Housing Starts Touch 4-Year High
Home starts skyrocketed 15 percent last month, quelling any fears of a sustained recovery. Construction on new homes climbed to an annual rate of 872,000. And building permits, a measure for future construction, rose 11.6 percent to an annual rate of 894,000, according to the Commerce Department. That?s a four-year high.
The new numbers should send a collective sigh of relief among builders, investors and real estate agents. The latest report shows that recovery is well underway from what some are calling the worst slump since the Great Depression. Permits for single-family homes climbed 6.7 percent to an annual rate of 545,000, while permits for multifamily residences, such as apartment buildings, rose 20.1 percent.
?Housing is once more showing signs of life,? John Williams, president of the Federal Reserve Bank of San Francisco, said in a speech, according to Bloomberg. ?The housing recovery includes a rebound in home construction, something particularly important for the health of the overall economy.?
Strong sales, population growth, record low mortgages and dwindling inventory have helped boost the numbers. Economists surveyed by Bloomberg were expecting a 770,000 pace, and estimates ranged from 735,000 to 800,000. The biggest gain in housing starts happened in the West with a 20.1 percent increase.
Mortgage Rates Fall Near Record Lows
Here?s some good news for buyers. The average rate on a 30-year fixed mortgage dropped to 3.37 percent this week from 3.39 percent the week prior, according to mortgage finance giant Freddie Mac. The new rates are nearer to the record low of 3.36 percent that was reached earlier in the month.
The news is really encouraging for buyers who are waiting to lock in on the unbeatable rates. 30 -year rates have hovered below 4 percent all through the year. Analysts expect the historic low rates to lure in enough buyers to egg on the real estate market recovery.
Rates on 15-year-mortgages also touched record lows at 2.66 percent, down from 2.7 percent last week.
According to the Associated Press, rates dropped after the Federal Reserve began buying up mortgage bonds in September to help in the economic revival. The low rates, although lucrative, are still out of reach for many aspiring homeowners. Badly scarred by foreclosures and defaulters, lenders are still laying down strict guidelines and making it difficult for many consumers to qualify for mortgages.
Most Affordable Metros: Detroit, Atlanta, Minneapolis
A new study released by Interest.com, a Bankrate company, showed that a median-income family could afford a median-priced home in only 14 of the 25 largest metropolitan areas.
While Detroit, Atlanta and Minneapolis were the most affordable cities, not surprisingly, New York, San Diego and San Francisco turned out to be the least affordable metros.
?Despite all of the talk about how homes are more affordable than they have been in decades, buying a home is still a big challenge for many American households,? said Mike Sante, managing editor of Interest.com in a release. ?Dealing with rising expenses and stagnant wages is a struggle. Even after years of declining home prices and record-low mortgage rates, median-income households are unable to afford a median-priced home in nearly half of the metropolitan areas we looked at.?
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