The housing market in the Jackson area and across the state is in the first phase of a rise in construction.
Residential permits in Mississippi for one- and two-unit dwellings rose 15.7 percent for the first four months of 2015 compared with the corresponding period last year, according to the U.S. Census Bureau on Wednesday.
Several factors — a shrinking inventory of previously owned homes, a healthy rise in prices and low interest rates — have led to that.
The number of homes on the three-county market of Hinds, Madison and Rankin, for example, dropped 10.6 percent from April 2014 to last month, according to the Central Mississippi Realtors Association.
In the year-to-date period ending April 30, new listings in the area dropped 1.4 percent and the median sales price rose 10.2 percent to $162,000, according to the association.
Across the nation, new-home sales climbed 6.8 percent last month, “a sign that rising demand that may spur builders to ramp up construction,” The Wall Street Journal reported Tuesday.
Don Potts, a 30-year veteran in the market who works for Nix-Tann and Associates, said, “One of the problems I’ve had is finding houses close in [to Jackson] in people’s price range.”
Buying a home farther out, in Madison and Rankin counties, adds to the commute, Potts said.
“With the inventory being down 10 percent, that makes the choices even more limited,” said Potts.”But with the interests rates being where they are [still at or near historic lows], it’s still a great time to buy.”
Still, the Central Mississippi Realtors Association foresees a break in the inventory logjam with the approach of summer, traditionally a time when many people put their houses on the market. In fact, new listings in Madison County rose 13.2 percent in April. Yet, Hinds and Rankin saw decreases of 6.1 percent and 6.7 percent, respectively.
Across the country, inventory of previously owned homes at the end of April increased 10 percent from March, to 2.11 million units, but that’s still 0.9 percent lower than a year earlier. The median price was $219,400, an increase of 8.9 percent from April 2014, according the National Association of Realtors.
The median price is midpoint at which half of the homes are less expensive and the other half are more expensive. It has the advantage of eliminating skewing of the average price by some pricey sales.
Nationwide, sales of previously owned homes — which comprise 90 percent of the market— fell 3.3 percent in April from March, according to the Association of Realtors.
“April’s setback is the result of lagging supply relative to demand and the upward pressure it’s putting on prices,” Lawrence Yun, association chief economist said in a release.
“However, the overall data and feedback we’re hearing from Realtors continues to point to elevated levels of buying interest compared to a year ago,” Yun said.
Sales in the South dropped 6.8 percent last month, but they were 3.6 percent higher than a year earlier.