New Home Construction Continues to Rise Across the Country

Home construction remained on a hot streak last month in Colorado Springs and surrounding areas, according to a report Tuesday by the Pikes Peak Regional Building Department.

Here's a look at August's report, the reasons behind a recent surge in homebuilding and what some builders say will happen next:

The numbers: In August, the Pikes Peak Regional Building Department issued 265 building permits for the construction of single-family homes in El Paso County, a 44 percent increase over the same month in 2014. Building permits now have increased for seven straight months on a year-over-year basis. And through the first eight months of 2015, single-family permits totaled 1,902, up 12.5 percent over the same period last year.

What's going on: Historically low mortgage rates remain one of the housing market's biggest drivers. Last week, 30-year, fixed-rate loans averaged 3.84 percent nationally, dipping to their lowest level since late May.

Meanwhile, some builders have said an extremely tight resale inventory means there are fewer homes available for buyers to consider. As a result, they're instead looking to buy new homes.

Buyers also feel more confident because they've seen the housing market and economy improve.

As a result, they don't have as much trepidation about purchasing and believe property values will rise after they invest in a home, said John Bissett, owner of JM Weston Homes in Colorado Springs. His 6-year-old company is having its best year in terms of annual sales and closings - completed transactions. "We've seen a number of very good months and the public has seen it, as well," Bissett said. "The public is feeling more confident about making a home purchase."

Greeley-based Journey Homes, which caters to active and retired members of the military, is seeing strong demand in its Painted Sky at Waterview community south of the Colorado Springs Airport, and said Dan Worden, Journey's Springs general manager.

"There's been enough people moving in and out of Fort Carson that we've busy and our market is strong," Worden said.

Why homebuilding matters: The homebuilding industry employs thousands of people. So, when the economy is strong and homes are under construction, there's plenty of work for drywallers, electricians, roofers and members of various trades.

At the same time, sales taxes collected on the purchase of building materials pump millions into the coffers of the city and other local governments, which use the money to fund public safety, parks and other basic services. In July, for example, sales taxes collected on building material sales generated nearly $2 million in revenue for the city of Colorado Springs.

The outlook: Despite the recent stock market turmoil, Bissett expects the new home market to stay healthy; consumers and businesses remain confident and the nation's economic indicators continue to be positive, he said.

"I think we're going to continue to see steady, moderate growth (in homebuilding) over the next 12 to 18 months," Bissett said.