According to a June 2018 report published by the National Association of Home Builders (NAHB), there has been a recent increase in residential building permits nationwide. This means we could see a much-needed uptick in new-home construction in 2019 and beyond.
In Washington State, where the housing market is particularly tight, single-family home building permits rose 12.4% from April 2017 to April 2018.
More Building Permits: A Good Sign for Washington Home Buyers?
In June, NAHB reported that the total number of single-family home construction permits issued across the country rose to 279,302. “On a year-over-year basis, this is an 8.4% increase over the April 2017 level of 257,719,” the industry group reported.
A lot of this growth has been seen in the western half of the U.S., including Washington State. A large part of the 8.4% increase mentioned above occurred in western states.
As NAHB reported: “Out of the 13 which are classified as Western states, nine states recorded single-family permit growth exceeding the national average. A total of 15 states recorded growth rates higher than the national average and nine of these came from the Western region of the county.”
In the state of Washington, single-family construction permits rose by 12.4% from April 2017 to April 2018. This is a good sign for the state’s housing market. Real estate markets across Washington have suffered from ongoing inventory shortages in recent years. There just aren’t enough homes listed for sale to satisfy the demand from buyers. Things are tight for renters, as well.
Multifamily Construction Up as Well
NAHB has also reported an increase in the number of permits for multifamily home construction. These are units that house more than one family or owner, like duplexes and triplexes. Year over year, there was a 12.6% increase in multifamily permits in April 2018.
Of course, there can be a lengthy lag time between the issuing of a building permit and the completion of the construction project. So the recent uptick in permits might not make an impact on Washington’s tight housing markets for some time. But it’s good to see there might be some relief down the road.
How the Housing Market Got So Tight
Our current issues with housing inventory can be traced back to the housing and economic crisis that began in 2008. Across the U.S., new-home construction slowed considerably during and following the Great Recession. And while the industry has ramped back up since then, there is still a shortage of available homes in many areas.
This has led to a kind of “limbo” situation in many real estate markets, including those in Washington State. Homeowners who are otherwise ready to sell are reluctant to list their homes, out of fear that they won’t be able to find anything else to buy. This makes it harder for buyers to find a suitable property.
Housing inventory is particularly tight in the Seattle metro area. As of May 2018, the real estate markets in Seattle, Tacoma and Bellevue all had roughly a one-month supply of homes for sale. That’s well below what is considered to be a normal or “balanced” market.
So any signs that there might be more inventory coming onto the market in Washington’s real estate markets could be seen as good news — especially for those planning to buy a home in the near future.
An Uptick in Real Estate Listings
The Northwest Multiple Listing Service (NWMLS), which covers much of the Pacific Northwest, recently reported an increase in active real estate listings. That’s another good sign for future home buyers.
According to their July 5 report, there were 15,234 active listings and 1.5 months of supply across the region at the end of June. That’s an increase over the same time last year.
King County, Washington was singled out as having one of the largest increases in homes listed for sale. NWMLS reported: “The supply of active listings in King County surged 47 percent from a year ago, boosting the months of supply to just under 1.3 months — the highest level since September 2016 when there was 1.37 months of supply.”
Have questions? Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as the broader Pacific Northwest region. Please contact us if you have mortgage-related questions.