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State & National Updates Archives for 2017-11

The latest economic news from NAHB

November 30, 2017

 

Rising Starts and Sales Indicate More Gains Ahead

October was a good month for housing. Single-family and multifamily housing starts rose by almost 14%. Single-family starts (877,000) are at a post-recession high and have grown 8% on a year-to-date basis compared to last year. 


And rising home sales indicate more gains are in store for residential construction. Existing home sales expanded 2% in October, while inventory fell for the 29th consecutive month to only a 4.4 months' supply. Newly built single-family homes sales rose 6% last month, recording its strongest reading in a decade.

 

At this sales pace, there is only a 4.9 months' supply of new homes available. Moreover, a rising share of new home sales is coming from homes that have not yet begun construction, pointing to additional gains for construction in the near term.

 

–NAHB Chief Economist Robert Dietz

 

Prices and Sales

New Home Sales Reach Strongest Pace in a Decade

Shrinking inventory of existing homes gives more momentum to new home construction.

Existing Sales Up 2% in October

Share of first-time buyers increased to 32%.

Home Price Appreciation Continues 

All 20 of the U.S. metro areas had positive annual growth.

Housing Starts

Slight Gains for Custom Home Building

Volume is expanding, but overall market share is seeing declines. 

Construction of Multifamily Rentals on the Rise 

Starts ticked back up to an elevated level of 95% in the third quarter. 

Townhouse Construction Growth Continues

Starts in the third quarter were 18% higher than a year ago. 

Housing Starts Rise in October

Solid readings from the single-family sector. 

Industry Insights

AD&C Financing Conditions Ease at a Slower Pace

All major categories of lending continue to report easing standards. 

How Many Toilets, Showers are in Newer Homes? 

NAHB study examines bathroom fixture trends through several decades. 

Multifamily Developer Confidence Weakens 

Third-quarter index reading the lowest since 2011. 

Declining New Home Size Trend Continues

Median size of a new single-family home has decreased to 2,378 square feet. 

 


Tax and Monetary Policy Impacts on Housing


Tax reform is the big debate in Washington, and the stakes are high. Certain components of the proposals would sideline and limit the mortgage interest and real estate tax deductions — two major factors in determining the costs and incentives of homeownership. Other elements of the proposals would provide reductions in small business and corporate tax rates and, due to NAHB advocacy efforts, protect the business interest deduction for real estate development firms.

Side-by-side, the Senate plan is much better for housing. It offers more generally favorable treatment for S Corps and LLCs due its rate schedule and more usable 17.4% pass-through business income deduction, while also protecting important affordable housing policies like the LIHTC and the tax-exempt bond program.

Change is also coming for monetary policy. Federal Reserve Governor Jerome Powell has been nominated to replace Federal Reserve Chair Janet Yellen, whose term ends in February. Powell is an excellent choice for the housing sector and will likely maintain the Fed's current approach to monetary policy with gradual interest rate increases and balance sheet reductions.

Given current market challenges — highlighted by recent reports concerning ongoing labor shortages, declining housing affordability and lagging single-family construction — tax reform and monetary policy should promote economic growth while recognizing the important role the housing industry plays in the overall economy. 

 

NAHB Chief Economist Robert Dietz


November 13, 2017

Inside Washington

Senate Tax Reform Bill a Better Starting Point

NAHB continues to fight for a homeownership tax credit.

House Passes Joint Employer Bill

Measure would provide certainty to small businesses.

Controlling Silica Exposure

Tool manufacturers suggest products to help builders comply.

 

The Evolution of the Building Envelope

Through the last few decades, the building industry has seen immense innovations that have contributed to safer, faster building practices and more energy-efficient homes.

 

Industry Insight

Massachusetts Builders, NAHB Rein in a Federal Land Grab

Nearly 1 million acres would have been placed under Clean Water Act control.

2018 ICC Code Adoption Kits Now Available

NAHB resources focus on cost-effective code changes.

Los Angeles Ranked Least Affordable Housing Market

San Francisco had held the top spot for the past five years.