The pace of Colorado Springs-area homebuilding rose slightly in April as buyers continued to turn to new houses, in large part, because of a shortage of existing properties listed for sale.
“There’s nothing available on the resale market,” said Mike Hess, executive vice president of sales and marketing at Vantage Homes in the Springs. “I haven’t looked at the stats in the past couple of days, but there just isn’t anything available, so everybody’s moving to the new home side of it.”
A report released Monday by the Pikes Peak Regional Building Department showed building permits for the construction of single-family homes in El Paso County totaled 358 in April, a 2.3% increase over the same month last year. That figure include permits for single-family, detached homes, not townhomes and condominiums.
It’s the 12th straight month that building permit numbers have risen on a year-over-year basis, though April’s increase slowed from a stretch of double-digit percentage gains in the second half of 2020 and the first two months of 2021.
Through the first four months of 2021, single-family home building permits totaled 1,747, up nearly 25% on a year-over-year basis, the Regional Building Department report showed.
Homebuilders have been the beneficiaries of a strong demand for housing and the tight supply of existing homes on the resale side.
The inventory of existing homes for sale over the last few months has plunged to its lowest point on record during the past 25-plus years, according to Gazette historical data.
In March, just 462 homes were listed for sale in the Colorado Springs area, according to the Pikes Peak Association of Realtors’ most recent monthly inventory figure. By comparison, there were 1,941 homes for sale five years earlier in March 2016.
Rock-bottom mortgage rates, meanwhile, have helped fuel the demand for new homes and resales. Last week, 30-year, fixed-rate mortgages averaged 2.98% nationwide, mortgage buyer Freddie Mac reported. A year earlier, long-term mortgage rates were at 3.23%.
Vantage Homes, like other builders, has seen a surge of people who have relocated to Colorado Springs from large metropolitan areas, Hess said.
Some people who’ve moved here have come for jobs, he said. Other newcomers have discovered during the COVID-19 pandemic that they can work remotely and have moved to areas with a nicer quality of life.
“During COVID, so many people learned that they don’t have to be where their job is to do their job,” Hess said. “They can work in Colorado for a company that is in California. We’re seeing a huge influx of people buying that are out-of-state buyers.”
Another demographic driving new home construction: increasing numbers of millennials, who have shifted from living in apartments or condominiums and now have bought houses, Hess said.
“They’ve said, ‘OK, I lived in a condo or I lived downtown. I’m in my, whatever it is, late 20s, early 30s, mid-30s. I’m starting to have a family and I need to move into a single-family home,’” Hess said. “On top of the ‘re-lo,’ you’re also getting that age group that is really starting to flood the market looking for houses.”