Houston bucks national trend as housing market strengthens

Noelle Knox
USA Today
Nov. 1, 2006 12:00 AM

Houston's housing market is on track to set another record this year. While sales of existing homes nationwide have fallen for the past six months, they've been rising about 12 percent a month, on average, in Houston. Why?

"We have not had the (price) appreciation other areas have had," says Lorraine Abercrombie of the Houston Association of Realtors. "We just have a lot of different opportunities and different housing around Houston. I think people can find affordable housing everywhere."

Indeed, with home prices in the area one-third below the national median, they look downright cheap. And yet prices are up 6.7 percent this year.

Of course, gushing oil profits don't hurt, either. Houston's economy, while more diversified now with computers, aerospace and health care, still rises and falls with the oil industry.

The city of more than 2 million, the largest in Texas, continues to grow. And with plenty of vacant land around, construction is keeping up with demand. Construction permits for single-family homes totaled 36,128 through August, nearly 15 percent more than in the first eight months of last year.

Housing Starts Rise in September

Oct. 18, 2006, 8:13AM
© 2006 The Associated Press

WASHINGTON — Construction of new homes and apartments, which had been falling in the face of a weakening housing market, posted an unexpected increase in September.

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The Commerce Department reported that construction rose by 5.9 percent last month to a seasonally adjusted annual rate of 1.772 million units. It was the first increase after three consecutive monthly declines.

Analysts, however, still expect housing to move lower as builders continue to work through record levels of unsold homes. Building permits, a good sign of future activity, fell in September for an eighth consecutive month.