Builder Confidence Highest in Nearly 12 Years
Optimism among single-family builders this month is the strongest it has been since 2005. Much of this positive sentiment stems from the widely anticipated reductions of government regulations. A prime example was the recent executive order to roll back the Waters of the United States rule that affects builders' and developers' wetlands permits. However, we can expect some moderation in builder confidence in the months ahead, as interest rates rise and headwinds persist for access to lots and labor.
As expected, last week the Federal Reserve increased the short-term federal funds rate for just the third time in the post-recession era. Much of the Fed's stance is fueled by a strengthening labor market, which added 235,000 jobs last month. As the rate of inflation approaches the 2% target rate, NAHB forecasts two additional rate hikes this year.
Additional price pressures can be seen on the supply side of the industry. Gypsum prices have increased more than 6% in the first two months of 2017, and softwood lumber prices rose almost 5% due to the ongoing lumber trade dispute between the U.S. and Canada. As housing starts continue to rise in the months and years ahead, additional sources of lumber will be required.
NAHB Chief Economist Robert Dietz
Job Growth Continues for Builders and Remodelers
Unfilled jobs decreased in numbers as hiring accelerated.
Employment Situation in February: Fits Like a Glove
Labor report aligns well with the Fed's intention to raise interest rates.
Are Young Construction Workers Worth Your Time?
Builder survey reveals the potential effects of hiring a less-experienced crew.
Home Equity Reaches a New Peak
Real estate holdings climbed more than $1.5 trillion in the past year.
Non-Mortgage Consumer Debt Slowly Grows
Shrinking credit card debt was outweighed by an increase of student and auto loans.
FOMC: Economic Outlook is Meeting Expectations
As anticipated, the Fed recently announced yet another rate increase.
Prices and Production
Solid Gains for Starts
February's pace for single-family homes was the fastest since 2007.
Consumer Price Index Rose Slightly in February
A decline in energy prices partially offset increases in other areas.
Gypsum Products Lead Price Increases Among Building Materials
Price jump for softwood lumber the biggest in four years.
Absorption Flat for Apartments, Jumps for Condos
The median asking rent significantly increased from 2015.
Builder Confidence Reaches a Cycle High
Optimism hasn't been this strong since 2005.
How 'Green' is the Average Builder?
Single-family builders typically use 10 different green products or practices.