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Summary: Building permits are up, which is a good sign that new housing starts will continue throughout 2020 in response to the ongoing housing shortage seen across the nation. This article will get into building permit and housing starts increases in Seattle and the country.
The new construction housing market appears primed for growth this season.
According to the US Census Bureau and the HUD, building permits are up. More specifically, privately-owned residential units authorized by building permits in were up 9.2% in January compared to December and up 17.9% from the same time last year. Single‐family home units authorized by building permits in January increased 6.4% from the month prior.
Building permits are a pre-cursor to new home construction.
Right now, the housing market is short approximately 3.3 million homes, according to Freddie Mac. The housing shortage has been a long-standing issue, and appears to be worsening with each passing year. Simply put, supply has not been able to keep up with demand. Homebuilders are coming up short every year in terms of feeding demand, and fall short by about 300,000 housing unit every year.
Out of all states, Oregon has the biggest inventory shortage, followed by Colorado.
Builders are trying to make up some ground and have started 2020 off strong. New construction of homes jumped in December to a level not seen in 13 years, after low mortgage rates and a strong labor market helped give the housing industry a boost.
According to the Commerce Department, 1.61 million housing starts were recorded in December, an increase of 16.9% from November’s home-building pace.
Housing construction has been increasing since the summer of 2019, thanks in part to declining mortgage interest rates, lower unemployment rates, and a stronger demand for housing. The December building rate, in particular, was the highest number since December 2006.
For buyers of new construction, the news is mixed.
Rising permits and builder confidence may mean that Seattle 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 Washington or Oregon this year, be sure to ask your real estate agent about the local home supply, and how the market is currently trending. With Seattle 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.
Are you looking to apply for a mortgage in Seattle or anywhere else in the Pacific Northwest? Sammamish Mortgage can help. We are a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as the broader Pacific Northwest region that includes Idaho, Colorado, and Oregon. We offer a wide variety of mortgage programs and products with flexible qualification criteria. Please contact us if you have mortgage-related questions.
S&P Case-Shiller Home Price Indices reported the fastest pace of U.S home price growth since 2005.
The housing market looks very different in comparison to just six months ago in WA State. Home builder confidence rose, rates fell, and the housing market is booming now more so than ever.