Housing permits, starts hit four-year high behind limited supply, strong demand
October 19th, 2012 by
In case you missed the good news from the U.S. Census Bureau, new construction is continuing to show momentum.
Housing permits hit a four-year high in September, up 45.1 percent from September 2011. New starts were also up 15 percent from August and 34.8 percent from last September.
What’s driving the comeback?
“It’s called population growth,” Economist Patrick Newport of IHS Global Insight told BuilderOnline.com. “Every year the U.S. population increases by about 3 million and the number of households increases by 1.1 million to 1.3 million. New homes have to be built to meet demand from this segment.”
Nick Timiraos of the Wall Street Journal attributes construction to the eager prospective buyers who are finding the inventory for existing homes is extremely limited and competition is fierce. Four years since the housing bubble burst, supply-and-demand is a real thing.
“Consider the case of Sacramento, Calif. The supply of previously owned homes listed for sale in September was down by 60% from one year ago, led largely by big declines in bank-owned listings.
“Now, builders are benefiting from sharp declines in the share of foreclosed properties. Just 14% of local home sales in September were foreclosures, the lowest in more than five years and down from nearly 50% as recently as February 2011.”
Consequently, prospective buyers are claiming up near-record mortgage rates and building new while the money makes sense. So if you live in an area with a rapidly shrinking inventory for existing homes, now is the time to market aggressively!