Building Permits at Highest Level in Over a Decade, Led by Multifamily Building
LOS ANGELES, CA / ACCESSWIRE / April 30, 2018 / In January, new home construction saw a 9.7 percent increase on a national scale to 1.3 million, an increase from December's 1.21 million, mostly due to the 19.7 percent increase in residential rental and multi-unit housing construction permits - the largest jump since December 2016, according to Scott Walter of WS Communities.
According to the Department of Commerce, the annual rate of building permits nationwide totaled 1.33 million last month, up from 1.21 million in December and up from a 1.24 million total in January 2017, January's increase followed a sharp 8.2 percent decline in December to an annual rate of 1.19 million permits, the biggest since November 2016. Single-family construction permits were up 3.7 percent across the nation.
Construction rates were up in every portion of the country with the exception of the Midwest, which experienced a drop of 10.2 percent. The strongest market was the Northeast, which rose to 45.5 percent. That's a four-fold increase over the West, holding the spot for the next highest increase. Up 9.3 percent was the South. In November, both the West and Southern regions recorded 10-year highs; their highest monthly rates since July 2007.
Building permits gained 7.4 percent in January, a good indication that home construction will continue to show growth in the near future.
Thanks to low supply, home prices remain stable. Prices saw an increase of 6.2 percent between November 2016 and November 2017, according to Standard and Poor's national home price index. Las Vegas, San Francisco, and Seattle experienced the most increases out of the 20 cities in the index.
Known for its lack of housing, Los Angeles, is set to experience more than 17,000 rental units this year.
None of these things necessarily mean home affordability will improve. Instead, the country will see a rise in vacancies as well as rents, says a new report from Marcus & Millichap, a commercial brokerage firm.
Due to the influx of luxury units, and a continued confidence in the market, experts expect rents to soar to $2,200 per month in 2018, a 6.3 percent increase in comparison to last year. according to the Los Angeles Business Journal.
As developers ramp up production on multifamily units, vacancies are expected also rise to 5.2 percent in Downtown L.A., with the adjacent Mid-Wilshire neighborhood receiving the largest increase of units, according to the report. The study also cites employment numbers which estimate 53,000 new workers in L.A. in 2018, up 1.2 percent from 2017.
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SOURCE: WS Communities
