New construction in June matched May's decline.
By Ron Scherer | Staff writer of The Christian Science Monitor
http://www.csmonitor.com/2005/0720/p01s01-usec.htmlNEW YORK – For the second month in a row, developers have slowed down the pace of building all those new Cape Cods, colonials, and Spanish haciendas that Americans have been snapping up at a record pace.
While it may be too soon to write an obituary for housing, any twitch is watched carefully because the sector is one of the most vibrant in the economy. The housing boom has provided jobs for everyone from plumbers to roofers. And millions of Americans have watched their homes become swollen piggy banks, rising in value month after month. Indeed, almost everyone from the chairman of the Federal Reserve to the auto-body shop owner who has some "investment properties" is watching the housing market with a wary eye.
Tuesday, the Commerce Department reported that developers started 2 million new homes in June, the same pace as May, which was revised to show a decline of 1.1 percent. Economists had been anticipating a June bounce because mortgage rates fell.
"This is basically a temporary cooling in housing activity," says Anthony Chan, an economist at JPMorgan Asset Management in Columbus, Ohio. "I think it's premature to say we've turned the corner on housing." The numbers, however, are a change from the past, when developers were building homes as fast as carpenters could load their nail guns. Construction of single-family homes fell by 2.5 percent. In some parts of the country, the slower pace was quite noticeable: In the Midwest, construction fell by 12.1 percent; in the West, by 10.4 percent; and in the Northeast, by 0.5 percent. Only in the South, including Miami, where the condo craze is continuing, did construction rise - up 11.4 percent.
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