The Virginia Tech– USDA Forest Service Housing …...Repair and Remodeling’s Percentage of Wood...

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The Virginia Tech – U.S. Forest Service October 2019

Housing Commentary: Section I

Delton Alderman

Forest Products Marketing Unit

Forest Products Laboratory

U.S. Forest Service

Madison, WI

304.431.2734

[email protected]

2019 Virginia Polytechnic Institute and State University VCE-CNRE 91NP

Virginia Cooperative Extension programs and employment are open to all, regardless of age, color, disability, gender, gender identity, gender expression, national origin, political affiliation, race, religion, sexual orientation, genetic information, veteran status, or any other basis protected by law. An equal opportunity/affirmative action employer. Issued in furtherance of Cooperative Extension work, Virginia Polytechnic Institute and State University, Virginia State University, and the U.S. Department of Agriculture cooperating. Edwin J. Jones, Director, Virginia Cooperative Extension, Virginia Tech, Blacksburg; M. Ray McKinnie, Administrator, 1890 Extension Program, Virginia State University, Petersburg.

Urs Buehlmann

Department of Sustainable Biomaterials

College of Natural Resources & Environment

Virginia Tech

Blacksburg, VA

540.231.9759

[email protected]

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Table of Contents Slide 3: Opening Remarks

Slide 4: Housing Scorecard

Slide 5: Wood Use in Construction

Slide 8: New Housing Starts

Slide 12: Regional Housing Starts

Slide 20: New Housing Permits

Slide 24: Regional New Housing Permits

Slide 28: Housing Under Construction

Slide 30: Regional Under Construction

Slide 35: Housing Completions

Slide 38: Regional Housing Completions

Slide 42: New Single-Family House Sales

Slide 45: Region SF House Sales & Price

Slide 53: New SF Sales-Population Ratio

Slide 62: Construction Spending

Slide 65: Construction Spending Shares

Slide 68: Remodeling

Slide 72: Existing House Sales

Slide 77: U.S. Home Ownership

Slide 85: First-Time Purchasers

Slide 88: Affordability

Slide 92: Summary

Slide 93: Virginia Tech Disclaimer

Slide 94: USDA Disclaimer

This report is a free monthly service of Virginia Tech. Past issues are available at:

http://woodproducts.sbio.vt.edu/housing-report.

To request the commentary, please email: [email protected] or [email protected]

http://woodproducts.sbio.vt.edu/housing-report/



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Opening Remarks In October, the vast majority of the United States housing construction and sales markets

were positive – month-over-month and year-over-year. The exceptions were the yearly

single-family under construction and spending data categories. New single-family house

sales and private residential construction spending recorded monthly declines. The

December 6th Atlanta Fed GDPNow™ model estimate for December 2019 projects an

aggregate 6.7% increase for residential investment spending. New private permanent site

expenditures were projected at an 8.0% increase; the improvement spending forecast was an

1.6% increase; and the manufactured/mobile housing projection was a 0.7% increase (all:

quarterly log change and seasonally adjusted annual rate).1

“The housing sector, for several quarters a drag on the overall economy, has become a

contributor, with residential fixed investment growing in the third quarter by a strong 5.1

percent annualized pace amid positive contributions from single-family housing

construction, home improvements, and brokers fees. We expect momentum to carry forward

with moderate growth in construction activity and sales, although housing market activity

will continue to be held back by persistent supply constraints.”2 – Economic & Strategic

Research Group, Fannie Mae.

This month’s commentary contains applicable housing data. Section I contains data and

commentary, and analysis of home ownership. Section II includes regional Federal Reserve

analysis, private indicators, and demographic commentary focusing on “aging in place”.

Sources: 1 www.frbatlanta.org/cqer/research/gdpnow.aspx; 12/6/19; 2 https://www.fanniemae.com/portal/research-insights/forecast/monthly/economic-developments/november-2019.html; 11/18/19

Return TOC Sources: U.S. Department of Commerce-Construction; 1 FRED: Federal Reserve Bank of St. Louis

* All multi-family (2 to 4 + ≥ 5-units) M/M = month-over-month; Y/Y = year-over-year; NC = no change

