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Existing Home Sales Climb in July
Third Straight Month of Gains





Sales of existing homes were 2.0 percent higher in July, compared to June. It is also a 10.3 percent improvement on a year-to-year basis, and the annual sales numbers have risen for 10 consecutive months.



Even though the Architecture Billings Index went down one point in July, compared to June, strong economic conditions prevail across the U.S., the American Institute of Architects said.

The July ABI score was 54.7, down slightly from the 55.7 reading of the previous month.

But it still reflects a hike in design services, because any score above 50 indicates an increase in billings, the AIA said.

"The ABI reflects healthy and sustained demand for design services in nearly all nonresidential project types," Kermit Baker, chief economist for the AIA, said.

At the same time, the AIA's new projects inquiry index for July came in at 63.7, up slightly from a reading of 63.4 the previous month.

The ABI is one of the nation's leading economic indicators of construction activity, and is a measure of the approximate 9-12 month lead-time between architecture billings and construction spending.

Despite the one-point drop, there has been a flurry of design activity in recent months, Baker said.

"Some architects are reporting a break in the logjam created by clients placing projects on hold for indefinite periods, which bodes well for business conditions in the months ahead," Baker noted.

But Baker added a note of caution: "There is some uneasiness in the design community that rapid growth in construction costs could escalate beyond development capital and municipal budgets, which could trigger some contraction in the marketplace down the road."

ABI scores above 50 point to an aggregate increase in billings, and scores below 50 reflect a decline. The regional and sector data are developed as three-month moving averages.

Key July ABI highlights:
o Regional averages: Midwest, 58.2; Northeast, 53.5; South, 55.7; West, 53.8.
o Sector index breakdown: institutional, 57.3; mixed practice, 56.8; commercial and industrial, 53.4; multi-family residential, 49.8
o Project inquiries index: 63.7
o Design contracts index: 54.5

Website link: http://www.aia.org/press/AIAB107033

Private residential construction of multi-family projects is outpacing that of single-family homes, at least in the short term.

The National Association of Homebuilders analyzed construction-spending data from the U.S. Census Bureau for the month of June.

Private residential construction, in total, came to $378 billion for the month. Of that, $52 billion was spent in the multi-family sector, and single-family home building accounted for $211 billion.

But on a month-to-month basis, multi-family spending was up nearly 3 percent, while single-family declined slightly by 0.27 percent.

And in an annual comparison, multi-family spending is almost double that of single-family. Multi-family spending rose 23.7 percent, compared to June 2014, and single-family was 12.8 percent higher.

The NAHB concluded from its study that the recent gains in total residential spending have been driven mostly by the multi-family sector. "The pace of the multi-family spending is, however, gradually slowing," the NAHB said in a news release.

NAHB anticipates growing increases in single-family spending in 2015.

Total nonresidential construction spending declined by 0.03 percent in June on a month-to-month basis, but increased 11.5 percent year-to-year.

Manufacturing-related construction, up 62 percent, was the largest contributor to the annual growth rate.

Amusement/recreation increased 48.2 percent, and lodging climbed nearly 42 percent.

Website link: http://www.forconstructionpros.com/news/12098765/steady-increase-in-multifamily-drives-increase-in-total-residential-construction-spending
Custom-home building appears to be on the rise.

For the year that ended on June 30, 2015, there were 158,000 construction starts of custom homes.

That compares to 146,000 starts of custom homes during the year that ended on June 30, 2014.

Analysts from the National Association of Homebuilders studied a U.S. Census Bureau report called Quarterly Starts and Completions by Purpose and Design to come up with those figures.

The definition of a custom home is a house built on an owner's land, with either the owner or a builder acting as the general contractor.

"As measured on a one-year moving average, the market share of custom-home building in terms of total single-family starts is now 23.1 percent, down from a cycle high of 31.5 percent set during the second quarter of 2009," the NAHB said.

Website link: http://eyeonhousing.org/2015/08/year-over-year-gains-for-custom-home-building/







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September 17, 2019, 11:07 pm PDT

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