Home-building permits up as buyer demand surges

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The U.S. Census Bureau reported a January increase in the number of home building permits issued nationwide. The bureau said there were 61,767 permits for single-family or standalone homes in January, up from 53,648 for the same month a year ago. 

The Harrisburg-Carlisle metropolitan area, the only midstate area required to report monthly permits, also experienced an uptick in January. There were 110 single-family permits reported in the Harrisburg-Carlisle area for the month, up from 55 a year ago.

One month does not make a year, but building permits are an indication of future housing starts. There is no guarantee those homes will be completed.

Central Pennsylvania Realtors say new construction is desperately needed as the busy spring home buying season inches closer. Real estate professionals have said the lack of available inventory has led to multiple offers on many homes, which has sent home prices higher.

For example, home prices have jumped 9 percent in York County over the last year. The year-to-date median-sale price in the county is $164,900, up from $151,480 a year ago, the Realtors Association of York and Adams Counties said last week.

The Census said 32 states and the District of Columbia saw growth in single-family permits issued in January compared to a year ago. However, the National Association of Realtors remains concerned that home construction will not be able to keep pace with current demands.

Home sales sank 3.2 percent in January, the association said, largely blaming the slow pace of home construction over the last decade for inventory shortages.

There were about 1.2 million homes built in the U.S. last year. Currently, the housing market is expected to see about 1.3 million homes completed this year, which isn’t enough to meet demands, the association said.

Many midstate builders said they would like to erect more homes each year, but they are running out of land to build on in popular housing developments. And the process of buying land and taking a new project through land development approvals is lengthy and costly, which makes it hard for builders to quickly ramp up new projects.

Even if they wanted to take on new housing projects and expand their operations, many builders also are having a tough time finding skilled workers, a problem expected to worsen before it gets better. The construction workforce is getting older and a wave of retirements is anticipated in the coming years.