Southern California continues as the hotbed of the nation's housing industry and apparently its market-wise home buyers intend to use the best and immediate aspect of tax reform.
During 1986, 69,289 residential building permits were issued in the Los Angeles-Long Beach market, tops in the country, with the Inland Empire and the San Diego market right at its heels.
The end of the five-year tax shelter investment honeymoon means that "shelter"--hereafter--will be built for people to work and live in, not to shelter income and be used for tax write-offs.
The tax bill's allowance of property tax and mortgage interest deductions for both primary and secondary homes is a boon to the industry and consumers, with mortgage interest rates at attractive lows and financing and refinancing readily available.
The inland Riverside-San Bernardino area accounted for the nation's second highest total, 56,373 permits. Atlanta squeezed into third place with 53,309, and San Diego recorded 43,935.
Overall, the top four areas accounted for one out of every eight housing units built throughout the nation last year.
Among the top 20 most active markets, according to the National Assn. of Home Builders, were the Anaheim-Garden Grove (12) and Oakland (15) markets, issuing building permits of 24,547 and 23,007, respectively.
These figures helped California lead the nation in total housing activity for the third consecutive year.
Counting housing starts, existing home sales and shipments of mobile homes resulted in a production total of 806,309 housing units, the Automation in Housing & Manufactured Home Dealer magazine reports in its April edition.
As always, the determining factor in home purchasing is whether the buyer can make the monthly mortgage payment.
The dangling bait of tax deductibility is well understood now, perhaps more than ever, and if the 1986 statistics are an omen, the hot pace of buying should continue through this year as thousands of others move into the market or move up to more expensive housing.
The lasting dream of typical American households--to own their own home--can best be realized now, warns Paul Havemann, vice president of the Riverdale, N.J.-based HSH Associates, mortgage market information purveyors.
With the national average for 30-year fixed rate loans at 9.09%--lowest in nearly 10 years--mortgage rates have probably bottomed out and may begin to rise by July, he says, increasing then by between one-quarter and one-half percent.
Among the states, California's average rate for the 30-year term is the lowest at 9.08% while its average adjustable rate is 7.58% for one year.
"I'd advise those looking for home financing not to wait for rates to go any lower. With fixed-rate loans available under 9% in most areas, it isn't worth trying to squeeze out that extra one-quarter percent."