October 2019 Housing Scorecard

M/M Y/Y

Housing Starts ▲ 3.8% ▲ 8.5%

Single-Family (SF) Starts ▲ 2.0% ▲ 8.2%

Multi-Family (MF) Starts* ▲ 8.6% ▲ 9.2%

Housing Permits ▲ 5.0% ▲ 14.1%

SF Permits ▲ 3.2% ▲ 7.4%

MF Permits* ▲ 8.2% ▲ 26.9%

Housing Under Construction ▲ 0.1% ▲ 2.1%

SF Under Construction ▲ 0.6% ▼ 0.2%

Housing Completions ▲ 10.3% ▲ 12.4%

SF Completions ▲ 4.5% ▲ 8.6%

New SF House Sales ▼ 0.7% ▲ 31.6%

Private Residential Construction Spending ▼ 0.9% ▲ 0.5%

SF Construction Spending ▲ 1.6% ▼ 3.1%

Existing House Sales1 ▲ 1.9% ▲ 4.6%

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New Construction’s Percentage of Wood Products Consumption

Source: USDA Forest Service. Howard, J. and D. McKeever. 2017. U.S. Forest Products Annual Market Review and Prospects, 2013 -2017

21%

32%

47%

Non-structural panels Total Sawnwood Structural panels

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New SF Construction Percentage of Wood Products Consumption

14%

86%

Non-structural panels:

New Housing

Other markets

25%

75%

All Sawnwood: New housing

Other markets

40% 60%

Structural panels:

New housing

Other markets


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Repair and Remodeling’s Percentage of Wood Products Consumption

14%

86%

Non-structural panels:

Remodeling

Other markets

23%

77%

All Sawnwood: Remodeling

Other markets

21%

79%

Structural panels: Remodeling

Other markets


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New Housing Starts

* All start data are presented at a seasonally adjusted annual rate (SAAR).

** US DOC does not report 2 to 4 multifamily starts directly, this is an estimation

((Total starts – (SF + 5 unit MF)).

Source: http://www.census.gov/construction/nrc/pdf/newresconst.pdf; 11/19/19

Total Starts* SF Starts MF 2-4 Starts** MF ≥5 Starts

October 1,314,000 936,000 16,000 362,000

September 1,266,000 918,000 9,000 339,000

2018 1,211,000 865,000 19,000 327,000

M/M change 3.8% 2.0% 77.8% 6.8%

Y/Y change 8.5% 8.2% -15.8% 10.7%

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Total Housing Starts

* Percentage of total starts.

US DOC does not report 2 to 4 multifamily starts directly, this is an estimation: ((Total starts – (SF + ≥ MF)).

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

SF Starts 2-4 MF Starts ≥5 MF Starts

Total starts 58-year average: 1,439 m units

SF starts 58-year average: 1,022 m units MF starts 53-year average: 420 m units

SAAR = Seasonally adjusted annual rate; in thousands

Total SF 936,000 71.2%

Total 2-4 MF 16,000 1.2%

Total ≥ 5 MF 362,000 27.5%

Total Starts*

1,314,000


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New SF Starts

Sources: http://www.census.gov/construction/nrc/pdf/newresconst.pdff and The Federal Reserve Bank of St. Louis; 11/19/19

New SF starts adjusted for the US population

From October 1959 to October 2007, the long-term ratio of new SF starts to the total US non-institutionalized

population was 0.0066; in October 2019 it was 0.0036 – a slight increase from September (0.0035). The long-

term ratio of non-institutionalized population, aged 20 to 54 is 0.0103; in October 2019 was 0.0064 – also an

increase from September (0.0062). From a population worldview, new SF construction is less than what is

necessary for changes in population (i.e., under-building).

0.0000

0.0020

0.0040

0.0060

0.0080

0.0100

0.0120

0.0140

0.0160

0.0180

0.0200

Ratio: SF Housing Starts/Civilian Noninstitutional Population

Ratio: SF Housing Starts/Civilian Noninstitutional Population (20-54)

20 to 54 population/SF starts: 1/1/59 to 7/1/07 ratio: 0.0103

20 to 54 year old classification: 10/19 ratio: 0.0064

Total: 10/19 ratio: 0.0036 Total non-institutionalized/Start ratio: 1/1/59 to 7/1/07: 0.0066

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Total Housing Starts: Six-Month Average

1,314

1,276

1,000

1,050

1,100

1,150

1,200

1,250

1,300

1,350

1,400

Total Starts: (monthly) Total Starts: 6-month Ave.

SAAR; in thousands


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SF Housing Starts: Six-Month Average

936

885

700

750

800

850

900

950

1,000

SF Starts: (monthly) SF Starts: 6-month Ave.

SAAR; in thousands


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New Housing Starts by Region

NE = Northeast, MW = Midwest, S = South, W = West

US DOC does not report 2 to 4 multi-family starts directly, this is an estimation (Total starts – (SF + ≥ 5 MF starts).


