An improved Colorado Springs economy helped propel buyer demand for new homes during the first quarter.
Building permits issued for single-family homes in El Paso County totaled 970 during the first three months of the year, a 22.2% increase over the same period last year, says a Monday report by the Pikes Peak Regional Building Department.
In March, permits for single-family homes totaled 376, nearly 10% higher on a year-over-year basis.
The Springs has added nearly 25,000 jobs over the past three years, according to the U.S. Bureau of Labor Statistics. Job growth is one of the biggest factors driving the demand for housing, homebuilders say.
Mortgage rates, meanwhile, remain low by historical standards even as they’ve ticked up since the first of the year. This week, they averaged 4.4% nationally for a 30-year, fixed-rate loan, according to mortgage buyer Freddie Mac.
“The market is still very strong,” said Mike DeGrant, board president of the Housing & Building Association of Colorado Springs. “We’re excited about the economy and where we’re at today locally.”
Builders probably could be erecting even more homes, but they lack available sites on which to build, DeGrant said.
“If we could solve that problem, our sales and permits would be better than they are now,” he said.
Despite the lot shortage and rising mortgage rates, builders expect housing demand to remain strong through the remainder of 2018 and into 2019, DeGrant said.
“If interest rates go up, it will slow down buyers moving up a little bit. Do I want to move up, or do I want to remodel what I’m in currently and hang out for a while?” DeGrant said.
“It will definitely have an effect. How big of an effect? Hopefully we don’t see skyrocketing interest rates. Hopefully they hold below 6%, down in that 5% to 5.5% percent range. Then I think we’ve got a pretty constant, steady market.”
Economists, business people and government officials follow the homebuilding industry because it’s a major part of the Springs-area economy.
The industry employs thousands of drywallers, plumbers, electricians and the like, whose spending helps fuel the local economy.
At the same time, Colorado Springs and other local governments collect taxes on building material sales. Those revenues help fund roads, parks, public safety and other services.
Tribune Content Agency