Eye on the Economy

Posted About Six Years Ago

Builders Confident at Year's End

Confidence among single-family home builders reached a post-recession high in December, following the election of a new president who promises regulatory relief and increased economic growth. Sales in November also showed positive trends, as new home sales jumped more than 5%—almost 13% higher than the same time last year. Existing home sales also edged up in November, with a four-months' supply of inventory.

New home construction was disappointing in November—down nearly 19% for the month—largely due to an unusual decline for multifamily starts. However, home building in 2016 performed well overall. Single-family starts are up almost 10% for the year, while multifamily starts are down about 4%.

Despite an ongoing scarcity of lots and labor, we anticipate continued growth of residential construction in 2017. Economic growth should also improve next year, compared to the relative weakness experienced in 2016. The full NAHB economic and housing forecast will be unveiled during the NAHB International Builders' Show.

–NAHB Chief Economist Robert Dietz

Building Conditions

Absorption Data Show Multifamily Market Leveling Off

Following a peak in the third quarter of 2015, signs indicate a slight slowdown.

Construction Employment Across States

States with the highest annual growth rates are Nevada, Iowa and Washington.

Builder Confidence Closes Year on a High Note

Presidential election spurs Housing Market Index to its highest reading since July 2005.

Prices Increase for Most Building Materials

November saw costs rise for OSB, gypsum products and ready-mix concrete.

Home Sales

New Home Sales Grow

November's sales pace was the second highest since the end of the recession.

Financing Sources for New Homes

Portion of conventional mortgages in the third quarter was the most since 2008.

Existing Sales' Year-End Sprint

Last month's increase lifted sales to the highest pace in nearly a decade.

Economic Insights

3rd Quarter GDP Growth

Revised estimates show real GDP grew at a 3.5% seasonally adjusted annual rate.

Moderate Rise for CPI in November

Consumer inflation slowed from 4.37% to 2.43%.

Housing Starts Fall in November

Totals were down 18.7%, following a strong October pace.

Top Posts of 2016

Economic Impact of Home Building

Constructing 1,000 single-family homes generates 2,975 jobs and $111 million in federal revenue.

Where are the Nation's Second Homes?

Counties in New York, Pennsylvania and Utah are among the hot spots for these houses.

Regulatory Costs Add Up in a Big Way

Nearly one quarter of the price for an average new home stems from government fees.

Lots in 2015 are Smallest on Record

Median lot size of a new single-family home dropped below 8,600 square feet.

How Much Time it Takes to Build a Single-Family Home

Survey shows average completion time is about seven months.

Monday Morning Briefing

Posted About Six Years Ago

Economics

Builder Confidence Ends Year on a High Note

Builders hopeful Trump will follow through on his pledge to cut regulations.

Fed Raises Interest Rates

NAHB Chief Economist Robert Dietz provides an analysis.

Housing Starts Down 18.7% on Multifamily Weakness

Single-family production is up 9.6% year to date.

Inside Washington

Illinois Builder Ed Brady Being Considered as FHA Commissioner

Outgoing 2016 NAHB chairman in discussions with Trump transition team.

Ways and Means Republicans Vote to Support LIHTC

Key housing tax credit to be included as part of efforts to revamp the tax code.

Industry Insight

Take Action Now to Stop Flawed HUD Floodplain Rule

NAHB has created a template letter for you to respond by the Dec. 27 deadline.

$1,000 Makes a Big Difference in Housing Affordability

Modest price hikes can push hundreds of thousands of households out of the market.

Trench Collapse Fatalities Doubled in 2016

OSHA levies thousands in fines when employers repeatedly fail to follow safety protocols.

By the Numbers

5 Negotiating Tips for Construction Loan Financing

These steps will make it easier to negotiate with your bank or lender.

Employers Face Earlier W-2 Deadlines, Higher Fines in 2017

As tax season nears, keep these two big payroll tax filing changes in mind.

8 Easy Ways to Keep Jobsites Safe

Following these guidelines can help workers steer clear of hazards.