0

200

400

600

800

1,000

1,200

Total NE Starts Total MW Starts Total S Starts Total W Starts

SAAR; in thousands

Total NE 89,000 6.8%

Total MW 175,000 13.3%

Total S 689,000 52.4%

Total W 361,000 27.5%

Total Regional Starts*


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All data are SAAR; NE = Northeast and MW = Midwest.

** US DOC does not report multifamily starts directly, this is an estimation (Total starts – SF starts).

NE Total NE SF NE MF**

October 89,000 41,000 48,000

September 114,000 61,000 53,000

2018 90,000 72,000 18,000

M/M change -21.9% -32.8% -9.4%

Y/Y change -1.1% -43.1% 166.7%

MW Total MW SF MW MF

October 175,000 120,000 55,000

September 161,000 119,000 42,000

2018 187,000 122,000 65,000

M/M change 8.7% 0.8% 31.0%

Y/Y change -6.4% -1.6% -15.4%


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All data are SAAR; S = South and W = West.

** US DOC does not report multifamily starts directly, this is an estimation (Total starts – SF starts).

S Total S SF S MF**

October 689,000 541,000 148,000

September 684,000 524,000 160,000

2017 596,000 430,000 166,000

M/M change 0.7% 3.2% -7.5%

Y/Y change 15.6% 25.8% -10.8%

W Total W SF W MF

October 361,000 234,000 127,000

September 307,000 214,000 93,000

2018 338,000 241,000 97,000

M/M change 17.6% 9.3% 36.6%

Y/Y change 6.8% -2.9% 30.9%


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Total SF Housing Starts by Region




0

100

200

300

400

500

600

700

800

900

NE SF Starts MW SF Starts S SF Starts W SF Starts

SAAR; in thousands

Total NE 41,000 3.1%

Total MW 120,000 9.1%

Total S 541,000 41.2%

Total W 234,000 17.8%

Total SF Starts by Region*


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Nominal & SAAR SF Starts

Nominal and Adjusted New SF Monthly Starts

Presented above is nominal (non-adjusted) new SF start data contrasted against SAAR data.

The apparent expansion factor “… is the ratio of the unadjusted number of houses started in the US to the

seasonally adjusted number of houses started in the US (i.e., to the sum of the seasonally adjusted values for

the four regions).” – U.S. DOC-Construction

815

877

824

834 791860

839 878831

888948

847

886 900 882

892

937

854

860

889 880865

804

814

966

792

833 862

814

864

871

909

918 936

15.3 1…11.910.8 10.3 10.3 10.6 11.2 11.5 11.7 13.7

15.414.8

14.4 12.2 10.5 10.6 10.2 10.5 11.0 11.711.5

13.715.5

15.114.512.0 10.6 10.5 10.4 10.4 11.2 11.5 11.8

53

59

70

77 77

84 7978

73 76

69

5560

62

73

85

89

84

82 81 75 75

59

53

64

55

70

82

78

83 8481

80 79

0

10

20

30

40

50

60

70

80

90

100

0

200

400

600

800

1,000

1,200

New SF Starts (adj) Apparent Expansion Factor New SF Starts (non-adj)

LHS: SAAR; in thousands RHS: Non-adjusted; in thousands

October 2018 and October 2019


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MF Housing Starts by Region




0

50

100

150

200

250

NE MF Starts MW MF Starts S MF Starts W MF Starts

SAAR; in thousands

Total NE 48,000 3.7%

Total MW 55,000 4.2%

Total S 148,000 11.3%

Total W 127,000 9.7%

Total MF Starts by Region*


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SF vs. MF Housing Starts (%)

78.5%

71.2%

21.5% 28.8%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Single-Family Starts: % Multi-Family Starts: %


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New Housing Permits

* All permit data are presented at a seasonally adjusted annual rate (SAAR).

Total

Permits*

SF

Permits

MF 2-4 unit

Permits

MF ≥ 5 unit

Permits

October 1,461,000 909,000 47,000 505,000

September 1,391,000 881,000 34,000 476,000

2018 1,281,000 846,000 39,000 396,000

M/M change 5.0% 3.2% 38.2% 6.1%

Y/Y change 14.1% 7.4% 20.5% 27.5%


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Total New Housing Permits

* Percentage of total permits.

