Will rates kill the building rebound? | South Salem Real Estate

McBride & Son had so many people waiting to buy houses in its new subdivision in south St. Louis County that it held a lottery last week to allocate the lots.

“We had 47 people give us checks,” McBride Chief Executive John Eilermann said. The lottery determined the order in which buyers could pick their home sites.

“I’ve been doing this 27 years, and that was the biggest demand I’ve ever seen,” said Eilermann of his new subdivision near Grant’s Farm.

Home building has been rising rapidly in St. Louis — although higher mortgage rates put the future in doubt.

From January through June, home construction permits were running 38 percent ahead of last year on the Missouri side of the area. Permits issued in June were up 66 percent from June 2012.

“The industry is healing. It’s getting better, and we’re putting more people back to work,” said Pat Sullivan, executive vice president of the Home Builders Association of St. Louis and Eastern Missouri.

The association counts the hours that carpenters work building houses in St. Louis. At the current rate, carpenters will work 2.1 million hours this year, up from 1.4 million last year.

But that’s still far below the 4.7 million of 2005, before the housing bust. And it’s below the 5.4 million record set in the late 1980s.

 

 

Will rates kill the building rebound? : Business.