March 3, 2014 Updated: March 3, 2014 at 3:02 pm
The recent slowdown in local homebuilding continued last month, as permits issued for the construction of single-family homes tumbled by nearly one-fourth when compared with a year earlier, according to a Pikes Peak Regional Building Department report released Monday.
Single-family permits totaled 166 in El Paso County in February, a 24.5 percent drop from the same month in 2013, the Regional Building Department report showed. It was the sixth time in the last seventh months that building permit numbers fell on a year-over-year basis.
For the first two months of 2014, building permits totaled 337, down about 15 percent from the same period last year.
Despite the slowdown, several homebuilders have said in recent months that they're not overly worried.
Builders have cited last year's rise in long-term mortgage rates as one reason for the slowdown; buyers who had been accustomed to 30-year, fixed-rate loans in the 3.5 percent neighborhood still are getting adjusted to rates that have risen beyond 4 percent. Thirty-year loans averaged 4.37 percent nationally last week, down from 4.53 percent at the start of this year, according to mortgage buyer Freddie Mac.
Another possible factor for the slower start in homebuilding so far in 2014: Frigid temperatures during a couple of stretches in January and February, said Joe Loidolt, president of Springs-based Classic Communities and this year's board president of the Housing and Building Association of Colorado Springs.
Classic, for example, won't pull permits for speculative homes - those without a buyer - when it's so cold because it's too difficult to work on them, Loidolt said.
"You can't pour concrete on frozen ground," he said.
Instead, Classic will turn its attention to homes that are underway and already have been purchased, Loidolt said.
"It's had an effect on the amount of permits that Classic pulled," Loidolt said of the weather. "I imagine it's affected others, too."
Loidolt said he still expects the pace of local home construction in 2014 to be similar to last year. Building permits totaled 2,688 last year - the most since 2006.
Economists and builders keep a close watch on permit activity because it measures a key component of the local economy. The area's homebuilding industry employs thousands of people and generates millions of dollars in sales and use tax revenue for local governments.
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