Builders Coming Back

From One of the great mysteries of this recovery has been the absence of significant growth in new home permits, starts and sales. In fact, most news from the homebuilders has been flat or outright bearish for the last three years. It looks as though that is about to change.Reports this morning indicate that lending to builders is finally picking up. In fact, analysts indicate that they are revising their projections of starts and future sales significantly as banks are starting to lend again to builders and builders are feeling strong enough to start borrowing again. While increases for land acquisition won’t have a short term impact on the availability of new home sales, lending and borrowing to build on existing lot inventories will.

Unit sales growth has slowed down in the last few months while prices continue to skyrocket in most markets. Now, there is the prospect that new home sales could add 200,000 to 400,000 new units available for sale this year. That would be a measurable increase in inventory and the potential for significant growth in housing sales for 2014.