Tag Archives: Housing Supply

Construction spending rose 1.2 percent month-over-month in February, according to the Census Bureau. On an annual basis, construction spending was up 7.9 percent in February, reaching an annual rate of $885.1 billion. Residential construction spending increased 2.2 percent over the month, while nonresidential construction spending increased 0.4 percent. Within the residential sector, multifamily construction spending decreased in February while single-family construction spending rose.

The explanation from the National Association of Realtors (NAR) for the drop in the Pending Home Sales Index (PHSI) for February has to be viewed with a jaundiced eye. According to the NAR, the PHSI dropped because of the low inventory of homes for sale. Of course, that wasn't offered as an explanation one month earlier, when the inventory of homes for sale dropped to its lowest level since December 1999 and the PHSI increased. But when the PHSI fell in February, and the inventory of homes for sale increased, the still-low inventory became a convenient excuse.

The National Association of Realtors' (NAR) Pending Home Sales Index (PHSI) fell 0.4 percent to 104.8 in January, the third month-over-month decline in the last four months, the association reported. Economists had expected a 0.7 percent drop to 105.2 from January's originally reported 105.9 The January index reading was revised to 105.2. NAR chief economist Lawrence Yun attributed the drop in the PHSI to weak inventory of existing homes for sale.

The National Association of Home Builders' (NAHB) Improving Markets Index (IMI) showed no signs of slowing down in March, rising for its seventh consecutive month. According to NAHB, 274 metros are now on the mend, a net gain of 15 since February. While 19 markets were dropped, 34 new areas were added, including Birmingham, Alabama; Santa Barbara, California; Colorado Springs, Colorado; and Bloomington, Indiana. For the second straight month, metros in all 50 states are represented on the list.

One of the most interesting results of poring through economic data reports is that the details often tell a different story than the headline. The recent report on retail sales is a case in point. While the vast majority of commentators were impressed with a strong 1.1 percent month-over-month increase in overall sales, those who scratched the surface were rewarded for their efforts by learning more than half of the month-over-month increase came from an increase in gasoline station sales as prices. In addition, coverage of the recent report on housing permits and starts was dominated by the increase in both permits and starts. A closer look at the permit-starts data revealed another important phenomenon: a shift from single-family to multifamily construction.

More than one-third of homes were taken off the market in two weeks or less last month, Redfin revealed in its most recent monthly housing report. On average, 34 percent of homes were under contract within 14 days of their debut in February, an increase from 30.3 percent in January, the online real estate broker reported. Redfin also reported a continued year-over-year decrease in inventory, which has fallen 32 percent from February 2012.

Builder confidence slipped in March to 44, the lowest level since October, the National Association of Home Builders Monday. Economists had expected the Housing Market Index, the measure of confidence, to improve to 47 from February's reading of 46. It was the second straight monthly decline in the index and the third straight month the index failed to increase (it was flat from December to January). Tighter inventories had been expected to improve confidence, but builder attitudes have also been weighed down by prices of new single-family homes.

It's been two weeks since the dreaded sequester took effect, and so far, the only casualty has been the White House tour. There actually have been some positives, with both parties presenting budgets. However, both the GOP budget and the Democratic plan have one major similarity: Each is dead on arrival and destined to at best be a one-house budget, which leaves the country back where it was. Setting a target for practical balance would bring us closer to reducing the deficit and with less pain.

Housing inventory is now at its lowest level since January 1994; home sales have exceeded listings for the past 25 months; and the upward trajectory in home prices starting at the end of last year continues, according to the latest ""US Housing Market Monthly"" from Capital Economics. Home sales are ""normal"" relative to population, but supply remains low, according to the firm. House prices increased 9.7 percent year-over-year in January, continuing a recent trend, and prices show ""no signs of an imminent slowdown,"" according to Capital Economics.

The evidence is clear that the recovery in housing is finally under way, but the question that remains open is whether the positive trends in housing are sustainable, Federal Reserve Board Governor Elizabeth A. Duke said in a speech at the Mortgage Bankers Association's Mid-Winter Housing Finance Conference. In her view, the recovery does appear to be sustainable. ""I do not believe that a flood of houses on the market from households that are currently underwater or from bank REO is likely to materialize or to be sufficient to outpace growing demand,"" she said.