The number of single-family home permits in Wayne, Macomb, Oakland, and St. Clair, counties increased 15 percent in October from the same period in 2012, the Home Builders Association of Southeastern Michigan reported. The association said 4,711 permits were issued in the last year.
Looking ahead, the association estimates 2,436 permits will be issued in the next six months, from November to April and would represent a 32 percent growth in permits compared to the same six-month period in 2012-13.
Several factors — including a slight dip in crude oil prices and an increase in North American vehicle production — contributed to the favorable forecast, says Michael Stoskopf, CEO of the association. An unexpected drop in the 30-year fix rate mortgage rate also helped drive permits this year, but Stoskopf doesn’t expect interest rates to stay low for long.
“Sometime before June 2014, the (Federal Reserve) is going to start tapering the quantitative easing, which means interest rates are going to climb,” Stoskopf says. “If you’re thinking about buying a new home and you can afford it, now is a good time. The rates are as low as they’re ever going to be.”
Stoskopf says the association experienced the impact of rising mortgage rates when the fixed rate rose in May. “We saw a slowdown in construction activity not just in Michigan, but nationwide. The higher the interest rate, the less people have to put toward a mortgage,” he says.