Unseasonably warm weather, a weak stock market and low interest rates contributed to an unexpected surge in new home construction nationwide last month, experts said yesterday.
Housing starts rose to a seasonally adjusted annual rate of 1.645 million in November, up 8.2 percent above the revised October estimate of 1.521 million and 6 percent above the November 2000 rate, the U.S. Department of Commerce reported yesterday. The November pace was the fastest since July. Building permits for November also rose 5.3 percent to 1.564 million units above the revised October rate of 1.485 million.
In a survey released Monday by the National Association of Home Builders, a Washington-based trade group, builders said low interest rates and solid appreciation in housing values are motivating new home buyers. The average interest rate on a 30-year fixed-rate mortgage was 6.7 percent in November, compared with 7.7 percent for the same month a year ago. While housing start figures were unavailable for Long Island and Queens, local builders and experts said they were also experiencing a healthy market.
“There was a slight slowdown due to Sept. 11, but that’s past,” said Bob Wieboldt, executive vice president of the Long Island Builders Institute in Islandia. “There’s built-up demand.” Wieboldt added this was the best November “in recent memory,” noting that the mild weather allowed people extra time to finish construction as well as start new houses.
Michael Dubb, a partner with The Beechwood Organization in Jericho, said activity was hot in both Long Island and Queens. “It’s been strong, and it will continue to be strong,” Dubb said. For example, he said, a project that has yet to be constructed in Queens Village for 100 two- family homes sold out within a month. Prices range from $350,000 to $450,000. Another partially finished project in Manorville for 307 homes and townhouses has already sold 265 units, with prices from the high $200,000s to mid-$300,000 range.
As of October, building permits this year were issued for 4,065 units in Suffolk County, up from 3,794 last year at that time; in Nassau, building permits were issued for 758 units year to date, down from 1,315; and in Queens, building permits were issued for 2,685 units, up from 2,074 units. November figures will be released later this month.
“The market is still healthy,” said Lennard Axinn, president of the Long Island Builders Institute and a partner with Island Estates in Melville. Island Estates is among the builders on a project in Miller Place in which 78 contracts have been signed for the 199 single-family homes proposed for the site, he said.
“That’s tremendous,” Axinn said. “We never have that many in advance.”