Eye On Housing
Author Archives
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One More Fed Rate Hike in 2023?
The Federal Reserve’s monetary policy committee held the federal funds rate at a top target rate of 5.5% at the conclusion of its September meeting. The Fed will also continue to reduce its balance sheet holdings of Treasuries and mortgage-backed securities as part of quantitative tightening. These actions are intended to slow the economy and bring inflation back to 2%…. Read More ›
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High Mortgage Rates Continue to Weaken Builder Confidence
Persistently high mortgage rates above 7% continue to erode builder confidence, as sentiment levels have dropped below the key break-even measure of 50 for the first time in five months. Builder confidence in the market for newly built single-family homes in September fell five points to 45, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index… Read More ›
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Decline for AD&C Loan Volume in the Second Quarter
The volume of total outstanding acquisition, development and construction (AD&C) loans posted a decline during the second quarter of 2023 as interest rates continue to rise and financial conditions tighten. The volume of 1-4 unit residential construction loans made by FDIC-insured institutions declined by 2.8% during the second quarter. The volume of loans declined by $2.9 billion for the quarter…. Read More ›
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Job Openings Data Reveal Labor Market Cooling
The count of open, unfilled jobs for the overall economy continued to moved lower in July, falling to 8.8 million. While certain inflation readings have raised the likelihood of a September Federal Reserve interest rate increase, the JOLTS survey is another data point indicating an ongoing but gradual cooling of macro conditions due to elevated interest rates. The count of… Read More ›
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New Home Sales Increase in July
Low existing inventory and solid demand more than offset rising mortgage rates and elevated construction costs to boost new home sales last month. Sales of newly built, single-family homes in July increased 4.4% to a 714,000 seasonally adjusted annual rate from a downwardly revised reading in June, according to newly released data by the U.S. Department of Housing and Urban… Read More ›
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Missing Middle Construction Weakens
The missing middle construction sector includes development of medium-density housing, such as townhouses, duplexes and other small multifamily properties. The multifamily segment of the missing middle (apartments in 2- to 4-unit properties) has disappointed since the Great Recession. For the second quarter of 2023, there were just 3,000 2- to 4-unit housing unit construction starts. This is down from a year prior…. Read More ›
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New High Share for Multifamily Built-for-Rent
According to NAHB analysis of quarterly Census data, the count of multifamily, for-rent housing starts remained elevated during the second quarter of 2023. For the second quarter, 138,000 multifamily residences started construction. Of this total, 135,000 were built-for-rent. The market share of rental units of multifamily construction starts reached an all-time high of almost 98% for the second quarter as… Read More ›
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Single-Family Home Size Moves Lower to More than a Decade Low
An expected impact of the virus crisis is a need for more residential space, as people use homes for more purposes including work. Home size correspondingly increased in 2021 as interest rates reached historic lows. However, as interest rates increased in 2022, and housing affordability worsened, the demand for home size has trended lower. According to second quarter 2023 data… Read More ›
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Declines for Custom Home Building
NAHB’s analysis of Census Data from the Quarterly Starts and Completions by Purpose and Design survey indicates custom home building gained market share during recent quarters but experienced a drop for construction starts. There were 49,000 total custom building starts during the second quarter of the year. This marks almost an 8% decline compared to the second quarter of 2022, consisting with… Read More ›
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Flat Readings for Townhouse Construction
According to NAHB analysis of the most recent Census data of Starts and Completions by Purpose and Design, during the second quarter of 2023, single-family attached starts totaled 38,000, which is flat relative to the second quarter of 2022. Nonetheless, over the last four quarters, townhouse construction starts totaled a solid 141,000 homes, which is almost 5% lower than the prior… Read More ›