Susan Deierling, Assoc. Broker
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Realty Executives Northern Arizona
Tag Archives: Building Permits
Single-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 in Sedona 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.
The 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 AZ 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 Cornville 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.
Sometimes, 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 throughout AZ. 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.
The new construction housing market continues to improve.
One day after the National Association of Homebuilders reported a 5-year high in homebuilder confidence, the U.S. Census Bureau reports that single-family housing starts rose 2 percent for the second straight month last month.
In April, on a seasonally-adjusted, annualized basis, the government reports 492,000 single-family housing starts. A “housing start” is a home on which ground has broken.
In addition, March’s single-family housing starts were revised higher. What was previously reported as a three percent loss was re-measured and changed to a 0.2% gain.
The April tally marks a six percent increase over the one-year moving average and, along with the March revision, suggests that the springtime housing market may have just been seasonal.
In March, a number of reports suggested a housing retreat :
Since then, though, low mortgage rates and affordable home prices appear to have sustained the new construction market, which now appears poised for a strong 2012.
As one mark of proof, active buyers of newly-built homes in Cottonwood and nationwide are scheduling “model home” showings at the fastest pace since 2007. The burst of foot traffic high has builders upping their sales expectations for the next 6 months.
A scenario like this would normally lead new home prices higher, but the pressure for prices to rise may be offset by the amount of new home supply coming online.
In addition to a rise in Housing Starts, the Census Bureau also reports that, in April, the number of Building Permits for single-family homes rose 2 percent to move to its second-highest level since March 2010 — the month preceding the end of the 2010 federal Home buyer tax credit.
86 percent of homes break ground within one month of permit issuance.
It’s unclear whether housing is on a steady path higher, but there’s a growing body of evidence that suggests the market bottom has already passed.
Tuesday, the government released its March 2012 New Residential Construction report.
The report is made up of three sections, each related to a phase of the “new home” market. The report’s first part is Building Permits; the second is Housing Starts; the third is Housing Completions.
Of the three sections, it’s Housing Starts that gets the most attention from the press — mostly because, of the triad, it’s the simplest for a layperson to understand. However, the manner in which Housing Starts data is reported can be misleading.
Today’s newspapers offer up an excellent example.
According to the Census Bureau, total Housing Starts fell by 6% in March as compared to the month prior. 654,000 units were started on a seasonally-adjusted annualized basis.
For Housing Starts, it’s the lowest reading in 5 months, a statistic suggesting that the housing market may have lost some momentum. Much of the press covered the story from a “housing is slowing” angle.
A few published headlines include :
- U.S. Housing Starts Unexpectedly Drop To 5-Month Low (BusinessWeek)
- New Home Constructions Takes Pause (CNNMoney)
- A Delayed Winter For Housing (US World And News)
Although these headlines are accurate, they tell just half of the story.
Housing Starts did drop in March, but if we remove a subset of the data — structures with “5 or more units”; a grouping that includes condominiums and apartment buildings — we’re left with Housing Starts for single-family residences only. It’s this data that matters most to buyers in Cornville and nationwide.
Few home buyers buy entire apartment buildings. Most buy single-family homes.
In March, single-family Housing Starts were down 0.2% from the month prior, or just 1,000 units on a seasonally-adjusted, annualized basis.
That’s hardly a drop at all.
The new construction housing market appears primed for growth this season.
According to the Census Bureau, the number of single-family building permits issued in February rose to 472,000 on a seasonally-adjusted, annual basis, marking the highest building permit tally since April 2010 — the last month of that year’s federal home buyer tax credit program.
Building permits are a pre-cursor to new home construction.
In 2011, from the date of permit-issuance to the date of “ground-breaking”, an average of 27 calendar days passed. February’s data, therefore, is a signal that the market for newly-built homes should be strong this year, an idea supported by the most recent homebuilder confidence survey.
As buyer foot traffic soars, homebuilders expect to make more sales in the next 6 months than at any time since the housing market’s collapse. Builder confidence is at a 5-year high.
Last month, however, single-family housing starts slipped.
As compared to January, February’s single-family housing starts fell by 50,000 units on a seasonally-adjusted, annualized basis. The 10% drop represents the largest one-month drop since February 2011. It’s a statistic that may suggest that this year’s results are simply seasonal.
For buyers of new construction, the news is mixed.
Rising permits and builder confidence may mean that Cottonwood homebuilders will be less willing to negotiate with today’s buyer on upgrades and/or home prices. However, as more new home supply is set to come online, excess housing stock could help keep home prices low.
If you’re planning to buy new construction in Arizona this year, be sure to ask your real estate agent about the local home supply, and how the market is currently trending. With mortgage rates low and the summer buying season approaching, you may find some of your best deals of the year available in just the next few weeks.
The housing market has carried forward its year-end momentum.
According to the Census Bureau, on a seasonally-adjusted, annualized basis, January’s Single-Family Housing Starts crossed the half-million unit marker for the second straight month.
This hasn’t happened in close to 2 years and is the latest in a series of strong data that suggests the beleaguered housing market has turned a corner — both nationally and locally in Cottonwood.
Although single-family starts slipped 1 percent from December, January’s annualized 508,000 figure represents a 16% spike from January 2011 and is the second-highest reading since April 2010 — the last month of 2010’s federal home buyer tax credit program.
A “housing start” is a new home on which construction has started.
The strength of January’s Housing Starts data surprised Wall Street analysts and is partially responsible for Thursday’s unexpected mortgage rate spike.
In hindsight, though, we should have seen this coming.
Earlier in the week, the National Association of Homebuilders announced that homebuilder confidence had climbed to its highest point since 2007 amid builder reports of rising sales volume and the most foot traffic from buyers in more than 4 years.
In addition, builders expect to sell more homes in 2012 than in 2011.
Builders are building and buyers are buying.
Meanwhile, as another sign of housing market strength, the Census Bureau reports that, in January, Building Permits moved to a multi-year high as well. Permits issued for single-family homes in January rose 1 percent from December, a statistic that suggests housing will continue its run through the spring season, at least.
86 percent of homes break ground within one month of permit issuance.
It’s a good time to be a home buyer. Mortgage rates and home prices are low. Housing market momentum, however, is building. If you’re on the fence about whether to buy a home in Verde Santa Fe , ask your real estate agent for additional market information.
The cost of home-ownership may never be as low as it is today.