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

SF Permits 2-4 MF Permits ≥5 MF Permits

SAAR; in thousands

Total SF 909,000 62.2%

Total 2-4 MF 47,000 3.2%

Total ≥ 5 MF 505,000 34.6%

Total Permits*

1,461,000


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Nominal & SAAR SF Permits

Nominal and Adjusted New SF Monthly Permits

Presented above is nominal (non-adjusted) new SF start data contrasted against SAAR data.

The apparent expansion factor “…is the ratio of the unadjusted number of houses started in the US to the

seasonally adjusted number of houses started in the US (i.e., to the sum of the seasonally adjusted values for


806

834

826

796 784

813

817 803

831

854864

877

870

886851

863 843

853

871

829858

846

843

827

821

814 813

786

810

823 829

875

881 909

14.5 15.6 14.310.3 11.310.4 10.011.6 10.8 12.812.2 14.1

15.4 14.3 13.7 11.4 10.710.1 10.6 10.6 10.9 13.0 11.4 13.6 15.4 14.0 14.2 11.4 10.7 10.211.0 11.2 11.1 12.9

54

58

77

69

7882

69

77

6771 62

57

62

62

76

79

8482

78 79

65

74

61

53

58

57

69

76

81

75

78 79

71

80

0

10

20

30

40

50

60

70

80

90

0

100

200

300

400

500

600

700

800

900

1,000

New SF Permits (adj) Apparent Expansion Factor New SF Permits (non-adj)

October 2018 and October 2019

LHS: SAAR; in thousands RHS: Non-adjusted; in thousands


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New Housing Permits by Region

NE = Northeast; ME = Midwest

* All data are SAAR

** US DOC does not report multifamily permits directly, this is an estimation (Total permits – SF permits).

NE Total* NE SF NE MF**

October 141,000 49,000 92,000

September 118,000 46,000 72,000

2018 129,000 61,000 68,000

M/M change 19.5% 6.5% 27.8%

Y/Y change 9.3% -19.7% 35.3%

MW Total* MW SF MW MF**

October 176,000 119,000 57,000

September 173,000 124,000 49,000

2018 187,000 114,000 73,000

M/M change 1.7% -4.0% 16.3%

Y/Y change -5.9% 4.4% -21.9%


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New Housing Permits by Region

S = South; W = West

* All data are SAAR

** US DOC does not report multifamily permits directly, this is an estimation (Total permits – SF permits).

S Total* S SF S MF**

October 776,000 521,000 255,000

September 735,000 507,000 228,000

2018 644,000 468,000 176,000

M/M change 5.6% 2.8% 11.8%

Y/Y change 20.5% 11.3% 44.9%

W Total* W SF W MF**

October 368,000 220,000 148,000

September 365,000 204,000 161,000

2018 321,000 203,000 118,000

M/M change 0.8% 7.8% -8.1%

Y/Y change 14.6% 8.4% 25.4%


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Total Housing Permits by Region



0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

SF Permits 2-4 MF Permits ≥5 MF Permits

SAAR; in thousands

Total SF 909,000 62.2%

Total 2-4 MF 47,000 3.2%

Total ≥ 5 MF 505,000 34.6%

Total Permits*

1,461,000


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SF Housing Permits by Region



0

100

200

300

400

500

600

700

800

900

NE SF Permits MW SF Permits S SF Permits W SF Permits

SAAR; in thousands

Total NE 141,000 9.7%

Total MW 176,000 12.0%

Total S 776,000 53.1%

Total W 368,000 25.2%

Total Regional Permits*


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MF Housing Permits by Region



0

50

100

150

200

250

300

NE MF Permits MW MF Permits S MF Permits W MF Permits

SAAR; in thousands

Total NE 92,000 6.3%

Total MW 57,000 3.9%

Total S 255,000 17.5%

Total W 148,000 10.1%

Total MF Permits*


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New Housing Under Construction (HUC)

All housing under construction data are presented at a seasonally adjusted annual rate (SAAR).

** US DOC does not report 2-4 multifamily units under construction directly, this is an estimation

((Total under construction – (SF + 5 unit MF)).

Total Under

Construction*

SF Under

Construction

MF 2-4 unit**

Under

Construction

MF ≥ 5 unit Under

Construction

October 1,161,000 527,000 11,000 623,000

September 1,160,000 524,000 11,000 625,000

2018 1,137,000 528,000 13,000 596,000

M/M change 0.1% 0.6% 0.0% -0.3%

Y/Y change 2.1% -0.2% -15.4% 4.5%


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Total Housing Under Construction

* Percentage of total housing under construction units.

