Construction of new homes and apartments rose to their highest level in 16 years during January, while the number of new building permits fell.
The U.S. Commerce Department this week reported a 0.2% increase in construction compared to December
while the total number of permits to begin new construction fell 5.6% in January. Construction of single-family homes increased 2.1% in January, offsetting an 8.7% decline in the building of new apartments.
For all of 2002, housing starts were up 6.4% from the previous year, marking the best year for housing construction since 1986.
The continued increase in home building is good news for trucking companies--household goods movers benefit by moving families into newly built homes, while carriers that move construction materials and home furnishings see benefits from this activity as well.
The drop in building permits was due mainly to a decline in authorizations for multi-family homes.
“Housing starts have a few more months left at this pace before it slows 5%-10% late in the year,” said Newport Communications Senior Economist Jim Haughey. “The backlog of permits not yet started rose slightly in January to a 10-year high, 15% above a year ago.
“Early February mortgage rates dipped to 5.68% for a 30-year loan with rates expected to rise to more than 6.1% by year end,” he said. “Home price appreciation has slowed from 8%-10% in 2000 to 3%-4% in late 2002, but it will average several percentage points more than inflation in 2003, keeping a new home a good buy."