Metrostudy reported on Wednesday that housing starts increased 6% during the 4th Quarter of 2009 compared to the 4th Quarter of 2008.
Builders started 4,576 new homes during the 4th Quarter and closed on 6,323 new homes.
The Houston area saw 12,164 new homes either finished or under construction during December, 2009.
According to Steve Silver, President of Silver Mortgage Funding, LLC and founder of The Real Estate Club of Texas, \”Houston\’s in much better shape than most other regions of the US as shown by this recent improvement in our local housing data.\”
\”The numbers show that builders closed approximately 4,000 more homes than they built during that period and that inventory\’s starting to tighten\” said Steve Silver.
Metrostudy reported there are 65,925 vacant lots ready for development at the end of 2009. At current absorption rates, that equals a 42 month supply…a 20-24 month supply is considered normal. But this also means that lots are available and builders won\’t be exposed to the financial risk of land development when they need to acquire new lots to build on.
New home inventories are declining due to tax credits for new home buyers and low interest rates. Lower construction costs due to the national recession are benefiting local builders as they lower their costs and pricing.
\”Looking ahead, available construction financing will be the biggest challenge facing builders\” says Silver. Some lenders are requiring that builders build on lots already owned or foreclosed on by the Lenders in return for providing construction financing to the builders. Sometimes they require higher than market prices for the lots…but builders are agreeing to these terms because it\’s often the only way to obtain construction financing right now.
Houston-area builders are expected to build and sell 18,000 to 20,000 new homes during 2010 as supply and demand maintain a healthy balance throughout the year.
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