New Gulf Shores home permits surged in February, with new housing starts falling nationwide in February by 1.1%. This according to the latest report from the Commerce Department released recently.
Despite this setback, there are signs that a recovery is still in the cards, with the number of new home permits issued increasing by 5.1%, which is the best we’ve seen in over three years.
Permits for new single-family homes did very well, increasing by some 4.9%, the highest level since April of 2010. Meanwhile, new permits granted for multi-family homes rose by 5.6%, according to Reuters.
New Gulf Shores Home Starts Drop
The slight drop in housing starts this February is blamed on a reduction in single-family home construction, say Reuters. Single-family homes are the biggest sector of the US construction industry, and they dropped by a disappointing 9.9% last month. However, multi-family homes continue to be a bright spot for the industry, with new construction soaring by 21.1% as demand for rental apartments continues to grow.
Builder confidence is showing up based on the increased number of new Gulf Shores home permits over the last few months. According to Reuters, the National Association of Home Builders/Wells Fargo index reached a 5-year high at the beginning of March.
Even with all the optimism surrounding new Gulf Shores home permits, there remains a number of hurdles to get over before builders will say they are on a definite road to recovery.
Barry Rutenberg, chairman of the NAHB, said that most people in the construction industry were optimistic for the future:
“While builders are still very cautious at this time, there is a sense that many local housing markets have started to move in the right direction and that prospects for future sales are improving.”
The biggest hurdle still facing new Gulf Shores home builders remains the tight restrictions on credit, and the expected rise in new foreclosures they will be competing with this year.