Published: July 1, 2013
The pace of local home construction soared during the first half of 2013, while fewer properties fell into foreclosure during the same period - fresh signs that the Colorado Springs-area housing market continues to recover, two reports released Monday show.
Single-family home building permits issued in the Springs and El Paso County totaled 1,492 from January through June, up nearly 46 percent over the same period last year, according to the Pikes Peak Regional Building Department.
It was the best first half of any year since 2,158 single-family permits were issued in 2006, Regional Building records show.
For the month of June alone, single-family permits totaled 272 or roughly a one-fourth, year-over-year increase.
Like other economic sectors, homebuilding faltered over the last several years as the local and national economies cratered into recession. Now, increased homebuilding is one of several signs that the economy has improved, said Fred Crowley, an economist at the University of Colorado at Colorado Springs.
Job growth has picked up, the area's unemployment rate has fallen, motor vehicle sales are climbing and consumer confidence has improved, he said.
"People are feeling better," Crowley said. "Everything is pointing toward an improved local and national economy."
Low mortgage rates and higher household incomes have driven buyers into the new home market, Crowley said. Meanwhile, prices on the re-sale side of the market also are on the rise, allowing some homeowners to use the extra cash they receive from a home sale to move up to a new house, he said.
Although mortgage rates have ticked upward of late, rising last week to an average 4.46 percent for a 30-year, fixed-rate loan, Crowley said he doesn't expect the increase to hurt homebuilding. Rates remain relatively low, Crowley said. New homebuyers who face slightly higher rates might cut back on an upgrade in their house - but they'll still buy, he said.
Building permits are a closely watched measure of the health of the homebuilding industry and the local economy.
Home builders and their subcontractors employ thousands of people - framers, drywallers, plumbers and the like. Likewise, local governments collect millions of dollars each year in sales tax revenue from the sale of building materials; that money goes to help pay for roads, parks and other basic government services.
Foreclosure filings in the Springs and El Paso County, meanwhile, totaled 1,049 during the first half of 2013, according to the El Paso County Public Trustee's Office. That's down almost 40 percent from the same period last year.
For June, foreclosure filings totaled 162, a nearly 52 percent year-over-year reduction.
Lower mortgage rates and higher home prices are helping more people avoid foreclosure by increasing the chance that they can refinance or sell their home, real estate experts have said.
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