More Home Construction, Fewer Permits Pulled

New home construction starts rose higher than expected last month, while permits pulled for new home construction did not. What does this actually mean? Contractors and developers had permits from last year and they finally had the confidence to start construction. They did not need to pull new permits because they have existing ones that were sitting unused. This also means that while developers had the confidence to start projects that they had previously lined up, they did not see a big enough market to pull more permits. Since the first time and move-up buyer tax credits effectively expire at the end of April, contractors and developers are not seeing a big enough market to buy expensive permits at this time. If the economy continues to chug along, they might pull permits and start jobs only for signed buyers, and not build model homes and on speculation for a few years. This will be a positive, if conservative, move for the new home market.
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