Mortgage Rate News

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The housing market may be on its way to improvement, after the latest numbers are in. Housing starts appear to have grown in May, recovering from record lows seen in April. The Street reports on the latest housing numbers:

Still, according to the U.S. Department of Commerce, building permits — what some use as an indicator of housing activity in the future — grew to 518,000 in May, representing a 4% monthly surge. Even more stunning was the 77% month-over-month surge in new starts for apartments and other buildings with five units or more. Those numbers came to a rate of 124,000, far outpacing the 70,000 rate in April.

Building permits for single-family housing also leaped 7.9%, while starts for those homes jumped 7.5% to 401,000.

Clearly, some areas of the housing market are set to see some demand. However, the increase in multifamily housing starts offers evidence of another trend: Foreclosure victims looking for a place to call home. Clearly, with the boom in apartment complexes, a need is being seen for fewer single family dwellings. Between foreclosures and the difficulty in getting approved for a home mortgage loan, it probably is not surprising that these other types of dwellings are gaining in popularity.

Even with this news, though, housing starts on the year are still trending lower. While this may mean that some recovery might be seen in the housing market, it does not mean that recovery is solidly here. There are still other concerns, and recently rising mortgage interest rates are slowing some of the demand for home mortgage loans. Fewer applications have been coming since mortgage rates started inching higher. Right now, the increase in housing starts might only mean that the slide in the housing market is coming to an end. Recovery is still in the future.