New Construction Down in Denver

The rate of new home construction in the Denver area has fallen for three consecutive quarters, the Denver Post reports.

The number of construction starts on new homes dropped 10.5 percent in the second quarter compared to the same period a year ago. That was mostly driven by a steep 17.6 percent drop in single-family home starts, according to counts maintained by Metrostudy, which tracks new home construction across the country.

“This isn’t necessarily indicative of demand slowing down. It is in part of an overhang that we felt in summer of 2018 when interest rates spiked,” said John Covert, who watches the Denver market for Metrostudy, in a conference call.

Covert notes that the average size of the homes that builders are bringing to market is down 18 percent. The trend of builders trying to provide more homes that first-time buyers can afford has only accelerated. Condos are finally seeing strong gains, although from very low levels.

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