US DOC does not report 2 to 4 multi-family under construction directly, this is an estimation (Total under constructions – (SF + ≥ 5 MF under

construction).

0

100

200

300

400

500

600

700

800

900

1,000

SF HUC 2-4 MF HUC ≥5 MF HUC

Total SF 527,000 45.4%

Total 2-4 MF 11,000 0.9%

Total ≥ 5 MF 623,000 53.7%

Total HUC*

1,161,000

SAAR; in thousands


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New Housing Under Construction by Region


** US DOC does not report multifamily units under construction directly, this is an estimation

(Total under construction – SF under construction).


October 178,000 57,000 121,000

September 179,000 58,000 121,000

2018 187,000 61,000 126,000

M/M change -0.6% -1.7% 0.0%

Y/Y change -4.8% -6.6% -4.0%


October 147,000 77,000 70,000

September 147,000 77,000 70,000

2018 152,000 80,000 72,000

M/M change 0.0% 0.0% 0.0%

Y/Y change -3.3% -3.8% -2.8%


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New Housing Under Construction by Region


** US DOC does not report multifamily units under construction directly, this is an estimation

(Total under construction – SF under construction).

S Total S SF S MF**

October 503,000 253,000 250,000

September 503,000 250,000 253,000

2018 458,000 242,000 216,000

M/M change 0.0% 1.2% -1.2%

Y/Y change 9.8% 4.5% 15.7%

W Total W SF W MF

October 333,000 140,000 193,000

September 331,000 139,000 192,000

2018 340,000 145,000 195,000

M/M change 0.6% 0.7% 0.5%

Y/Y change -2.1% -3.4% -1.0%


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Total Housing Under Construction by Region




construction).

0

100

200

300

400

500

600

700

NE HUC MW HUC S HUC W HUC

Total NE 178,000 15.3%

Total MW 147,000 15.3%

Total S 503,000 43.3%

Total W 333,000 28.7%

Total Regional HUC*SAAR; in thousands


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SF Housing Under Construction by Region


NE = Northeast, MW = Midwest, S = South, W = West.


construction).

0

50

100

150

200

250

300

350

400

450

NE SF HUC MW SF HUC S SF HUC W SF HUC

SAAR; in thousands

Total NE 57,000 4.9%

Total MW 77,000 6.6%

Total S 253,000 21.8%

Total W 140,000 12.1%

Total SF HUC*


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MF Housing Under Construction by Region




construction).

0

50

100

150

200

250

300

NE MF HUC MW MF HUC S MF HUC W MF HUC

SAAR; in thousands


Total NE 121,000 10.4%

Total MW 70,000 6.0%

Total S 250,000 21.5%

Total W 193,000 16.6%

Total MF HUC*

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New Housing Completions

* All completion data are presented at a seasonally adjusted annual rate (SAAR).

** US DOC does not report multifamily completions directly, this is an estimation ((Total completions – (SF + ≥ 5 unit MF)).

Total

Completions*

SF

Completions

MF 2-4 unit**

Completions

MF ≥ 5 unit

Completions

October 1,256,000 897,000 5,000 354,000

September 1,139,000 858,000 3,000 278,000

2018 1,117,000 826,000 9,000 282,000

M/M change 10.3% 4.5% 66.7% 27.3%

Y/Y change 12.4% 8.6% -44.4% 25.5%


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Total Housing Completions

* Percentage of total housing completions

** US DOC does not report multifamily completions directly, this is an estimation ((Total completions – (SF + ≥ 5 unit MF)).

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Total SF Completions Total 2-4 MF Completions Total ≥ 5 MF Completions

SAAR; in thousands

Total SF 897,000 71.4%

Total 2-4 MF 5,000 0.4%

Total ≥ 5 MF 354,000 28.2%

Total Completions*

1,256,000


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New Housing Completions by Region


** US DOC does not report multifamily units completions directly, this is an estimation

(Total completions – SF completions).


October 121,000 57,000 64,000

September 104,000 65,000 39,000

2018 92,000 55,000 37,000

M/M change 16.3% -12.3% 64.1%

Y/Y change 31.5% 3.6% 73.0%


October 153,000 111,000 42,000

September 148,000 110,000 38,000

2018 179,000 125,000 54,000

M/M change 3.4% 0.9% 10.5%

Y/Y change -14.5% -11.2% -22.2%


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** US DOC does not report multifamily units completions directly, this is an estimation

(Total completions – SF completions).

