Housing starts exceed 16,000 in Califorina

California home builders beat a record established in 1989 by starting construction on more than 16,000 homes in June, the California Building Industry Association announced Thursday.

The state is on track to build slightly more homes in 2005 than were built last year, the strongest year for housing construction since 1989.

During the first six months of 2005, single-family home construction continued its surge with 80,540 housing starts, almost 2 percent more than in 2004. Multi-family construction, however, dipped to 25,600, almost 5 percent less than in 2004.

"The demand for new homes, condominiums and apartments is still phenomenally strong, and builders are doing everything we can to meet the housing needs of a growing population," Steve Doyle, a San Diego home builder and president of the CBIA, said in a written statement.

"Now that the weather is better, we're doing all we can to make up for lost time," he said, referring to the very wet winter experienced during the first half of the year, which delayed construction projects across the state.

In June, builders started nearly 11 percent more homes - 16,000 - than they did in June 2004 and almost 10 percent more than in May of this year.

CBIA chief economist Alan Nevin said the increased production indicates that California is on target to meet or beat the "exceptional performance" of last year.

Doyle noted that although prices are moderating, he sees no signs of bubble-bursting in the housing market as some have forecast.

"Because population growth continues to push housing demand, it's very unlikely that prices will fall sharply as some economists have been predicting," he said.

He urged the building industry to continue this record pace because a higher supply eventually should bring down prices in the affordable range for the first-time home buyers.