Home, Not So Sweet Home

By John S. McClenahen Housing, about the only bright spot in the U.S. economy for the past several months, lost a lot of its luster in February. Starts for privately owned new residential construction were at a seasonally adjusted annual rate of 1.62 million last month, 11% below the revised January figure of 1.82 million, jointly report the U.S. Commerce Department and the U.S. Department of Housing & Urban Development. February's figure is the lowest in 10 months and was significantly below the 1.74 million economists generally expected. "However, it is too soon to write off housing," stresses Maury Harris, chief U.S. economist at UBS Warburg LLC, New York. He notes that housing starts were "exceptionally high" in December 2002 and January 2003 and that building permits were at a solid annual rate of 1.79 million In February. "Moreover, mortgage rates remain low, and housing is still an attractive investment," says Harris.

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