Share of housing starts built within an association rising: NAHB

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The percentage of homes started last year and built within an association rose 2 percentage points to 63%, according to a trade group's most recent analysis of Census Bureau data.

The number of homes started in 2018 and built within mandatory community or homeowners associations was 543,000, up from 508,000 in 2017, Ashok Chavaludi, senior research associate at the National Association of Home Builders, said in the group's Eye on Housing report Thursday.

The share of homes built in associations varied dramatically by region. The association share was particularly low in the Middle Atlantic, where it was 29%, and it was particularly high in the Mountain states, where it was 82%.

The regional share of homes built in associations in other areas was as follows: East South Central, 35%; New England, 37%; West North Central, 46%; East North Central, 51%; Pacific, 56%; South Atlantic, 70%; and West South Central, 70%.

With the exception of 2014, the share of new homes built in associations generally has risen nationally each year since at least 2009, when it was an estimated 48%. The share in 2014 fell one percentage point to 58% after rising 5 percentage points the year before.

Mandatory association membership complicates mortgage financing because the fees the groups charge residents and financial health of the association need to be considered in underwriting.

In nearly half of all states, associations also have liens that can supersede lenders' claim to the property when borrowers have trouble paying association dues as well as their mortgages, according to CoreLogic.

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Homebuilders NAHB Census Bureau Underwriting CoreLogic