There aren’t many ways to make the Census Bureau’s New Residential Construction report exciting, and there are zero ways to frame it in a positive light (unless you want the old “it can only go down for so long before it comes back up”). So let’s just get through this and try to pluck out one or two interesting tidbits. First off, if we’re just looking at the two main headlines in the data (housing starts and building permits) in the context of the past 10 years, things actually could be quite a bit worse. Sure, there’s been a massive contraction from the peak, but the peak was driven by ravenous, temporary demand. It’s no mystery that housing-related metrics have suffered in an environment dominated by the fastest rate spike in 40 years to the highest levels in 20 years. But not every housing metric is suffering. Take “units under construction” for instance. It just hit a new record. Is that a good thing or a bad thing? Based on the previous spikes (1978, 1986, 2006), it’s arguably not great, but the big difference between now and then is that we only have a big spike in units under construction because housing completions haven’t been keeping pace with housing starts and building permits. The build up of “under construction” units is increasingly a factor of the multifamily sector, which hasn’t experienced the same drop as single family construction in terms of permitting. The NAHB has a telling chart in their coverage of single vs multi fam construction. It shows the build up of multi fam units under construction and the decline of single fam.
Related Articles
UWM rolls out construction-to-permanent loans
February 2, 2023
Allen Santos
Housing Wire, Top News
Comments Off on UWM rolls out construction-to-permanent loans
Michigan-based lender United Wholesale Mortgage (UWM) has introduced a construction-to-permanent loan that covers the cost of building a home and then converts to a permanent mortgage once construction is complete. Starting February 1, UWM’s one-time […]
Building Materials Press Even Higher
New-home buyers are facing higher prices, and a big reason is escalating building costs. Building material prices are up 19% over a year ago, according to a report from the Bureau of Labor Statistics. Material […]
Builder Confidence Drops at Fastest Pace in 2 years
May 19, 2022
Mariel Alumit
U.S. Market
Comments Off on Builder Confidence Drops at Fastest Pace in 2 years
Homebuilder confidence may still be higher than almost any time before the pandemic, but it’s now lower than any time since. The post-pandemic lows arrived abruptly with today’s release of the Housing Market Index from […]