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Recovering home market stalls

Posted: May 11, 2012 1:55 a.m.
Updated: May 11, 2012 1:55 a.m.
 

Would-be homeowners and actual construction trends show the fracture in a recovering home market, according to a recent survey.

The number of renters who would like to buy a home has increased, according to a March survey by the PulteGroup, a Michigan-based home builder.

At the same time, permits for multifamily construction in California shot to the highest numbers since November 2002, according to the California Building Industry Association.

Among renters who plan to purchase a home in the future, 60 percent have increased their intent to do so compared to 12 months ago, according to the PulteGroup Home Index survey.

Despite wanting to own a home, as demand for multifamily housing grew during the recession, apartment construction spiked in many areas of the country, including Los Angeles County.

Housing starts

Housing starts in California, however, are leaning toward single-family housing again, according to CBIA.

Releasing L.A. County numbers for February and March, more single-family building permits were pulled than in 2011. And March permits jumped 41.5 percent over February.

Statewide housing starts were up 73 percent from February, and up 32 percent from March 2011, according to CBIA. Single-family permits, totaling 1,922, were up 26 percent in March over February and 5 percent more than March 2011.

On a quarterly basis, single-family construction during the first three months of 2012 was 3 percent higher than the same period a year ago.

The upward trend is encouraging, but policy makers at the state and local level need to continue working with homebuilders in order to spur economic growth and tax revenue, said Mike Winn, CBIA’s president and CEO.

“Homebuilding has to really get back on its feet before the state will see real economic growth, and with the number of foreclosures and other distressed sales still high, builders have to be able to compete on price,” Winn said.

High government fees and other costly restrictions often mean a project can’t get under way and will remain on the drawing board, Winn said.

“Building more homes equals jobs, economic growth and increased revenue for government programs,” Winn said.

Multifamily permits

Still, the number of single-family home building permits both statewide and in L.A. County lags significantly behind the multifamily permits pulled in March, reflecting ongoing weakness in the single-family market.

Multifamily permits in the state were up 37 percent in the first three months of the quarter, CBIA reported. In L.A. County, the numbers were even higher, reflecting a 43 percent increase in first quarter over the prior year.

Statewide, the 4,1270 multifamily permits recorded in March reflected a 50 percent increase from the same month a year ago, recording the largest monthly multifamily total since November 2002, according to CBIA.

Renters

Forty-nine percent of the respondents to the survey by the PulteGroup said they like being able to call themselves homeowners, while 44 percent view owning a home as a good investment. Thirty-six percent replied they needed more space for their family and kids.

Roadblocks to home ownership still exist.

Fifty-four percent of renters said they lacked the funds for a down payment according to the survey. Believing renting is cheaper than buying, 28 percent said they preferred to remain as renters for the time being. Uncertainty with employment was a reason given by 23 percent of the potential home buyers.

“Clearly, the dream of homeownership is alive and well in America, yet we still have a ways to go to ensure more renters are able to take that important step towards buying their first home,” said Deborah Meyer, senior vice president of PulteGroup.

“Homeownership is more attainable than ever with historically low mortgage rates and competitive pricing, as well as affordable new homes designed for first-time home buyers coming into the market,” she said.

jadkins@the-signal.com

661-287-5599

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