Keyword Site Search

September 2016 Construction Economic Outlook


Top Stories
Sales of new single-family homes soared 12.4% in July, compared to June, as the South recorded well over half the total number of homes sold nationwide. The July pace was the best since October 2007.

Existing home sales fell 3.2% in July, versus June, largely because of a lack of available homes. Year-over-year sales (-1.6%) dropped for the first time since November 2015.

The consensus estimate was that housing starts would dip slightly in July. Instead, total starts data surprised economists by climbing 2.1% higher, compared to June. Starts also jumped 5.6% year-over-year.

Markets in 146 of 340 metro areas have returned to or exceeded their last normal levels of economic and housing activity in the second quarter of 2016, the National Association of Home Builders said, a year-over-year gain of 66 markets.

The National Association of Home Builders' Housing Market Index rose two points to 60 in August, compared to July, a sign that most homebuilders are optimistic about the housing market.

Fannie Mae's Home Purchase Sentiment Index rose 3.3 points to 86.5, its highest level ever. Fannie Mae said the increase was broad-based, as all six components moved upward.

Notable Numbers
The Northeast (+40%) led in percentage gain in July new single-family home sales but of the 654,000 units sold nationwide, 398,000 of those were in the South, just 35,000 were purchased in the Northeast.

Most of the 2.1% gain in housing starts in July was driven by an 8.3% jump in multifamily starts, as single-family starts contributed just 0.5% to the total. Year-over-year starts data show a similar pattern: the combined 5.6% increase is due to a 15.2% jump in the multifamily sector and only a 1.3% bump in single-family starts.

Year-to-date data shows the opposite. Single-family starts are up 10.6% (+15% in the Northeast and Midwest), but multifamily starts are down 0.6%. Combined starts were 6.7% higher, but were -17.4% in the Northeast.

Regional Report
- News
In response to the Q3 Home Price Expectations Survey conducted by Zillow, an online real estate and rental marketplace, 56% of economic and real estate experts questioned said that the migration trend away from Middle America has either begun to reverse or will begin to in coming years. Of those who said the reversal was likely, 56% felt that job growth from companies looking to expand in less expensive locations would bring residents back to the Heartland.

Unemployment rates fell in 285 of 387 major metro areas over the past year. Los Angeles-Long Beach-Anaheim (-1.3%) posted the largest year-over-year drop. Houston-Woodlands-Sugar Land (+0.7%) had the largest increase.

As home prices continued to escalate in most metro regions in the second quarter of 2016 versus the same quarter of 2015, San Jose became the first major market ever with a median existing single-family home price above $1 million.

- Anomalies (National percentages in parentheses)
Year-Over-Year - Single-Family starts (+1.3) - Northeast: -23.9%

Month-Over-Month - Single-Family Starts (+0.5) - Northeast: -23.9%
Combined completions (-8.3) - Northeast: -29.8%

Year-To-Date - Combined permits (-2.2) - Northeast: -42.7%
New Single-Family Home Sales (+12.4%) - Northeast: +47.1%

Remodeling and home improvement expenditures are projected to reach 8.0%, well above the historical average of 4.9%, by the start of 2017. This trend should continue through at least all of next year, according to the Joint Center for Housing Studies of Harvard University.

Private sector construction comprised nearly 4% of the U.S. gross domestic product in 2015. Increases in 30 states drove the industry's total GDP contribution up 0.1% from 2014.

How would the nation's housing stock be affected if, by 2100, sea levels rise six feet as experts have predicted? Zillow has concluded that two million homes -- 2% of all housing, worth about $882 billion -- would be underwater.

As seen in LC/DBM magazine, September 2016.

Widget is loading comments...

Search Site by Story Keywords

Related Stories

July 19, 2019, 6:44 pm PDT

Website problems, report a bug.
Copyright © 2019 Landscape Communications Inc.
Privacy Policy