August 10, 2019
Increasing Builder Confidence
Last year many—including us—wrote about the strange trend in the construction industry that, despite rises in employment, wages, and overall consumer confidence, builders were not projecting much confidence. Due in part to with the international tariffs that were put on raw goods that are necessary to the trade, and, perhaps more directly, a sharp rise in mortgage rates in November 2018, construction starts were down, and showing few signs of increasing.
But in the early months of 2019 that trend seems to have changed. In January, housing starts increased 18.6 percent, according to data released by the Census Bureau and the US Department of Housing and Urban Development in early March.
This increase, which amounted to 1.23 million new housing starts, was an increase of .20 million over December 2018’s number. It ran in tandem with an increase in the number of building permits, which went up 1.4 percent month-over-month to reach 1.34 million—eclipsing December’s 1.32 million. Despite these increases, these starts were lower in number than they were in January 2018.
The real news, though, was in housing completions, which rose to 1.24 million in January, which was an increase on both the month-over-month basis—a full 27.6 percent over December 2018’s 975,000—and, as importantly, on the year-over-year basis—2.1 percent over last January 2018’s 1.21 million.
This all indicates that the rising consumer confidence has also resumed its influence on the construction industry. Lower mortgage rates—meaning higher purchasing power—and the increased number of pending house sales seems to have turned construction confidence around for the better.
While single-family starts remain low, they did increase during this period—a full 25.1 percent over December’s number, and 4.5 percent higher than January 2018.
These new houses will improve the purchasing power of consumers. If you find yourself in the market for a newly-built home, you want to be certain youreceivea clear claim to title at closing. My team and I at Topouzis & Associates, P.C. come in at this stage, performing title searches to confirm (or refute) claims of deed and title (which inhere to the land on which a new home may be built), and to fix any defects if possible. We do things by the book, but think outside the box to ensure every element of the title conveyed is free and clear of any unanticipated problems.