WASHINGTON, D.C. — Housing construction rebounded in September from a sharp drop the month before, but economists cautioned it was too early to say what impact the terrorist attacks would have on an industry that has been a source of economic strength.
The Commerce Dept. said that construction of new homes and apartments rose by 1.7 percent in September to an annual rate of 1.57 million units. That gain followed a 6.7 percent decline in August. Housing starts had been expected to drop in September as builders held back on new projects out of fear that consumers would become more hesitant about big-ticket purchases following the terrorist attacks.
Even with the unexpected gain, analysts cautioned that the full impact of the attacks probably will not be seen until the October data is released. They predicted further weakness in coming months, especially in light of the hundreds of thousands of job layoffs that have occurred at airlines and other industries hard-hit by the economic disruptions.
Analysts noted that construction activity, weighed down by rising unemployment, had already started to slow even before the attacks and would slow further now, given the belief of many analysts that the nation has entered a recession. But Joel Naroff, head of a private Pennsylvania economic firm noted that mortgage rates have also declined with the economic slowdown and this should help cushion the drop in housing demand.