While thirty-one states experienced year-over-year growth in single-family permits through the first four months of the year as reported This Week in Real Estate, 15 states recorded growth rates higher than the national average and nine of these are from the Western region of the country. Below are a few highlights from the last week of June that influence our business:
* Western States Lead Single-Family Residential Permits Growth. Over the first four months of 2018, total number of single-family permits issued nationwide reached 279,302. On a year-over-year basis, this is an 8.4% increase over the April 2017 level of 257,719. The results from the SOC are similar, single-family permits over the first four months of 2018 was, 278,500 which is 8.6% ahead of its level over the same period of 2017, 256,500. Between April 2017 and April 2018, 31 states saw growth in single-family permits issued while 19 states and the District of Columbia registered a decline. Colorado recorded the highest growth rate during this time at 34.2% while single-family permits in the District of Columbia declined by 69.0%, but from a small base, from 145 in 2017 to 45 in 2018. The 8.4% increase in nationwide growth rate in single-family permits, is largely due to the aggregate increase in single-family permits across the Western states. Out of the 13 which are classified as Western states, nine states recorded single-family permit growth exceeding the national average. A total of 15 states recorded growth rates higher than the national average and nine of these came from the Western region of the country.
* Case-Shiller: Higher Home Prices and a Reality Check. Home prices continued their climb with the S&P CoreLogic Case-Shiller National Index up 6.4 percent. Cities west of the Rocky Mountains continue to lead price increases with Seattle, Las Vegas and San Francisco ranking 1-2-3 based on price movements in the trailing 12 months. The favorable economy and moderate mortgage rates both support recent gains in housing. One factor pushing prices up is the continued low supply of homes for sale. The months-supply is currently 4.3 months, up from levels below 4 months earlier in the year, but still low.” However, his comments sought to put the continuing rate of appreciation in perspective. David Blitzer said, “Looking back to the peak of the boom in 2006, 10 of the 20 cities tracked by the indices are higher than their peaks; the other ten are below their high points. The National Index is also above its previous all-time high, the 20-city index slightly up versus its peak, and the 10-city is a bit below. However, if one adjusts the price movements for inflation since 2006, a very different picture emerges. Only three cities – Dallas, Denver and Seattle – are ahead in real, or inflation-adjusted, terms. The National Index is 14 percent below its boom-time peak and Las Vegas, the city with the longest road to a new high, is 47 percent below its peak when inflation is factored in.”
* Fannie Mae: Both Renters and Homebuyers Feel Pessimistic About Affordable Housing Availability. Renters and owners are more likely to be concerned about housing affordability when they have to find a new place to live compared to the affordability of where they already live, according to a report from Fannie Mae. Basically, people feel more comfortable paying what they pay now and are concerned that their payment (whether it’s rent or a mortgage) will be less affordable than what they currently have. This may explain why people are moving less frequently and, by extension, explain some of the shortage of homes on the market. According to a new survey from Fannie Mae, just 8% of owners with a mortgage said their mortgage was not affordable, whereas as a whopping 45% of owners overall feel that it is difficult to find affordable housing in their area.
Have a productive week.