Published by Jim Droz
A foundation is being built for the housing recovery as 2012 makes the turn toward the backstretch of a year many see as the start of something good, or at least a lot better than the previous five or six years. That foundation, appropriately enough, is coming from homebuilder confidence. A report from the National Association of Home Builders in July showed the largest one-month gain since September 2002 in the newly built single-family home market. Gains were shown in homebuilder confidence over rising sales conditions, prospects for future sales and traffic of prospective buyers.
“This is greater evidence that the housing market has turned the corner as more buyers perceive the benefits of purchasing a newly built home while interest rates and prices are so favorable,” NAHB chairman Barry Rutenberg said in a statement.
The Commerce Department also jumped in with good news for the home-building industry with a report that showed housing starts in June rose 6.9 percent. Broken down, single-family home construction, which makes up the largest segment of those new housing starts, increased 4.7 percent. Multifamily housing starts, considered a volatile segment of the market, rose 12.8 percent that month.
Other reasons for an increase in construction could be the lack of available housing for buyers who are entering the market because of improved conditions and the fact that mortgage interest rates remain at historic lows. A market conditions survey from HouseHunt agents found some having difficulty finding houses for clients in their price range or preferred neighborhood because of tight inventory.
“The activity has been absolutely fantastic. We’re actually seeing buyers that are not finding the homes that they’re looking for,” said agent Jeff Schulz, who works in the Minneapolis metropolitan area. “That has resulted in more construction, which is a positive visual sign for the industry.”
A gas and oil boom in eastern Montana has agents in that part of the country scrambling to find housing for clients as well. Michelle O’Rourke, who works in a real estate office in Billings, said “new construction is going like crazy again” as workers from out of state enter the region and look for houses.
“That’s a good sign,” she said. “It’s good for our economy and gives the industry a boost.”
If you’d like to hear what economic and construction experts have to say about where they see things heading as we move forward, the NAHB is planning a webinar on Oct. 24 that will cover changes in the market and where the building hot spots might be in 2013. Visit http://www.nahb.org/reference_list.aspx?sectionID=130 for more information or to register.