More building permits sought
WASHINGTON — Rising rents and a healthier job market may be leading more people to consider buying a home.
Builders requested a seasonally adjusted annual rate of 747,000 permits to build homes in March, the Commerce Department said Tuesday. The pace hasn’t been that high since September 2008.
Of those requested, 462,000 permits were to build single-family homes. That’s 12 percent more than just six months ago. Still, the figure remains far below the 800,000 permits a year that signify a stable new-home market.
Builders are seeing more demand for apartments, too. Over the past six months, permits to build apartments have surged 68 percent, to 285,000 permits. A healthy number is closer to 400,000 a year.
Rents are rising, which has spurred construction for both kinds of homes.
In Philadelphia, rents have increased nearly 15 percent over the past year through February, while home values have dropped 5.4 percent, according to real estate website Zillow.
Minneapolis rents are up nearly 10 percent; home prices are down nearly 7 percent. Baltimore has seen rents rise 8.6 percent and home values drop 4 percent.
In Chicago, median rents in the past 12 months have risen 8.6 percent, or more than $100 a month. In the same period, the median home price has fallen 11 percent, to just $154,600.
So while apartment developers are chasing higher rents, renters are seeing more incentive to buy homes.
A survey of homebuilders has shown an increasing amount of foot traffic at open houses across the country since September.
Record-low mortgage rates have helped persuade buyers. The average rate on a 30-year fixed-rate loan is just above the 3.87 percent level reached in February — the lowest since long-term mortgages were first offered in the 1950s.
Banks are also seeing more qualified buyers apply for loans.
