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

Labor

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.

Finance

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.

Trends

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.

Economics

Construction Costs on the Rise

Softwood lumber, gypsum, OSB and concrete prices up in February.

Builder Confidence at a 12-Year High

Trump's move to roll back regulations buoys builders. 

Single-Family Starts Highest Since Late 2007

Production expected to grow throughout the year. 

Inside Washington

Trump Proposes $6 Billion Cut to HUD

President's spending plan is first step in negotiations with Congress. 

Green Building

Builders Rank the Most, Least Popular Green Practices

More buyers are zeroing in on energy efficiency. 

Home Appraisals to Include HERS Scores

The change should help in the valuation of above-code energy improvements.