Homebuilding improves in August, but foreclosures jump to highest level since April

The pace of local home construction increased slightly last month, even without homebuyer tax credits fueling sales. But in a troubling sign, foreclosure filings rose to their highest level since the spring.

Single-family home building permits totaled 118 in August, up 6.3 percent from the same month last year, according to a report Wednesday by the Pikes Peak Regional Building Department. Permits are taken out by builders and individuals who intend to construct a house; they’re a key yardstick by which to measure homebuilding, which is one of Colorado Springs’ leading industries — employing thousands and pumping tax money into local government coffers.

August’s increase in permits reversed a two-month streak of year-over-year declines, which local housing experts said was triggered by the end of the federal government’s homebuyer tax credit program. While that program has ended except for some in the military, 30-year, fixed-rate mortgages averaged 4.36 percent nationally last week — the lowest in nearly 40 years

For the first eight months of this year, single-family home permits totaled 1,026, a 37.5 percent increase over the same period in 2009, according to Regional Building records.

Foreclosure activity was a different story. New foreclosure filings — the start of a legal process that can lead to the loss of a home — reached 427 in August, according to the El Paso County Public Trustee’s Office. That total was down 3.8 percent from the same month last year, but was the highest total since 444 filings were recorded in April of this year.

Through August, foreclosure filings in El Paso County totaled 3,200, which puts the Colorado Springs area on track for a total of 4,800 filings for the year, Public Trustee Tom Mowle said in his monthly report. That would be a 14 percent decline from the record of 5,470 in 2009, yet still would be the county’s second highest total.

A positive trend when it comes to foreclosure activity: Higher numbers of foreclosure filings are being withdrawn by banks or resolved by homeowners before the properties wind up at a Public Trustee’s sale, Mowle said. Through August, cures — filings resolved by property owners — averaged 19 a month, compared with 13 a month last year. Withdrawals have averaged 220 a month this year, compared with 143 last year.

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