Louisville homebuilding predicted to be up 18 percent this year
LOUISVILLE, Ky. (WDRB) --The cold and snowy winter weather has made it tough on area homebuilders.
"We had our first significant snow and ice right at the beginning of December, and really from that point on until now, winter has played havoc in the construction industry," said Chuck Kavanaugh, the executive vice president of Building Industry Association of Greater Louisville.
Kavanaugh says during the past two years, the homebuilding industry has really bounced back in Louisville -- but bad weather at the end of 2013 kept the number of new homes built last year lower than projected at 1,800.
"What we felt we were going to get was more than 2,000," said Kavanaugh. "It was a little disappointing, but still up, and this year...if we hit the homebuilders economist's projections, that 1,800 number will be well over 2,000."
That is about an 18 percent increase over last year.
Kavanaugh says there is a low inventory of new homes, that there are very few speculation homes being constructed as builders want to play it safe after the hard lessons of the Great Recession.
A sign of good things to come can be seen at the Century Mortgage Company.
"We've seen a real uptick in mortgage applications during the past 2-3 weeks," said Century president Bryan Wiegandt.
He says interest rates remain low by historic standards.
"They have been anywhere from 4.25 percent, to 4.625 in the last two or three months," he said, adding that, "we project they are going to be pretty stable all year. Toward the third quarter, we may see a bit of a spike."
With demand growing and a tight inventory of both new and older homes, now is the time to buy.
"It is going to make the house prices continue to rise," said Wiegandt. "We have several buyers for the first time who are bidding on houses and really having to work to get them."
Some analysts predict that interest rates will rise to five percent before the end of 2014.
Copyright 2014 WDRB News. All Rights Reserved.