State & National Updates Archives for 2017-06
More than 800 members speak out as one voice on housing.
NAHB testifies on need to increase lumber production from federal lands.
NAHB opposes "new construction" provision.
Agenda focuses on regulatory reform and housing affordability.
Confidence levels have remained consistently sound in 2017.
On a year-to-date basis, single-family starts are still up 7.2%.
Free webinar replay provides the answers.
Tech Note offers best practices for optimal installation.
Federal Reserve Policy Moves
A tightening labor market and a desire to normalize monetary policy led the Federal Reserve's monetary policy committee to tighten financial conditions.
First, the Federal Open Market Committee announced the second rate hike of 2017, increasing the target rate to a range of 1%-1.25%. NAHB expects one additional increase in 2017.
Second, the committee announced plans to reduce its balance sheet, which grew after the Great Recession as part of an accommodative policy known as quantitative easing. The balance sheet, which includes $1.8 trillion in agency debt and mortgage-backed securities, would be reduced in a "gradual and predictable" manner, creating only a slight increase in mortgage rates. The reductions in mortgage-backed securities would start at $4 billion and rise to $20 billion per month over a 12-month period and not result in a complete run-off of holdings. This process would likely begin at the end of 2017.
The Fed's actions are motivated by admittedly conflicting data. Measures of inflation remain below the Fed's 2% objective, but tight labor market conditions risk accelerating prices. For example, the unemployment rate was 4.3% in May and job openings persist at elevated levels, especially within the construction industry. The Fed's moves represent a belief that economic conditions continue to be solid and growth will continue.
NAHB Chief Economist Robert Dietz
Lending and Spending
The announced policy is intended to be "gradual and predictable."
May's increase pushed the softwood lumber price index to its highest level in nearly 13 years.
Declines largely stem from both the multifamily and home improvement sectors.
More home owners are refinancing to cash out.
Though they remain above the low of 3.54% set in October 2016.
Total household debt has returned to its 2008 peak level.
April declines were reported in all regions of the U.S. except one.
May's report is unlikely to alter the Fed's overall positive economic impressions.
Optimism waned for the near-term outlook.
Median ages are highest throughout the Northeast, lowest in the Midwest.
Census illustrates the categories of those who are indirectly involved in home building.
Recent increases in quits reflect growing competition for workers.
Since November 2016, prices have been decelerating.