Local home construction plummets again

Home-building permits filed in the Indianapolis area fell by more than 40 percent in February compared with the same month last year, mirroring a national trend of weak demand for new single-family houses.

In the nine-county metropolitan region, the number of building permits filed last month fell to 201, a decline of 43 percent from February 2010, according to the latest permit data from the Builders Association of Greater Indianapolis.

Home-building activity was flat or down in every county last month except Hancock, where just 11 building permits were filed. Only four were filed there in the same month last year.

Just 39 building permits were filed in Marion County, a decrease of 55 percent.

Home construction was strongest in Hamilton County, though the number of building permits fell by 52 percent, to 72.

In the first two months of the year, building permit activity in the area is down 38 percent from the same time in 2010.

Nationally, builders broke ground last month on the fewest homes in nearly two years, a reflection of declines in home prices and diminished demand that has made it difficult for them to compete.

The Commerce Department said Wednesday that home construction plunged to a seasonally adjusted 479,000 homes last month, down 22.5 percent from the previous month. It was lowest level since April 2009, and the second-lowest on records dating back more than a half-century.

The building pace is far below the 1.2 million units a year that economists consider to be healthy.

Millions of foreclosures have forced home prices down and more are expected this year. Tight credit has made mortgage loans tough to come by. And some potential buyers who could qualify for loans are hesitant to enter the market, worried that prices will fall further.