Economic Reports, Real Estate
Housing Starts Down Now, But Housing Permits Heat Up
January 22, 2010 by James K Barath, CMPS · Leave a Comment
A “Housing Start” is a privately-owned home on which construction has started. It’s an important gauge of housing health because it tracks new housing stock nationwide.
In December 2009, starts fell by nearly 7 percent.
The news is mildly disappointing but not too bad. The likely cause for the Housing Starts drop is December’s rough weather conditions. It’s tough to break ground when Mother Nature won’t coordinate and last month was especially hazardous in Northwest Indiana for the communities of Chesterton and Valparaiso.
More cheery, however, is that for the second straight month, Housing Permits exploded.
A housing permit is a certification from local government that authorizes construction. After posting a 7 percent gain in November, permits rose by another 8 percent in December.
It’s a signal that housing is, indeed, in recovery — despite the falling number of actual starts. More permits mean that builders plan to bring more homes to Crown Point, Portage, Saint John and Schererville for what’s expected to be a very busy spring home-shopping season.
According to the Census Bureau, 82% of homes start construction within 60 days of permit-issuance. Therefore, Housing Starts should start rising soon anyway.
For home buyers in Northwest Indiana, the news couldn’t be better.
With more homes coming online, competition among home sellers in Highland and Munster should increase, and that will suppress the rise in home prices nationwide.
It’s basic economics. When home supplies grow faster than home demand, prices fall.
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About the Author: James K Barath is a Certified Mortgage Planning Specialist and your Northwest Indiana FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James K Barath today and Get Qualified for Your FREE FHA Home Loan Approval!
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