Eye on the Economy

Posted About Six Years Ago

Fed Raises Interest Rates

For just the second time since the Great Recession, the Federal Reserve increased its target for the federal funds rate by 25 basis points. While still low, the rate increase continues the path toward higher interest rates and a normalized monetary policy after years of stimulative policy designed to support an economic recovery. The current outlook is for three additional rate hikes in 2017. Economic growth remains modest, though the pace could increase with a fiscal stimulus in the form of deficit-financed tax cuts or government spending increases as the Trump administration takes office.

The move by the Fed is consistent with recent labor market data, which reveal tight employment conditions. The unemployment rate declined to 4.6% in November, as 178,000 jobs were created during the month, of which 19,600 positions were in the home building and remodeling sector. Over 120,000 jobs have been created in residential construction within the last year. While solid employment figures are good news for housing demand, ongoing labor constraints are an inflation risk and a motivation for the Fed to continue raising rates in 2017.

–NAHB Chief Economist Robert Dietz

Employment

Residential Construction Employment Rises

Number of job openings continued its upward trend in November.

Employment Situation in November: Step 2

The stage is set for the next move toward monetary policy normalization.

Home Building Employment Still Far Below its Peak

New NAHB study shows which states were the hardest hit and slowest to recover from the downturn.

Consumers

NAHB Releases 2016 'Priced Out' Estimates

New data reveals the delicate balance of housing affordability with increasing rates and regulations.

Home Owner Equity Continues to Increase

Home prices reach a new high as the portion of underwater homes dwindles.

Consumers Express Optimism in November

The current and near-term outlook is positive thanks to ongoing employment and economic growth.

Steady Growth for Personal Income

October's 0.6% rise was the biggest in the last six months.

Lending

Federal Reserve Chair: Rate Increase a Vote of Confidence

Strong economic growth is expected in the years ahead.

Non-Mortgage Credit Expands

Federal Reserve Board reports consumer debt continues to climb.

Rates Hold Steady in October as Increases Expected

Existing homes saw an uptick of one basis point, while rates for new homes fell two basis points.

Serious Delinquency Rates Show Improvement

But concerns persist regarding student and auto loans.

Trends

Reliance on this project management technique has grown significantly among NAHB members.

Pending Sales Maintain Pace

Tight supply in October led to 40% of homes selling at or above list price.

Strong Growth Continues for Multifamily Construction

Record-breaking spending brings the current total up to $63.7 billion.

Monday Morning Briefing

Posted About Six Years Ago

Housing Finance

FHA Raises Loan Limits

The nationwide rise in home prices means buyers in 2,948 counties will see increases.

Outlook Gloomy for Tax Extenders, Including Energy Incentives

Popular temporary tax provisions are set to expire this month; it appears unlikely Congress will renew them.

House Votes to Reinstate Health Reimbursement Arrangements

Legislation would allow home builders to help their employees cover rising health care costs.

Construction Safety

Framing and Roofing Companies Slammed with Hefty Fines

OSHA's enforcement of fall protection violations seems to have picked up in recent months.

New OSHA Director to Discuss Agency's 2017 Agenda at IBS

Dean McKenzie will review the agency's current activities and discuss plans for the new year.

Find it and Fix it...Before OSHA Does

Here's what you need to do to stay compliant.

Eye on the Economy

Posted About Six Years Ago

Construction Surges in October

Single-family construction starts rallied in October, increasing nearly 11% to an annual rate of 869,000. Meanwhile, multifamily construction in October was also unusually strong. A gradually strengthening economy has led to a broadening of the types of residences being built, as depicted in the third-quarter data for the individual home building sectors:

Custom home building posted 49,000 starts—its best quarter since the recession.
Townhouse construction achieved a 12.4% share of the single-family market—near a cycle high.
Median single-family home size is trending down as more entry-level homes are constructed.
Rental housing continues to dominate, accounting for 92% of all new multifamily construction.

Overall growth helped support yet another strong level of builder confidence, according to this month's NAHB/Wells Fargo Housing Market Index. However, the surge from October is likely temporary. Single-family starts are expected to return to trend in the coming months, as will apartment construction while that market seeks a balance between supply and demand.

–NAHB Chief Economist Robert Dietz