According to the Commerce Department, housing permits jumped to a 5-year high in October. With the strongest numbers since the housing crash, many are left wondering what the surge in building permits means. Don Frommeyer, CRMS, President of NAMB (The Association of Mortgage Professionals) explains that the numbers signal a strengthening housing market for the upcoming year.
“2014 will start off strong with more than 1 million housing permits issued in October. Single-family permits rose and reversed some of the damage we saw this summer when numbers dropped. It’s a great sign for families looking to build new homes, construction companies and loan officers alike,” says Frommeyer.
In addition, the data shows permits for multifamily units rose more than 15 percent. “Although the single-family segment is typically a stronger indicator of how the housing market will be impacted, the surge in multifamily unit permits is a great signal for builder confidence and optimism,” continues Frommeyer.
Mortgage rates are nearly 1 percent higher than they were in May of 2013, but the likelihood of them jumping higher is low. “The arrival of Janet Yellen as the new Federal Reserve’s chairman should keep mortgage rates low, which will be another bonus for the forecast of the housing market.”
For more information, visit www.namb.org.