New Housing Completions by Region

S Total S SF S MF**

October 621,000 499,000 122,000

September 600,000 487,000 113,000

2018 546,000 423,000 123,000

M/M change 3.5% 2.5% 8.0%

Y/Y change 13.7% 18.0% -0.8%

W Total W SF W MF

October 361,000 230,000 131,000

September 287,000 196,000 91,000

2018 300,000 223,000 77,000

M/M change 25.8% 17.3% 44.0%

Y/Y change 20.3% 3.1% 70.1%


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Total Housing Completions by Region


US DOC does not report 2 to 4 multi-family completions directly, this is an estimation (Total completions – SF completions).


0

100

200

300

400

500

600

700

800

900

1,000

NE Completions MW Completions S Completions W Completions

SAAR; in thousands

Total NE 121,000 9.6%

Total MW 153,000 12.2%

Total S 621,000 49.4%

Total W 361,000 28.7%

Total Regional Completions*


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SF Housing Completions by Region




0

200

400

600

800

1,000

1,200

NE SF Completions MW SF Completions S Completions W SF Completions

SAAR; in thousands

Total NE 57,000 4.5%

Total MW 111,000 8.8%

Total S 499,000 39.7%

Total W 230,000 18.3%

Total SF Completions*


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MF Housing Completions by Region




0

50

100

150

200

250

NE MF Completions MW MF Completions S MF Completions W MF Completions

SAAR; in thousands

Total NE 64,000 5.1%

Total MW 42,000 3.3%

Total S 122,000 9.7%

Total W 131,000 10.4%

Total MF Completions*


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New Single-Family House Sales

* All new sales data are presented at a seasonally adjusted annual rate (SAAR)1 and housing prices are adjusted at irregular intervals2.

Sources: 1 https://www.census.gov/construction/nrs/index.html; 11/26/19; 2 https://www.census.gov/construction/nrs/pdf/newressales.pdf 3 http://us.econoday.com/; 11/26/19

New SF sales were greater than the consensus forecast3 of 707 m (range: 694 m to 720 m).

The past three month’s new SF sales data also were revised:

July initial: 635 m revised to 660 m;

August initial: 713 m revised to 706 m;

September initial: 701 m revised to 738 m.

New SF

Sales*

Median

Price

Mean

Price

Month's

Supply

October 733,000 $316,700 $383,300 5.3

September 738,000 $310,200 $366,900 5.2

2018 557,000 $328,300 $394,900 7.2

M/M change -0.7% 2.1% 4.5% 1.9%

Y/Y change 31.6% -3.5% -2.9% -26.4%

Return TOC

New SF House Sales


0

200

400

600

800

1,000

1,200

1,400

Total New SF Sales

1963-2000 average: 633,895 units

October 2019: 733,000 1963-2016 average: 650,963 units

SAAR; in thousands

Return TOC

New SF Housing Sales: Six-month average & monthly


683

733

0

100

200

300

400

500

600

700

800

Six-month SF Sales Average New SF Sales (monthly)

SAAR; in thousands

Return TOC

New SF House Sales by Region and Price Category

NE = Northeast; MW = Midwest; S = South; W = West 1 All data are SAAR 2 Houses for which sales price were not reported have been distributed proportionally to those for which sales price was report ed; 3 Detail October not add to total because of rounding. 4 Housing prices are adjusted at irregular intervals. 5 Z = Less than 500 units or less than 0.5 percent

Sources: 1,2,3 https://www.census.gov/construction/nrs/index.html; 11/26/19; 4https://www.census.gov/construction/cpi/pdf/descpi_sold.pdf

NE MW S W

October 27,000 75,000 436,000 195,000

September 33,000 72,000 451,000 182,000

2018 23,000 64,000 310,000 160,000

M/M change -18.2% 4.2% -3.3% 7.1%

Y/Y change 17.4% 17.2% 40.6% 21.9%

≤ $150m

$150 -

$199.9m

$200 -

299.9m

$300 -

$399.9m

$400 -

$499.9m

$500 -

$749.9m ≥ $750m

October1,2,3,4 1,000 4,000 20,000 14,000 7,000 7,000 4,000

September 1,000 5,000 20,000 16,000 6,000 6,000 2,000

2018 2,000 2,000 14,000 11,000 6,000 5,000 2,000

M/M change 0.0% -20.0% 0.0% -12.5% 16.7% 16.7% 100.0%

Y/Y change -50.0% 100.0% 42.9% 27.3% 16.7% 40.0% 100.0%

New SF sales: % 1.8% 7.0% 35.1% 24.6% 12.3% 12.3% 7.0%

Return TOC

New SF House Sales

• Total new sales by price category and percent.

