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State & National Updates
Housing's Strong Finish in 2017

Builder confidence reached a nearly 19-year high at the end of 2017, according to the NAHB/Wells Fargo Housing Market Index

January 18, 2018

 

Housing's Strong Finish in 2017

Builder confidence reached a nearly 19-year high at the end of 2017, according to the NAHB/Wells Fargo Housing Market Index. While the first reading of 2018 wasn't quite as high, a positive level of 72 indicates a solid amount of continued optimism. Additionally, the Remodeling Market Index showed strength, coming in at a level of 60 and marking its 19th consecutive quarter in positive territory.

 

While housing starts dipped slightly in December, the 2017 totals for single-family construction were positive — nearly 9% above the 2016 totals. Multifamily starts, however, were down almost 10% as that market finds a balance between supply and demand. NAHB expects single-family starts to increase nearly 5% in 2018, while multifamily starts will decline slightly.

 

A recent NAHB survey of builders identified the top concerns for the industry. Building material prices and labor costs/availability were cited by 84% of builders as significant problems they expect to face in 2018. The next most commonly cited challenge was the cost/availability of lots, referenced by 62% of builders. Despite these obstacles, the industry continues to expand, adding 86,400 jobs over the last year as housing demand continues to rise. 

 

–NAHB Chief Economist Robert Dietz

Industry Insights

Single-Family Sector Boosts Housing Production

Starts declined in December, but 2017 overall saw significant gains. 

Builder Confidence Remains Strong as New Year Starts

Changes to the tax code expected to boost small business and the broader economy. 

Softwood Lumber, OSB and Gypsum Lead 2017 Price Increases

Prices for all major construction materials increased last year. 

Pending Sales Rose in November

Some experts project existing home sales and price growth will slow.  

Apartment and Condo Absorption Climbs

The 2017 rate is still lower compared to those seen from 2012 to 2015. 

Economic Indicators

Property Tax Revenue Increases Yet Again

It has been five and a half years since the last decline. 

Consumer Confidence Drops in December

But the portion of prospective home buyers increased from the previous month. 

Mortgage Rates Rose in 2017

However, rates remain at historically low levels.

Core Inflation Remains Steady

Energy prices largely contributed to the increase.

Southern and Western States Lead Population Growth

Eight states registered population declines in 2017. 

Employment Conditions

Materials Prices, Labor Access Top Challenges for 2018

Attempts to limit the mortgage interest deduction also a widespread concern.

Share of Immigrant Workers Continues to Grow

U.S.-born workers have been more reluctant to return to construction.  

Report Estimates 148,000 New Jobs in December

Unemployment remained at 4.1% for the third consecutive month.

Employment Increased in Most States

Texas, California and New York enjoyed the largest growth.