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What Building 1,000 Homes Means to the U.S. Economy

What Building 1,000 Homes Means to the U.S. Economy

While this article from the National Association of Home Builders is referring to single family homes in its example, building townhouses or townhomes should be no different in impact. Home building of any kind is going to be a major contributor when it comes to restarting the economy, and it will help us all experience normal again. Continue reading the full article below.

What Building 1,000 Homes Means to the U.S. Economy

(NAHB), A new study from the National Association of Home Builders (NAHB) shows that housing stands poised to lead the economic rebound once social distancing and other virus mitigation efforts show success in containing the coronavirus pandemic.

Building 1,000 average single-family homes creates 2,900 full-time jobs and generates $110.96 million in taxes and fees for all levels of government to support police, firefighters and schools, according to NAHB’s National Impact of Home Building and Remodeling report. Similarly, building 1,000 average rental apartments generates 1,250 jobs and $55.91 million in taxes and revenue for local, state and federal government. Moreover, $10 million in remodeling expenditures creates 75 jobs and nearly $3 million in taxes.

“Before the coronavirus pummeled the U.S. economy, housing was on the rise with January and February new home sales numbers posting their highest reading since the Great Recession,” said NAHB Chairman Dean Mon, a home builder and developer from Shrewsbury, N.J. “The demand is clearly there, and as this study shows, we expect that housing will play its traditional role of helping to lead the economy out of recession later in 2020 when the pandemic subsides.”

The NAHB model shows that job creation through housing is broad-based. Building new homes and apartments generates jobs in industries that produce lumber, concrete, lighting fixtures, heating equipment and other products that go into a home remodeling project. Other jobs are generated in the process of transporting, storing and selling these products.

Additional jobs are generated for professionals such as architects, engineers, real estate agents, lawyers and accountants who provide services to home builders, home buyers and remodelers.

In another sign of the important role that housing plays in the economy, the Department of Homeland Security announced on March 28 that it had designated construction of single-family and multifamily housing as an “Essential Infrastructure Business,” meaning that construction could continue in places under stay-at-home orders. Although this designation is not binding to state and local governments, it does mean that there could be more workers on job sites in the coming weeks.

“Ensuring the health and safety of home builders and contractors is our top priority,” said Mon. “This is why NAHB and construction industry partners have developed a Coronavirus Preparedness and Response Plan specifically tailored to construction job sites. The plan is customizable and covers areas that include manager and worker responsibilities, job site protective measures, cleaning and disinfecting, responding to exposure incidents, and OSHA record-keeping requirements.”

The full National Impact of Home Building and Remodeling study can be found on nahb.org.

Builder Confidence Hits 20-Month High

Builder Confidence Hits 20-Month High

In this recent article from the National Association of Home Builders, builder confidence has hit a 20-month high for newly-built, single-family homes. Fueled in part by low mortgage rates, job growth and a reduction in new home inventory, builders remain confident that the industry will continue on its current trajectory barring any unforeseens. Builders continue to hold concerns about the ongoing supply side constraints and worry about a slowing economy. Read the complete article below.

Builder Confidence Hits 20-Month High

(NAHB), 

Builder confidence in the market for newly-built single-family homes rose three points to 71 in October, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. Sentiment levels are at their highest point since February 2018.

“The housing rebound that began in the spring continues, supported by low mortgage rates, solid job growth and a reduction in new home inventory,” said NAHB Chairman Greg Ugalde, a home builder and developer from Torrington, Conn.

“The second half of 2019 has seen steady gains in single-family construction, and this is mirrored by the gradual uptick in builder sentiment over the past few months,” said NAHB Chief Economist Robert Dietz. “However, builders continue to remain cautious due to ongoing supply side constraints and concerns about a slowing economy.”

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All the HMI indices posted gains in October. The HMI index gauging current sales conditions increased three points to 78, the component measuring sales expectations in the next six months jumped six points to 76 and the measure charting traffic of prospective buyers rose four points to 54.

Looking at the three-month moving averages for regional HMI scores, the Northeast posted a one-point gain to 60, the Midwest was up a single point to 58, the South registered a three-point increase to 73 and the West was also up three points to 78.

Editor's Note: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be found atnahb.org/hmi. More information on housing statistics is also available at housingeconomics.com.

