Like the weather, the pace of Colorado Springs-area homebuilding is heating up.
In May, the Pikes Peak Regional Building Department issued 443 permits for the construction of single-family homes in El Paso County, according to a report Friday by the agency.
Last month’s permit total surged nearly 29 percent over the same month a year ago. It was the largest number of single-family permits for any month since 482 were issued in August 2005, records show.
Year to date, single-family permits totaled 1,778, up almost 24 percent over the same period in 2017.
Homebuilding in the Pikes Peak region, like other parts of the country, has gained momentum over the last few years after a prolonged slump because of the Great Recession.
A local and national economic recovery, more jobs and lower mortgage rates have been credited with driving home construction, real estate experts and economists have said.
"You look at the national mortgage rates, and we’re still well below, even though things are rising, we’re below 6 percent in mortgage rates," said Mike DeGrant, board president of the Housing & Building Association of Colorado Springs. Long-term, fixed-rates fell this week to an average of 4.56 percent nationwide, according to mortgage buyer Freddie Mac.
Along with still affordable rates and the addition of thousands of local jobs, millennials are entering the new home market and some active adults are buying smaller homes as they downsize, he said.
"With our local economy and the Denver economy right now, and the influx of people moving to Colorado, I think we’re definitely in for a good year on the homebuilding side," he said. "And look at the number of permits that are pulled for apartments and everything else within the marketplace."
DeGrant said he expects the new home market to remain strong for the rest of 2018. Two problems, however, are hindering the market, he said: Not enough developed home sites are available to build on, while soaring lumber costs are hurting some builders’ ability to purchase the materials they need.
"If we can’t get control of lumber prices, then we’re going to see automatic slowdowns in the market, just based on what we can purchase product-wise for the homes," he said.
The homebuilding industry is a major component of the local economy and is closely watched by business people and economists. Homebuilders employ thousands of people, including drywallers, framers and roofers.
Local government officials also follow the pace of homebuilding because it’s a prime source of revenue. Sales taxes collected on the purchase of building materials are funneled into the coffers of Colorado Springs city government, which uses the money to help pay for public safety, parks and other services.
Contact the reporter: 636-0228
Facebook: Rich Laden
Fewer homes and commercial properties fell into foreclosure last month in Colorado Springs and surrounding areas, El Paso County Public Trustee Tom Mowle said Friday in a monthly report.
Foreclosure notices sent to financially troubled property owners totaled 75 in May, a 21.1 percent drop from the same month a year ago, according to the trustee’s report. Through the first five months of the year, foreclosure notices totaled 389, down 19 percent on a year-over-year basis.
A healthy economy and more jobs mean fewer homeowners are getting into trouble on their mortgages. At the same time, a strong demand for homes and rising property values make it easier for homeowners to stave off foreclosure by selling their properties or refinancing their mortgages.