NAHB Chief Economist Robert Dietz not too long ago offered this housing trade overview within the bi-weekly e-newsletter Eye on the Economic system.
summary housing economics chartHigher prices, longer development occasions and elevated house costs have persistently annoyed consumers, renters and builders. Nonetheless, current stories noticed an uptick in varied housing information.
The NAHB/Wells Fargo Housing Market Index measure of single-family builder sentiment rose 4 factors in October to a degree of 80 — its highest studying since July. And new house gross sales rose 14% to an 800,000 annualized fee in September, though median costs are up nearly 19% from a 12 months in the past. Present house gross sales surged to an eight-month excessive, whereas stock stays at a really low 2.4-month provide.
Housing begins ran counter to those upticks, with total begins down barely due to a 5% decline for multifamily begins of five-plus models. Single-family begins have been flat at a 1.08 million annualized fee. Though demand stays sturdy, greater costs have cooled potential consumers’ intent to buy a house.
In the meantime, greater house values have lifted house fairness and family wealth, which is essentially supporting the house enchancment sector. Remodeler confidence is close to all-time highs, as mirrored within the NAHB/Royal Constructing Merchandise Transforming Market Index, which remained at a degree of 87 for the third quarter.
Provide-chain points proceed to plague the economic system, and NAHB is forecasting these challenges will persist by means of 2022. Residential development materials costs are up 11% to date in 2021 and 14% greater than a 12 months in the past. Lumber costs — although down 62% from their peak in Might — are trending upward but once more, and builders are reporting main delays and better prices of a broad vary of different constructing merchandise.
Additional compounding these points, lot provides are as tight as they’ve ever been, in response to a current NAHB survey that stretches again to 1997.