July proved to be a strong month for homebuilding, with the number of new permits reaching a three-year high.
A total of 223 single-family home permits were issued across Macomb, Oakland, St. Clair and Wayne counties in July. The total is the second-highest dating back to September 2007, according to an analysis by theBuilding Industry Association of Southeast Michigan.
Land purchased by homebuilders at a discount during the recession has led to lower prices on new homes, said association CEO Michael Stoskopf.
“That’s helped them get to a price point that’s more competitive,” he said. “We’re also seeing a modest price increase in the existing inventory.”
July’s total was an increase over June’s 221 permits and was more than 14 percent higher than July 2010, when 195 permits were issued.
July marked the second straight monthly increase in permits. It capped a strong May-to-July performance, with 645 permits, that was 18 percent higher than the same period in 2010, when 546 were issued, according to Stoskopf’s report.
Looking six months ahead, his forecast for permits in January 2012 is 128, which equals the forecast for December 2011 and is 21 percent higher than the 106 permits issued in January 2011.
Stoskopf’s six-month forecast is based on an algorithm he created that combines the price of single-family homes, the level of North American vehicle production, employment levels and the price of crude oil.
By Daniel Duggan, Crain’s Detroit