HOMEBUILDING RISES IN 2016
Housing construction in the Twin Cities metro got off to an unusually strong start and homebuilders are already on the hunt for new hires.
During January, area homebuilders were issued 404 permits to build 699 units, according to data collected by the Keystone Report for the Builders Association of the Twin Cities (BATC). That was a 31 percent increase in the number of permits and a 32 percent increase in the number of units compared with the same four-week period last year.
As it did for most of 2015, apartment construction represented a large share of the new housing plans. Rental apartments and other attached housing accounted for 44 percent of all planned units.
"We're feeling optimistic that, after two flat years, we will see the boost in activity that we've been waiting for," said Meg Jaeger, BATC's 2016 president. "With the Twin Cities housing inventory at a 13-year low and other economic indicators looking up, this should be a good year for residential construction."
With a new apartment building on the drawing board, Golden Valley took the top spot for most units (200), followed by Minneapolis (80), Woodbury (29), Plymouth (25) and Blaine (24).
After a disappointing 2015 for single-family construction, homebuilders in the Twin Cities and beyond have been eager for any indication of deepening demand, and the latest data suggests that 2016 might be the turnaround year they have been anticipating.
Nationwide, housing starts slipped 2.5 percent in December, the latest month for which data is available, despite an increase in new home sales. That's likely because of seasonal factors. The U.S. Census Bureau said that new home sales had increased 10.8 percent during the month, helping boost 2015 sales just past the half-million mark.
New and existing home sales this spring will no doubt get a boost from the lowest mortgage interest rates in several years. Despite an expectation that rates were going to rise in the early months of 2016, rates have tumbled on the heels of economic toil abroad. According to the latest survey from Zillow.com, the average rate for a 30-year, fixed-rate mortgage was 3.5 percent, the lowest in at least three years.
Lower mortgage rates are expected to help builders attract more entry-level and first-time buyers. According to the U.S. Census Bureau, the median sales price of new homes fell 4.3 percent to $288,900, mostly because of a decline in sales over $750,000 and an increase in sales between $200,000 and $300,000.
Twin Cities homebuilders are already gearing up for what they expect will be a busier than normal than spring. BATC's fourth annual Job and Career Fair will be from noon to 4 p.m. Thursday, Feb. 18, at the Mall of America rotunda. Builder members are looking to fill more than 200 residential construction jobs with more than 20 local companies.