Housing starts declined in the last month of 2010, reaching their slowest pace since October 2009, new Commerce Department data show. On a positive note, building permit issuance rose 16.7 percent in December 2010, which might indicate that builders are upbeat about the upcoming spring selling season.
The National Association of Home Builders’ Housing Market Index remained steady this month at 16 for the third month in a row, indicating that home builders’ confidence is still low. Perceptions on current single-family home sales and sales expectations for the next six months remained the same as last month. Perceptions of prospective buyer traffic gained one point.
A survey of homeowners who purchased a home last year found that their primary motivations were affordability and the desire for more living space. The survey by Weichert Realtors Inc. polled 1,261 buyers who bought a home between July 1 and Dec. 31. Twenty-eight percent said their main reason for purchasing a home was “favorable financing,” double the amount in 2008.
The average size of single-family homes completed last year fell 3 percent, the National Association of Home Builders announced last week at the International Builders’ Show. The average size of homes completed in 2010 was 2,377 sf, down from a peak of 2,521 sf in 2007.
Home buying activity is on the rise to open the new year. The Mortgage Bankers Association reported that the number of applications for home mortgages crept up 2.2 percent last week. However, when the index isn’t adjusted for the New Year’s holiday, the numbers are 47.5 percent higher compared to the previous week.
Mortgage rates are low and home prices aren’t showing signs of going up anytime soon. And now state and local governments are stepping in to help many home buyers with their down payments. SmartMoney provides a rundown of seven different down payment assistance programs across the country.
Fannie Mae has started testing a foreclosure-prevention program in Florida that is designed to bring banks and troubled borrowers together earlier. The idea behind the program is to get banks and borrowers to negotiate mortgage modifications and other alternatives before foreclosure becomes the only option. The program gets borrowers meeting with the banks four months after falling behind on late payments.
NAHB Chief Economist David Crowe is forecasting 575,000 single-family home starts in 2011, a 21 percent bump over an estimated 475,000 units started in 2010, according to his annual state of the market report at the International Builders’ Show in Orlando last week. Crowe and other economists at the show agreed that the housing market will see steady improvements in activity this year, followed by considerable gains in 2012.
Many homeowners who put off remodeling and repairs last year due to the economy are now ready to make the investment, a new survey reported.
Construction spending rose slightly in November, increasing to a seasonally adjusted rate of $810.2 billion, according to Census Bureau data. The rate is 0.4 percent higher than the revised October rate of $806.7 billion. Construction spending for the first 11 months of 2010 totaled $753.9 billion, 10.6 percent less than the same period in 2009.