March was a banner month for Minnesota homebuilders. The Twin Cities metro area issued 520 permits to build 915 houses and apartments, boasting the market’s best March since 2006.
“Builder confidence is very high,” Dave Siegel, executive director of the builders association, told the Star Tribune. “They’re all feeling pretty good.”
This shift in new home demand is partially fueled by millennials, who are parting from parents and roommates in search of their own Twin Cities real estate.
“We’re finally starting to see millennials moving into the home buying market,” said Siegel. “The biggest challenge now is building entry-level homes.” The busiest Twin Cities markets were Cambridge (160 planned units), Plymouth (133) and Apple Valley (117).
Herb Tousley, director of real estate programs at the University of St. Thomas heralds a robust market for 2017. “Builders will have a better year. 2016 was a good year and 2017 will be even better.”
Entry-level housing supply is having a hard time keeping up with demand in some metro areas, and mortgage rates are fluctuating, resulting in greater urgency. While mortgage interest rates are expected to rise this year, they’ve been trending lower, with Freddie Mac’s Primary Mortgage Market Survey showing rate drops for two consecutive weeks.
Bob Michels, the Builders Association president, reported an increased interest in the Spring Parade of Homes. “More buyers are looking. With resale home inventory tight, we expect to see new construction continue to pick up the pace to meet the demand for housing.”
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