Housing starts in the Edmonton region for May surpassed May 2010 levels, Canada Mortgage and Housing Corp. said Wednesday.
There were 1,009 homes started in May, up from 989 a year earlier, marking the highest level of monthly activity since April 2010, according to CMHC.
Year to date, however. the housing starts totaled 3,332 which was down from 4,428, this time last year.
There were 546 single-detached homes started in May, up slightly from 540 a year earlier. It’s the first year-over-year gain since September.
For the year to date, builders started 1,783 single-detached units, down 30 per cent from 2,554 year-over-year.
Why should you care about these stats? According the an article in the Edmonton Journal CMHC senior market analyst, Michael Fabiyi commented that:
“The number of completed and unabsorbed homes remains higher than last year, but the total supply of single-detached homes has declined over recent months.”
“This, along with the higher pace of absorptions recorded thus far should encourage increased new home production moving forward,” he said.
This means that if you’re in the market for a newly built home, now is a great time to consider purchasing builder’s “spec homes” which are houses that have been built before buyers have been secured. If the completed spec homes are hanging around on the builders books for the past few months but new production is starting to pick up, there is a good chance builders may be anxious to get rid of their current inventory at competitive prices.
Sure, you may not be able to pick the carpet and paint colors but you could save big money by purchasing a spec home instead of beginning a new build from scratch, not to mention big headaches, which the building process can sometimes bring.
From a financing stand point, mortgages can often be easier to obtain on completed, newly built houses as there is no need for a builder’s draw mortgage. This type of financing allows for the mortgage funds to be released in stages as the builder completes each phase of construction. Not all builders require draw mortgages but when they are needed, they can be challenging to manage from a borrower’s stand point.
In addition, most lenders are not able to hold today’s best mortgage rate until a new build has been completed. A higher rate that factors in expected rate increases is usually held for borrowers building new homes, but purchasing a home that already completed allows you to take advantage of today’s current, historically low interest rates.
To find out more, contact one of our licensed mortgage broker today!