1,000

4,000

20,000

14,000

7,000

7,000

4,000

- 5,000 10,000 15,000 20,000 25,000

≤ $150m

$150-$199.9m

$200-299.9m

$300-$399.9m

$400-$499.9m

$500-$749.9m

≥ $750m

October New SF Sales*

≤ $150m 1.8%

$150-199.9m 7.0%

$200-299.9m 35.1%

$300-$399.9m 24.6%

$400-$499.9m 12.3%

$500-$749.9m 12.3%

≥ $750m 7.0%

New SF Sales: %


Return TOC

New SF House Sales by Region

NE = Northeast; MW = Midwest; S = South; W = West

* Percentage of total new sales.

0

100

200

300

400

500

600

700

NE SF Sales MW SF Sales S SF Sales W SF Sales

Total NE 27,000 3.7%

Total MW 75,000 10.2%

Total S 436,000 59.5%

Total W 195,000 26.6%

Total SF Sales*

SAAR; in thousands


Return TOC

New SF House Sales by Price Category

* Sales tallied by price category. 0

50

100

150

200

250

300

350

400

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

< $150

$150-199.9

$200-299.9

$300-$399.9

$400-$499.9

$500-$749.9

> $750

2018 Total New SF Sales*: 617 m units

2002-2018; in thousands, and thousands of dollars; SAAR

Source: https://www.census.gov/construction/nrs/index.html; 3/25/19

Return TOC

New SF House Sales

New SF Sales

$400m houses: 2002 – October 2019

The sales share of $400 thousand plus SF houses is presented above1, 2. Since the beginning of 2012, the

upper priced houses have and are garnering a greater percentage of sales. A decreasing spread indicates

that more high-end luxury homes are being sold. Several reasons are offered by industry analysts; 1)

builders can realize a profit on higher priced houses; 2) historically low interest rates have indirectly

resulted in increasing house prices; and 3) purchasers of upper end houses fared better financially coming

out of the Great Recession.

Source: 1 https://www.census.gov/construction/nrs/index.html; 2 https://www.census.gov/construction/cpi/pdf/descpi_sold.pdf 11/26/19

92.4%

68.4%

7.6%

31.6%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

% of Sales: ≤ $400m % of Sales: ≥ $400m

Return TOC

New SF House Sales

New SF Sales: ≤ $ 200m and ≥ $500m: 2002 to October 2019

The number of ≤ $200 thousand plus SF houses has declined dramatically since 2002 1, 2. Subsequently,

from 2012 onward, the ≥ $500 thousand class has soared (on a percentage basis) in contrast to the

≤ $200m class. One of the most oft mentioned reasons for this occurrence is builder net margins.

Note: Sales values are not adjusted for inflation.

Source: 1 https://www.census.gov/construction/nrs/index.html; 2 https://www.census.gov/construction/cpi/pdf/descpi_sold.pdf 11/26/19

92.5%

31.3%

7.5%

68.8%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

< $199.999m (%) > $500m (%)

Return TOC

Total New SF House Sales by Square Feet of Floor Area

Total new SF Sales: ≤ 1,400 square feet and ≥ 4,000 square feet: 1999 to 2018

The number of SF houses sold (≥ 4,000 sq ft) has risen dramatically since 2010 in comparison to the ≤

1,400 sq ft houses.. Some of the most oft mentioned reasons for this is builder net margins and regulation.

119

21

143

167

0

50

100

150

200

250

300

350

≤ 1,400 sq ft ≥ 4,000 sq ft

in thousands of units; SAAR


Return TOC

New Detached SF House Sales by Square Feet of Floor Area

New Detached SF Sales: ≤ 1,400 square feet and ≥ 4,000 square feet: 1999 to 2018

93

18

140

160

0

50

100

150

200

250

300

≤ 1,400 sq ft ≥ 4,000 sq ft

in thousands of units; SAAR


Return TOC

New SF House Sales

New SF sales adjusted for the US population

From October 1963 to October 2007, the long-term ratio of new house sales to the total US non-

institutionalized population was 0.0039; in October 2019 it was 0.0028 – no change from September. The

non-institutionalized population, aged 20 to 54 long-term ratio is 0.0062; in October 2019 it was 0.0050 – also

no change from September. All are non-adjusted data. From a population viewpoint, construction is less than

what is necessary for changes in the population (i.e., under-building).

