New home construction across Indiana showed no signs of slowing in October.
The Indiana Builders Association, citing U.S. Census Bureau data, said 1,470 permits for new homes were issued across the state in October, up 15 percent from September when 1,277 building permits were recorded. The association added the number of permits issued in October was 4 percent higher from 1,416 permits pulled in October 2017.
The association said building permits for new homes in Indiana year-to-date through October totaled 14,071, up 6 percent from 13,271 through the same time period last year.
While construction activity remained strong, builders’ sentiment continued to decline over concerns about rising costs for new homes. The association has said rising lumber prices since the beginning of 2017 has increased the average price of a new single-family home by more than $6,000.
“As the numbers indicate, there is no better time to build a home in Indiana,” said Don Thieneman, board president of the Indiana Builders Association. “Builders and business owners in the industry are encouraged by the growing demand but will have to soon find ways to battle housing affordability obstacles that loom.”
Home affordability concerns resulted in builder confidence in the market for newly-built single-family homes falling from 68 in October to 60 in November on the NAHB/Wells Fargo Housing Market Index. Any number over 50 indicates more builders view sales conditions as good than poor.
“In the face of the growing interest rates on mortgage loans, demand for new construction has remained strong,” said Rick Wajda, CEO of the Indiana Builders Association. “Although we saw a softened market in summer months, construction volume is set to be the best since the downturn. However, policy makers should be aware that a decline in builder confidence in November could be a sign that supply-side affordability conditions will carry more weight on the market moving forward.”
