Building Permit Increase Good For Buyers

Affordability is a top concern for today’s home buyers. Mortgage rates have risen recently and home prices continue to climb. But while it may seem like buyers haven’t gotten any good news lately, the most recent new residential construction report from the U.S. Census Bureau and the Department of Housing and Urban Development contains some encouraging signs. The report found that, in January, permits to build new, single-family homes rose 6.8 percent from the month before. And, because spiking home prices are primarily being driven by a historically low number of homes for sale, any news of an increase in new home construction is good news for buyers. After all, as more new homes are built, the balance of supply and demand will become more favorable, which will help slow price increases, competition, and bidding wars. In other words, increasing building permits are a positive sign that the inventory shortage may soon begin to improve, helping affordability and buyers’ chances at finding a good home that fits both their needs and budget.

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