Rising rents and a healthier job market are inspiring more people to consider buying.
Builders are responding to the demand by laying plans for more homes this year than at any other point in past 31/2 years. And banks are helping both by approving more loans. All that points to a better year for the housing market — though a full recovery could take several years.
Builders requested a seasonally adjusted annual rate of 747,000 permits to build homes in March, the Commerce Department said Tuesday. The pace hasn’t been that high since September 2008.
Of those requested, 462,000 were to build single-family homes. That’s 12 percent more than just six months ago. Still, the figure remains far less than the 800,000 permits a year that signify a stable new-home market.
Builders are seeing more demand for apartments, too. Over the past six months, permits to build apartments have surged 68 percent, to 285,000 permits. A healthy number is closer to 400,000 a year.
Rents are rising. So while apartment developers are chasing higher rents, renters are seeing more incentive to buy homes. A survey of home builders has shown an increasing amount of foot traffic at open houses across the country since September.
The unemployment rate has fallen from 9.1 percent in August to 8.2 percent last month. Employers have added an average of 212,000 jobs a month from January through March. More jobs and a better outlook among buyers also could make 2012 the first year since 2008 that construction adds to growth — rather than detracts.
Record-low mortgage rates have helped persuade buyers. The average rate on a 30-year fixed-rate loan is just above the 3.87 percent level reached in February — the lowest since long-term mortgages were first offered in the 1950s.
Banks also are seeing more qualified buyers apply for loans. Two of the nation’s biggest banks — JPMorgan Chase and Wells Fargo — approved more mortgage applications in the first-quarter, based on their recent earnings reports.
“The ones buying now are older, they’ve saved up for a while, they have good jobs, they are not risky,” said Karen Mayfield, senior vice president of Bank of the West, a national bank lender based in San Francisco.