The pace of Colorado Springs-area home construction picked up again last month, as rock-bottom mortgage rates and a strong local economy continued to drive the local demand for houses.
Building permits issued for the construction of single-family homes in El Paso County totaled 350 in October, nearly 36% higher than the same month last year, according to a report released Friday by the Pikes Peak Regional Building Department.
It was the second consecutive monthly gain in permit activity on a year-over-year basis, after declines during the first eight months of the year.
With October’s tally, year-to-date single-family building permits now total 3,046, the Regional Building Department report shows.
This is the fourth consecutive year that permits have surpassed the 3,000 mark, which continues a turnaround for the Springs’ homebuilding industry from what it experienced during the Great Recession. In 2009, El Paso County permits totaled just 1,105.
“It seems pretty good,” Jim Stiltner, owner of MasterBilt Homes, a Springs-area semicustom and custom builder, said of the local market. “Traffic is decent, and sales are good.
“It seems like we’re kind of spreading it all over El Paso County now, too,” he added of the homebuilding. “You’ve got 35-acre lots being sold. Monument and Palmer Lake is where we’ve been focused for a couple of years, and it’s been great up here.”
Long-term mortgage rates that remain attractive for buyers have been a major reason that homebuilding is doing well, Stiltner said.
This week, 30-year, fixed-rate loans averaged 3.78% nationally — up slightly from a week earlier, but well below the 4.5% rate at the start of this year, according to mortgage buyer Freddie Mac. Rates had been as low as 3.49% in early September.
“Whoever thought you’d be able to get a 30-year fixed-rate for under 3.5%?” Stiltner said. “That’s amazing.”
The overall strength of the local economy, meanwhile, has boosted consumer confidence; the Springs-area unemployment rate was 3.2% in September, the lowest in two years, while first-quarter wages rose by 5.1% on a year-over-year basis.
“Americans are spending money right now,” Stiltner said. “They feel comfortable in the economy, and they’re out buying stuff.”
Homebuilding is a key industry for the Springs and the Pikes Peak region, and its health is closely watched by local economists and government officials.
Builders and subcontractors employ thousands of framers, drywallers, electricians and the like, whose wages and spending pump money into the economy.
At the same time, builders buy millions of dollars worth of construction materials; the sales taxes they pay on those items go into the coffers of the city and other local governments, which use the money to help pay for roads, parks and other basic services.