Posts Tagged ‘Building Permits’

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Housing Starts, Building Permits Rising Into 2013

Friday, December 21st, 2012

Housing Starts November 2011Single-family hous­ing starts took a small step back in November.

Accord­ing to the monthly Hous­ing Starts report from the U.S. Depart­ment of Com­merce, single-family hous­ing starts tal­lied 565,000 in Novem­ber 2012 on a seasonally-adjusted, annu­al­ized basis. This marks a 4 per­cent decline from Octo­ber, but is more than 100,000 higher than the count from 12 months ago.

Clearly, the nation’s new home con­struc­tion mar­ket is expanding.

On a regional basis, single-family hous­ing starts have been strongest in the Mid­west; and Hur­ri­cane Sandy appears to have affected the num­ber of starts across the Northeast.

As com­pared to one year ago:

  • North­east Region : Hous­ing starts down 19% on an annual basis
  • Mid­west Region : Hous­ing starts up 40% on an annual basis
  • South Region : Hous­ing starts up 24% on an annual basis
  • West Region : Hous­ing starts up 33% on an annual basis

It’s expected that new con­struc­tion growth will con­tinue into 2013, too. This is because the Depart­ment of Com­merce report also showed Build­ing Per­mits mostly unchanged for Novem­ber at 565,000 units on a seasonally-adjusted annu­al­ized basis.

As com­pared to Novem­ber 2011, this marks a 25% increase. Per­mits for multi-family homes are up 17%, too.

There are more build­ing per­mits being issued today that at any time in the last 4 years.

For home buy­ers, this may be good news. Ris­ing per­mits and hous­ing starts sug­gests a more healthy U.S. econ­omy, but it also means that home sup­plies may not be as tight through­out the next few months.

Overly-tight home sup­plies in some U.S. mar­kets have con­tributed to rapidly ris­ing home val­ues. With more con­struc­tion and larger home inven­to­ries, home prices may rise in 2013 less slowly.

The good news, though, is the mort­gage rates remain near all-time lows and low– and no-downpayment mort­gage pro­grams are abun­dant. For today’s home buyer, there are plenty of afford­able ways to pur­chase a home.

Talk with your real estate agent and your loan offi­cer to see which plan works best for you.

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Housing Starts Move To 2-Year High

Thursday, September 20th, 2012

Housing Starts chartThe new con­struc­tion hous­ing mar­ket con­tin­ues to make gains.

Wednes­day, the U.S. Cen­sus Bureau reported Hous­ing Starts for single-family homes up 5.5 per­cent in August to a seasonally-adjusted, annu­al­ized count of 535,000 units nation­wide.

The report marks the fifth month of six that single-family starts increased, and marks the high­est starts tally since April 2010 — the last month of that year’s fed­eral home­buyer tax credit program.

A “hous­ing start” is a new home on which con­struc­tion has started and the steady growth in single-family starts sug­gests a stronger hous­ing mar­ket into 2013.

All four U.S. regions showed single-family hous­ing start growth on both a monthly basis and on an annual one :

  • North­east Region : 4.5% monthly growth; 31.4% annual growth
  • Mid­west Region : 15.6% monthly growth; 74.5% annual growth
  • South Region : 3.2% monthly growth; 17.2% annual growth
  • Mid­west Region : 4.6% monthly growth; 23.9% annual growth

The data is just the lat­est in a series of sig­nals that today’s new con­struc­tion hous­ing mar­ket has put its worst days behind it.

The nation’s home builders appear to agree, as well.

Ear­lier this week, the National Asso­ci­a­tion of Home­builders released its Hous­ing Mar­ket Index, a monthly met­ric which mea­sures home­builder con­fi­dence in the new con­struc­tion market.

The home­builder trade asso­ci­a­tion put the HMI at 40 — a 6-year high. Builders expect a strong fin­ish to 2012 and for momen­tum to carry into 2013 and beyond.

The new con­struc­tion mar­ket — like most of hous­ing — has been fueled by a com­bi­na­tion of the low­est mort­gage rates in his­tory, ample access to low– and no-downpayment mort­gages, and an ever-shrinking sup­ply of new homes for sale.

In July there were just 142,000 new homes for sale nation­wide, down 14% from the year prior. As sup­ply shrinks, all things equal, new home prices rise.

If you’ve been con­sid­er­ing new con­struc­tion, there­fore, talk to builders sooner rather than later. As demand for homes heats up, prices are likely to rise.

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Housing Starts Up 26% In Last 12 Months

Wednesday, June 20th, 2012

Housing StartsSome­times, the hous­ing data head­lines tell just half the tale. The sto­ries on May’s Hous­ing Starts fig­ures are prov­ing to be a ter­rific illustration.

Tues­day, the Cen­sus Bureau released its monthly Hous­ing Starts report. A “hous­ing start” is a home on which con­struc­tion has started.

The report is sep­a­rated by prop­erty type with a sep­a­rate count for sin­gle fam­ily homes such as detached res­i­dences and town homes; for multiple-unit homes such as 2-unit, 3-unit and 4-unit struc­tures; and, for build­ings of 5-units of more such as new condominiums.

In May, Hous­ing Starts fell 4.8 per­cent nation­wide. This runs con­trary to recent hous­ing mar­ket sta­tis­tics and home builder con­fi­dence data which both have sug­gested a recov­ery. The press picked up the story and ran the fol­low­ing headlines :

  • Hous­ing Starts In U.S. Fall 4.8% In May (Busi­ness­Week)
  • Hous­ing Starts Plunge, But Per­mits Surge In Mixed Mar­ket (CNBC)
  • Hous­ing Starts Slump In May (US News)

Although fac­tu­ally cor­rect, these head­lines are some­what misleading. 

Hous­ing Starts did slip 4.8 per­cent last month but that fig­ure accounts for all Hous­ing Starts. It fails iso­late the single-family starts that mat­ter to today’s buy­ers and sell­ers. Home­own­ers rarely buy multi-unit homes or entire apart­ment buildings.

If we remove the report’s tally of 2–4 unit homes and apart­ment build­ings, we find that, in May, single-family hous­ing starts rose for the 4th straight month, reg­is­ter­ing 516,000 homes started on a seasonally-adjusted, annu­al­ized basis. This is the high­est tally since April 2010, the last month of that year’s frderal home buyer tax credit. 

Single-family hous­ing starts are up 26% as com­pared to last year. 

The hous­ing starts report, there­fore — head­lines aside — is the lat­est in a series of hous­ing mar­ket data that points to a sus­tained recov­ery nationwide. If you’re plan­ning to buy a home in 2012, con­sider buy­ing in between now and Sep­tem­ber because after that point, home prices and mort­gage rates are likely to be higher.

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