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State & National Updates
Housing's Growth Tempered by Tight Labor, Costly Materials

After a mild 2016, economic growth gained momentum in 2017.

December 14, 2017

 

Housing's Growth Tempered by Tight Labor, Costly Materials

After a mild 2016, economic growth gained momentum in 2017. New jobs continue to be produced and unemployment (4.1%) is low. While this is positive news for housing demand, the unceasingly tight labor market conditions mean increased competition among employers for a smaller number of available workers. This is one of the reasons the construction industry continues to see an elevated number of open jobs: 227,000 in October, near a post-recession high. It also implies additional wage growth in the year ahead.  

 

Builders can also expect continued growth in the cost of building materials. Since the beginning of the year, OSB prices have jumped 30%, softwood lumber prices are up almost 15% and gypsum prices have increased almost 8%. Additional building material supply is needed as the home building sector grows. However, duties imposed on Canadian softwood lumber of almost 21% accomplish the opposite of what the industry and home buyers need. NAHB estimates that the tariff on lumber imports alone is responsible for a nearly 7% price increase and has already driven up the price of a new home by an average of $1,360.

 

–NAHB Chief Economist Robert Dietz

 

Lending & Spending

Record-Setting Pace of Price Increases Continues

OSB and softwood saw the biggest jumps. 

Single-Family Construction Spending Up in October

Modest gains followed a slight dip the previous month. 

Growth Rate for Residential Construction Loans Picks Up

Uptick in the quarterly growth rate is good news for home building. 

Mortgage Rates Remain Low

Rates on new home purchases have fallen five basis points since June.

Industry Insights

How Canadian Lumber Duties Will Impact U.S. Economy in 2018

NAHB estimates nearly $1 billion in worker wages and government revenue could be lost. 

Construction Job Openings Rise in October

Hurricane recovery efforts exacerbated an already-fragile job market. 

Home Owners' Equity Improves

Market value of owner-occupied real estate is up $1.57 billion from a year ago. 

Pending Sales Rebound from Hurricanes

Strong demand still moderated by a decreasing inventory of existing homes. 

Economic Indicators

Solid Employment Gains in November

Unemployment rate reached its lowest level since 2001.

Personal Income and Spending Increase in October

Disposable income has grown 1.6% in the last year. 

GDP Growth Stronger than Initially Estimated 

Personal consumption was the biggest contributor. 

Top 10 States for GDP Growth in 2nd Quarter

Majority of states experienced accelerated growth.