Homebuilding rose slightly last month in the Colorado Springs area, although the pace of construction in 2014 still trails that of last year, according to a Pikes Peak Regional Building Department report released Tuesday.
Single-family home building permits totaled 229 in March in El Paso County, a 0.9 percent increase when compared with the same month last year, the Regional Building Department report shows. It was the first time that permits rose on a year-over-year basis since December, and only the second increase in the last eight months.
For the first quarter of 2014, single-family permits totaled 566, a 9.4 percent decline from the same period the previous year.
Some builders have pointed to a rise in long-term mortgage rates as a reason for the slowdown in the pace of building. Thirty-year, fixed-rate loans averaged 4.40 percent nationally in the most recent report by mortgage buyer Freddie Mac, up nearly 1 percentage point from a year earlier.
Also, construction industry members have said that frigid temperatures this winter probably prompted some builders to slow construction.
Other possible reasons for the recent homebuilding slowdown: A lack of robust job creation and consumer uncertainty about the effects that federal budget cuts could have on the local economy and area military installations, said Randy Deming, co-owner and CEO of longtime Colorado Springs builder Campbell Homes.
"There's a lot of uncertainty out there in the marketplace with everything that's going on at the national level," Deming said Tuesday. "There's a very strong concern with regard to the effect of sequestration and potential military cutbacks. We don't know what's coming at us. And I think the general public is kind of sitting back with a question mark as to what's going to happen with the military activity. With all the rumors that are floating around out there, I think people are concerned about potentially losing a substantial number of military jobs."
On the flip side, the Colorado Springs area could benefit from base closures or cutbacks in other parts of the country, Deming said.
In any case, he added, "the unknown, I think, is keeping some people on the sidelines from going ahead and buying new homes today."
Campbell is seeing mixed results this year, Deming said. The company's first-quarter home sales are down about 10 percent from the same period last year. But Campbell's customer traffic has been solid, and its permit activity is running ahead of the same time last year - although that's due, in part, to permits being pulled in 2014 for sales that took place in 2013, he said.
"I think we're cautiously optimistic," Deming said. "But, still, we got to get some jobs in this city."
Homebuilding is a closely watched component of the Pikes Peak region's economy. The building industry employs thousands of people - drywallers, framers, electricians and the like - and generates millions of dollars in sales and use tax revenue for local governments.
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