AVAILABILITY OF NEW HOUSING UNITS OFF BY 21.7% IN APRIL
The number of new housing units that were issued permits in Connecticut last month tumbled by 21.7 percent compared to April 2021, according to data released Thursday by the Connecticut Department of Economic and Community Development.
There were 406 new housing units issued permits last month across 118 towns. During the first four months of this year, 1,558 units have received permits.
Newtown led the state with 64 housing permits issued in April, followed by New Haven with 22. East Lyme had the next largest number of housing permits issued with 18, followed by Milford with 16.New housing permits are considered a key economic indicator because moving into a new house or apartment is usually accompanied by purchases of so-called “big ticket” items like consumer electronics and appliances.
Bob Wiedenmann Jr., who is a principal of Sunwood Development in Wallingford, said a variety of factors are likely the reason for the year-over-year decline in housing permits.
“Developers are being cautious and want to see where the market is going,” Wiedenmann said. “I think buyers are probably a little hesitant about whether they want to purchase a new home right now, with the stock market and all the volatility that is going on.”
The average annual percent rate on 30-year fixed rate mortgage on Friday was just over 5.14 percent, according to the financial website Nerdwallet. Annual percentage rate is the yearly interest generated by a
sum charged to borrowers or paid to investors.
“Five percent is still a great rate for mortgage as anyone whose been around for awhile can tell you,” Wiedenmann said. “But it’s quite an adjustment for younger home buyers.”
Wiedenmann has over 30 years’ experience in the new home building business. He said he views what is happening right now “as a market adjustment, although I don’t feel it’s 2008 all over again.”
“It’s probably helpful to get rid of that crazy sellers’ market,” Wiedenmann said. “It simply was not sustainable
and as prices adjust back to more sensible levels, it will make people less hesitant to enter the market.”
Sunwood Development has 36unit town home rental development in Wallingford that will hit the market in late June. He is also developing a six-lot subdivision of small single family homes that should be finished by the end of the summer, he said.
The release of April housing permit numbers come after DECD Commissioner David Lehman told an audience of business people from the greater New Haven area
that Connecticut needs more housing stock of all types to remain economically viable in the future. Lehman said the state needs to boost its housing permit numbers to between 10,000 to 15,000 units annually.
Wiedenmann said Connecticut’s new housing market hasn’t achieved that level of permit activity since the late 1980s and early 1990s.
“If there are not any incentives, it’s hard for any for-profit builder to build affordable housing units,” he said.