July building construction up from a year ago, down from June

Residential construction permits skyrocketed 40 percent in July from a year ago but were down slightly from the number in June, according to a Builders Association of the Twin Cities report released Thursday.

In July 257 permits were issued for 370 units, down from June's 260 permits for 385 units.

Despite wavering consumer confidence as the state shut down over the budget impasse, recent studies have "confirmed that Americans still want to own their own home," association president Rich Riemersma said in a statement. "And July's permits seem to bear that out."

Owning a home, long part of the American dream, has taken hits the past few years as the housing crisis pushed many Americans into foreclosure or saddled them with a house they could barely afford but couldn't sell. But a study released earlier this month by the National Association of Home Builders found 75 percent of respondents believed owning a home is worth the risk of the housing market fluctuations. About 95 percent of home owners said they're happy with their decision to own a home, while 73 percent of non-homeowners said buying a house was a goal.

In a poll conducted by the New York Times and CBS, nearly 90 percent of Americans still feel that homeownership is essential to the American dream and want it to stay that way for themselves and others.

Mike Swanson, division vice president for Rottlund Homes, said the state shutdown during July that had been expected to have an adverse effect on home builders seeking state electrical inspections wasn't as bad as they had feared.

"The situation is most of the larger suburbs have their own in-house inspectors, so those cities were not impacted," Swanson said. "The metro areas went to their city attorney and found a way to contract around the state and have electrical inspection by working with neighboring cities."

"The debt ceiling could hold back our anemic growth because things are picking up a little bit here," Swanson said. "The economy just needs to continue moving forward."

Farmington topped the list this month with permits to build 71 units; next highest were Blaine, Chanhassen, Plymouth and Shakopee.

Sheryl Kempfert, a sales manager with Stone Cottage Construction in Apple Valley, said Farmington's new high school and affordable homes have helped fuel increased construction in the area. The economic downturn caused many lots in the area to go back to banks, but now construction companies have been able to buy these same lots for 40 percent to 60 percent lower than the original price.

"Right now it's attractive for buyers to come and purchase a new-construction home with amenities buyers are wanting and still be under the [$300,000] price range," Kempfert said. "This is not a doom and gloom like they're reporting -- we just saw pending sales are way up, and we can't build them fast enough."