,????'??Builders are striving to keep up with demand, and with mortgage rates and other market conditions still very favorable, they see strong months ahead,?EUR??,,????'?? said Dave Wilson, president of the National Association of Home Builders (NAHB).

Construction of new homes and apartments increased in the South by 18.8 percent and in the West by 1.9 percent for the month, but declined in the Northeast and Midwest, regions that were slammed by winter storms. Construction in the Midwest fell by 12.5 percent and in the Northeast by 23.9 percent in January.

?EUR??,,????'??There's no question that this is a demand-driven housing market right now and that builders are reacting to it,?EUR??,,????'?? said NAHB Chief Economist David Seiders. ?EUR??,,????'??The single-family market, in particular, is crying out for supply, and increases in house prices are symptomatic of a market that's being buoyed by demand while constrained by land-use controls in many areas.?EUR??,,????'??