U.S. Housing Starts Drop, Mortgage Demand Climbs Sep 18, 2003

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The number of U.S. housing starts slid in August, but building permits and mortgage applications increased, according to reports showing a strong housing market despite a trend of rising interest rates.

"All of the data that we're seeing in the housing market is incredibly encouraging. It suggests to me that the bump up in rates is not a threat to the housing market," said Mark Vitner of Wachovia Securities.

Housing starts slipped 3.8 percent last month, the Commerce Department said in a report showing generally higher interest rates on home loans were cooling buyers' ardor for new homes.

However, the department also said permits to break new ground for single-family homes jumped 2.9 percent to a 1.475 million rate -- a record high -- as builders rushed to lock in building authorization before higher rates chase away buyers.

Also, mortgage applications to buy homes rose last week, said a report by the Mortgage Bankers Association of America. Low inventories of homes available for sale should support continued high levels of activity in the housing market, Mr. Vitner said. (AP)

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