Metro homebuilding starts year in slump

ABQ area lags far behind national recovery in housing construction

Homebuilding in the Albuquerque metro area took a step backwards to start the year, dropping to the lowest level for a first quarter since construction hit bottom in 2011, according to the latest report from DataTraq.

The drop reflects a general slowdown across much of the country. Tight mortgagel-ending standards remain an issue, preventing many creditworthy potential buyers from qualifying for home loans, according to the National Association of Home Builders.

“A lot of it has to do with thawing out money so that millennials can get mortgages,” said John Garcia, executive vice president of the HBA, the metro’s homebuilders group, noting that first-time homebuyers are currently under-represented in the housing market.

Building permits were issued metrowide for 313 single-family homes in the first quarter, a 12 percent drop from 357 homes in the first quarter of 2014, DataTraq reported. The 313 permit figure is the lowest since 246 were issued in the first quarter of 2011.

“While our year-over-year permit counts are down for the quarter, many builders are reporting an increase in traffic and contracts which should reflect in our permit count for the second quarter,” said HBA President Brian McCarthy of Abrazo Homes.

Only a handful of metros have seen single-family home construction return to what, in hindsight, was the “normal” pace of 2000-03, the national association says. The 200003 period is described as a “healthy benchmark” since it predates the housing bubble and subsequent bust.

According to HBA and DataTraq statistics, the Albuquerque metro averaged 1,357 permits for single-family homes in the first quarter of 2000-03. The 313 permits issued locally in the recent first quarter represent 23 percent of the 2000-03 benchmark.

The metro is lagging far behind the national recovery in home construction.

On average nationwide, homebuilding is projected to regain 61 percent of the normal or benchmark pace of 2000-03 by the end of this year. The Albuquerque metro will likely finish the year at about 25 percent of its benchmark.