Construction starts on new housing fell in April for the second month in a row, to a seasonally adjusted annual rate of 1.49 million units, the Commerce Department reported yesterday.
But while housing starts declined 8 percent from March's level, building permits rose 7 percent, the biggest gain since September 1979, indicating that construction will pick up again in the coming months, housing industry leaders said.
Last month's rate of starts was 64 percent higher than the annual rate of 911,000 units in April 1982. The rate for the first four months of 1983 was up 76 percent over the same period last year.
The four-month rate of starts indicates a healthy, long-term trend, despite the April decline, said Harry Pryde, president of the National Association of Home Builders. The organization is sticking with its forecast for 1.5 million actual starts this year, a 40 percent increase over 1982, he said.
"The housing recovery is still the driving force behind this economic recovery and the outlook looks good for another 18 months," Pryde said. "The outlook beyond 1985 depends on whether Congress and the administration reach a budget compromise that will bring down the projected federal deficits."
The nation's home builders were "just catching their breath" during the decline of construction starts last month, said Mark J. Riedy, executive vice president of the Mortgage Bankers Association. The drop "means builders used up many of the developable lots they had in the first flush of the housing recovery . . . I think they're getting other lots ready to build houses on," he added.
Builders began the year with a whopping 33.4 percent increase in housing starts in January over December, and followed up with another 2.9 percent increase in February. Judging from the rise in building permits last month, May and June construction starts may well go up again, Riedy said.
The nation's real estate brokers also found encouragement in the building permit rise, which is "a positive sign that the housing recovery is still on solid ground," said Jack Carlson, economist and executive vice president of the National Association of Realtors.
Another indication that the housing recovery is not endangered by the March and April drop in construction starts is the amount of mortgage loans "in the pipelines." The dollar value of loan applications being processed "is higher than it has ever been. And it isn't all refinancing," Riedy said.
The Mortgage Bankers Association's forecast for 1.6 million actual starts in 1983 "is still a very good number," he added.