What was gaining on us last week were May Housing Starts, up 3.5% for the month to a higher-than-expected 560,000 unit annual rate. The gain included a 29% increase in multi-family starts, which are now up 17.5% over a year ago.
New building permits were also up in May, by 8.7%, to a 612,000 annual rate. Permits indicate the level of starts a short time out, so some economists see the beginning of an upward trend. With the number of homes under construction at the lowest levels on record back to 1970, and as inventories continue to come down, home building will certainly need to grow considerably.
Experts are now saying we'll need to find homes for 150 million more people, the projected growth of the U.S. population in the next 30 to 40 years. This will spur a ramp up in home building and sales once the housing recovery gets going.
On our way to that recovery, the Mortgage Bankers Association (MBA) reported purchase loan demand up a seasonally adjusted 4.5% from the week before and up 6.1% over a year ago! But wise buyers should act now, as MBA economists expect 30-year fixed-rate mortgage rates to rise a bit by the end of the year and in 2012.
From my weekly enewsletter for real estate pros, INSIDE LENDING, for the week of June 20, 2011
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