New housing starts rose in September, the seventh consecutive month that new home construction has been at an annual rate of more than 2 million units, the Commerce Department reported yesterday.
The department said builders started new units at an annual rate started new units at an annual rate of 2.07 million last month; up slightly from the 2.04 million pace in August.
In another development, the Commerce Department also reported that personal incomes rose 0.5 percent last month an increase tht is likely to be cancelled out by the infaltion.
The continued strength in house and apartment construction comes as something of a surprise to most economists who had anticipated some moderation in building as interest rates climbed.
Even though mortgage interest rates are hovering near a record level of 10 percent, both mortgage funds and demand for mortgage credit remains strong.
The Commerce Department reported that housing permits, an indicator of future construction activity, were isued at an annual rate of 1.7 million in September, up 9 percent from August.
Kanneth M. Plant, the chief economist for the Federal Home Loan Mortgage Corp. said the increase in permits "indicates that housing starts would remain at the 2 million to 2.1 million range over the next few months."
Plant said that mortgage financing will continue to be available as well "unless additional tightening in the money market causes double-digit mortgage rates, which would ration some potential home purchasers out of the market and discourage other potential purchasers from entering the market."
In part because of continuing strong demand for credit and in part because of tighter monetary policy by the federal Reserve Board, interest rates have been rising since late April.
Unlike previous periods of high interest rates, however, savings and loan associations - which make the bulk of home loans in the country - have been able to keep and increase their deposits certifications that permit S&Ls to remain competitive with Treasury bills on the interest rate they pay investors.
The Federal Home Loan Bank Board, which regulates the savings and loan industry, has also been pumping funds into thrift institutions to enable them to continue loaning money to potential home-buyers.
The Commerce Department said that single-family houses were started at an annual rate of 1.45 million, about the same as in August, while apartments in buildings with five or more units were begun at an annual rate of 512,000 compared with 448,000 in August.
So far, during the first nine months of the year, 1.55 million housing units have been started by builders 3 percent more than the 1.51 million units begun during the like 1977 period, the Commerce Department said.
The Commerce Department said that the personal incomes of Americans rose $8.3 billion to a $1.735 billion annual rate in September with $43 billion of the gain coming in wages and salaries. Personal incomes rose $8.5 billion in August, but wages and salaries accounted for $1.9 billion of the August rise.
Transfer payments, such as Social Security rose $100 million, interest income rose $600 million, dividends increased $400 million rental income increased $100 million while other income rose $1.6 billion.
In another development, AFLO-CIO president George Meany, in a speech late Tuesday accused the administration of making inflation worse by leaking details of Carter's new anti-inflation progam.
Meany, in a speech to the annual convention of the Seafarers' International Union, said that business are rising prices in anticipation of a program that will contain voluntary curbs on wages and prices.
Meany charged that Carter's advisers, by "filling the airwaves and newspapers" with hints about the plan, are fuiling "the fires of inflaion. Everytime some government officials talks about controls or guidelines or restaurants, business takes it as a signal to raise prices to get [WORD ILLEGIBLE]