 

Builder Confidence Trending Higher as Interest Rates Move Lower

With the recent interest rate cut, it's no wonder that builder confidence would trend slightly higher, according to this recent article from the National Association of Home Builders. Demand remains high for single family homes, however construction costs continue to rise, and labor shortages are still problematic. Continue reading below for the full article.

(NAHB)

Builder confidence in the market for newly-built single-family homes rose one point to 66 in August, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. Sentiment levels have held at a solid 64-to-66 level for the past four months.

“Even as builders report a firm demand for single-family homes, they continue to struggle with rising construction costs stemming from excessive regulations, a chronic shortage of workers and a lack of buildable lots,” said NAHB Chairman Greg Ugalde, a home builder and developer from Torrington, Conn. 

“While 30-year mortgage rates have dropped from 4.1 percent down to 3.6 percent during the past four months, we have not seen an equivalent higher pace of building activity because the rate declines occurred due to economic uncertainty stemming largely from growing trade concerns,” said NAHB Chief Economist Robert Dietz. “Although affordability headwinds remain a challenge, demand is good and growing at lower price points and for smaller homes.”

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

The HMI index gauging current sales conditions increased two points to 73 and the component measuring traffic of prospective buyers rose two points to 50. The measure charting sales expectations in the next six months fell one point to 70.

Looking at the three-month moving averages for regional HMI scores, the South moved one point higher to 69, the West was also up one point to 73 and the Midwest inched up a single point to 57. The Northeast fell three points to 57.

Editor's Note: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be found at nahb.org/hmi. More information on housing statistics is also available at housingeconomics.com.

Housing Starts Reach Post-Recession High in May as Permits Soften

Housing Starts Reach Post-Recession High in May as Permits Soften

In this recent article from the National Association of Home Builders, housing starts reached a post-recession high in May. Housing starts rose 5% to an adjusted annual rate of 1.35 million units - the highest since July 2007. Permits have dropped however, pointing to a decrease in future housing activity. Continue reading the full article below.

Housing Starts Reach Post-Recession High in May as Permits Soften

(NAHB), Total housing starts rose 5 percent in May to a seasonally adjusted annual rate of 1.35 million units, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department. This is the highest housing starts report since July 2007.

While housing production numbers rose, overall permits — which are a sign of future housing production activity — dropped 4.6 percent to 1.3 million units in May. Single-family permits fell 2.2 percent to 844,000 while multifamily permits fell 8.7 percent to 457,000.

“Ongoing job creation, positive demographics and tight existing home inventory should spur more single-family production in the months ahead,” said NAHB Chief Economist Robert Dietz. “However, the softening of single-family permits is consistent with our reports showing that builders are concerned over mounting construction costs, including the highly elevated prices of softwood lumber.”

The May reading of 1.35 million is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts rose 3.9 percent to 936,000 — the second highest reading since the Great Recession. Meanwhile, the multifamily sector — which includes apartment buildings and condos — rose 7.5 percent to 414,000 units.

Year-to-date, single-family and multifamily production are respectively 9.8 percent and 13.6 percent higher than their levels over the same period last year. The year-to-date metric can help compare performance data over a specific time period and show growth trends.

“We should see builders continue to increase production to meet growing consumer demand even as they grapple with stubborn supply-side constraints, particularly rising lumber costs,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La.

Regionally, the Midwest led the nation with a 62.2 percent increase in combined single- and multifamily housing starts. Starts fell 0.9 percent in the South, 4.1 percent in the West and 15 percent in the Northeast.

Looking at regional permit data, permits rose 42.1 percent in the Northeast and 7.2 percent in the Midwest. They fell 4.6 percent in the West and 13.9 percent in the South.

Housing Recovery Continues at Modest Pace

The National Association of Home Builders (NAHB) has had a long history of tracking the evolution of home buyer preferences. Builders and other industry professionals now have an opportunity to find out what baby boomers want compared to other home … Continue reading

Single-Family Starts Reach Seven-Year High in November

From the National Association of Home Builders: Nationwide housing starts rose 10.5 percent to a seasonally adjusted annual rate of 1.173 million units in November, according to newly released data from the U.S. Department of Housing and Urban Development and … Continue reading