By Justin Reedy
New housing starts are rising in metro Atlanta and the rest of the country despite a lingering economic recession.
With interests rates staying at already low rates and the cost of lumber dropping, counties in metro Atlanta have been issuing more and more permits for new single family homes, an industry official said.
"Housing starts are up across the board in metro Atlanta," said Chris Burke of the Greater Atlanta Homebuilders Association.
Clayton County's single family home construction permits have increased about 4 percent from this time last year, according to Eddie Williams, director of the county Community Development Department. From January through March of 2002, the county issued 470 permits, Williams said, but his department has already issued 485 permits for the same period this year.
Though Henry County's home construction has dropped somewhat n from 836 permits in the first quarter last year to 713 this year n most other areas of metro Atlanta are experiencing surges in new home construction, Burke said.
With the economy struggling, federal officials have lowered the prime interest rate to its banks' corresponding mortgage interest rates have also dropped. That's one of the biggest reasons new housing construction has stayed strong, Burke said.
"The low interest rates are definitely a big factor, and there are also a lot of lending programs around now to help get people into home ownership," Burke said.
But that could change if interest rates begin to rise back to levels seen in the late 90s or the late 70s, Williams said.
"As long as the rates stay low, it should keep busy, because more people qualify for mortgages," he explained. "If rates start to go back up, it'll slow down because some people who qualify for a home loan under a lower rate won't qualify under a higher rate."
Housing starts have been on the rise on a national scale, as well, according to the National Association of Home Builders. Last month, about 1.78 million homes were started across the country, up about 8.3 percent from 1.64 million starts in February, the NAHB said.
"In an economy that continues to display overall weakness, housing remains a remarkable source of strength, and we are confident that the industry will experience a very good year in 2003," said NAHB president Kent Conine.
In addition to low interest rates, home builders n and homeowners working on construction projects around their homes n could be getting a boost from dropping lumber costs.
The cost of most kinds of lumber has decreased between 10 and 20 percent over the last couple of months, according to Matt Banks, the administrative manager at Lowe's Home Improvement in Stockbridge. That has caused a sizable increase in people buying lumber for home improvement projects, Banks said.
"We've seen a lot of lumber sales because of people building decks for their houses," Banks said. "It's definitely starting to spike with the weather warming up."