RISMEDIA, Nov. 19, 2007-(MCT)-There has been a 4.7-percent decline in the number of building permits issued in Rhode Island in the third quarter for the construction of single-family houses, according to a report by the Rhode Island Builders Association.For the three months that ended Oct. 31, Rhode Island cities and towns issued 342 building permits for single-family house construction — down from 359 for the same period a year ago, the trade group said.
Roger Warren, the group’s executive director, attributed the drop to problems that have beset the mortgage-loan market, especially loans made to subprime borrowers (generally those with credit problems).
“The subprime problems that unfolded in the summer are now being reflected in the building-permit numbers,” he said in a statement.
“What we are seeing in Rhode Island is on par with what is happening in the New England region,” Warren added.
For the year to date, single-family building permits are down about 5.5 percent, to 1,094 from 1,158, the group’s report showed.
RIBA said median single-family house prices dropped 7.5 percent from the same quarter last year to $246,000, according to a recent report from real estate tracking firm the Warren Group. However, this is still above the national median price of existing houses, which is $219,000. The median price of condos in September rose 5.7 percent to $216,500.
Twelve Rhode Island cities and towns showed a significant change in single-family building permits for the third quarter. Towns showing substantial increases include: Barrington, Johnston, Narragansett, New Shoreham, North Kingstown and North Smithfield. Towns showing sizeable decreases include: North Providence, Charlestown, East Providence, Lincoln, West Greenwich and Woonsocket.
“Taking into account the overall national picture, Rhode Island is holding its own,” said Thomas E. McNulty, president of the RIBA. “On the positive side, 30-year fixed mortgage rates are expected to average 6.4 percent for the remainder of 2007, still historically low; inflation is running at 2.8 percent, down from 3.2 percent in 2006; and the unemployment rate remains unchanged from 2006 at 4.6 percent. We feel confident in saying that the sky is not falling on the real estate market in Rhode Island.”
The Rhode Island Builders Association, founded in 1945, is a nonprofit trade organization for the residential construction industry. The association has nearly 1,500 member companies.
Copyright © 2007, The Providence Journal, R.I.
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