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Homebuilding in Colorados Springs remains strong, shows no signs of a slowdown

October 3, 2017 Updated: October 3, 2017 at 11:50 am
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Construction workers work on a new home in the Gold Hill Mesa neighborhood on Monday, July 3, 2017. (Photo by Jerilee Bennett, The Gazette)

Colorado Springs-area homebuilding showed no signs of a slowdown through the first three quarters of the year, a new report Monday suggests.

"People are coming, they've got to live here, they've got to have a place to live," Mark Long, owner of Vanguard Homes and board president of the Housing & Building Association of Colorado Springs, said of the demand for local housing.

Permits issued for the construction of single-family homes in El Paso County totaled 302 in September, a nearly 21 percent increase over the same month last year, according to a Pikes Peak Regional Building Department report on residential and commercial construction.

It was this year's largest year-over-year percentage gain in homebuilding permits, which have increased in six out of nine months so far in 2017.

Year to date, single-family home building permits totaled 2,685, a 3.5 percent increase over the same period in 2016. Last year, permit totals hit their highest level in a decade.

Several factors have driven homebuilding, including low mortgage rates, say industry members and economists.

Last week, rates averaged 3.83 percent nationwide for a 30-year, fixed-rate mortgage, according to mortgage buyer Freddie Mac. Rates began the year slightly above 4 percent, but have dropped below that mark for most of the second half of 2017.

Other factors driving the new home market: A growing population, a stronger economy, a tight supply of homes available for purchase on the resale side of the market and Denver-area buyers moving to the Pikes Peak region in search of lower housing costs.

The city also has scored high in national publications for its quality of life and as a hot housing market, according to several rankings.

"Every economic report I see and hear talks about population growth in Colorado Springs, specifically in El Paso County," Long said. "And we're making the top lists of all these places to live."

Long also credited Springs Mayor John Suthers with doing a good job to address city issues, such as tackling road repairs.

A strong housing market is important because the homebuilding industry is a big part of the local economy. It employs thousands of people, while Colorado Springs and other local governments rely on sales tax revenues from building material purchases to help fund their budgets.

But are they any factors that could derail the pace of homebuilding?

Home prices are headed up because of higher prices for labor and materials, Long said. Changes in building codes also could result in higher home costs, he said.

Rising prices aside, however, Long said he doesn't see anything on the horizon that would slow the homebuilding market.

"Aside from those potential headwinds," he said, "I think that we are going to see more of the same."

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Contact Rich Laden: 636-0228

Twitter: @richladen

Facebook: Rich Laden

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