Sources: https://www.census.gov/construction/nrs/index.html and The Federal Reserve Bank of St. Louis; 11/26/19

0.000

0.001

0.002

0.003

0.004

0.005

0.006

0.007

0.008

0.009

0.010

0.011

Ratio of New SF Sales/Civilian Noninstitutional Population Ratio of New SF Sales/Civilian Noninstitutional Population (20-54)

Total US non-institutionalized population/new SF sales: 1/1/63 to 12/31/07 ratio: 0.0039

All new SF sales: 10/19 ratio: 0.0028

20 to 54 year old population/New SF sales: 1/1/63 to 12/31/07 ratio: 0.0062 20 to 54: 10/19 ratio: 0.0050

Return TOC

Nominal vs. SAAR New SF House Sales

Nominal and Adjusted New SF Monthly Sales

Presented above is nominal (non-adjusted) new SF sales data contrasted against SAAR data.

The apparent expansion factor “…is the ratio of the unadjusted number of houses sold in the US to the

seasonally adjusted number of houses sold in the US (i.e., to the sum of the seasonally adjusted values for


599615

638

590 606619

564

559

639

616

711

653633

663672

629650

618609

604

607

557

615633 607

669

693656

598

729

660

706 738 733

13.912.110.5 10.5 10.6 11.111.812.4 12.8 12.6 14.2 14.5 13.2

12.310.210.3 10.5 11.0 11.7 12.9 13.213.0 14.014.8 13.111.7

10.2 10.3 10.711.0 12.012.612.9 12.9

43

51

61

56 5756

48

45

5049

50

45

48

54

66

61 62

56

52

47

46

43

44

38

49

57

6864

56

66

55

56

57

57

-

10

20

30

40

50

60

70

80

0

100

200

300

400

500

600

700

800

New SF sales (adj) Apparent Expansion Factor New SF sales (non-adj)

0

Contrast of October 2018 and

October 2019

Nominal & SF data, in thousands RHS: New SF SAAR LHS: Nominal & Expansion Factors


Return TOC

New SF House Sales

Not SAAR

Total

Not

started

Under

Construction Completed

October 733,000 250,000 237,000 246,000

September 738,000 220,000 248,000 270,000

2018 557,000 151,000 216,000 190,000

M/M change -0.7% 13.6% -4.4% -8.9%

Y/Y change 31.6% 65.6% 9.7% 29.5%

Total percentage 34.1% 32.3% 33.6%

New SF Houses Sold During Period


Return TOC

Not SAAR

New SF House Sales: Sold During Period

0

100

200

300

400

500

600

Not started Under Construction Completed

Thousands of units; not SAAR

Total

Not

started

Under


733,000 250,000 237,000 246,000

New SF Houses Sold During Period


Return TOC

New SF House Sales: For Sale at End of Period

Not SAAR

Total

Not

started

Under


October 322,000 56,000 189,000 77,000

September 321,000 53,000 191,000 77,000

2018 333,000 58,000 201,000 74,000

M/M change 0.3% 5.7% -1.0% 0.0%

Y/Y change -3.3% -3.4% -6.0% 4.1%

Total percentage 17.4% 58.7% 23.9%

New SF Houses for Sale at the end of the Period


Return TOC

New SF Houses for Sale at End of Period

0

50

100

150

200

250

300

350

Not started Under construction Completed

Total

Not

started

Under


322,000 56,000 189,000 77,000

New SF Houses for Sale at the end of the Period



Return TOC

New SF House Sales

Not SAAR

Total NE MW S W

October 327,000 29,000 39,000 170,000 88,000

September 326,000 28,000 37,000 173,000 88,000

2018 335,000 27,000 42,000 177,000 89,000

M/M change 0.3% 3.6% 5.4% -1.7% 0.0%

Y/Y change -2.4% 7.4% -7.1% -4.0% -1.1%

New SF Houses for Sale at the end of the Period by Region*


Return TOC

New SF Houses Sale at End of Period by Region


* Percentage of new SF sales.

0

50

100

150

200

250

300

NE MW S W


Northeast 29,000 8.9%

Midwest 39,000 11.9%

South 170,000 52.0%

West 88,000 26.9%

For sale at end of period*

327,000


Return TOC

New SF Housing

Source: https://www.builderonline.com/money/economics/housings-newest-leading-indicator-new-home-pending-sales-index-reveals-mojo-in-top-10-and-national-markets_o/; 12/2/19

Meyers Research New Home Pending Sales Index (PSI) for October 2019

“The New Home PSI, backed by data from Zonda and Metrostudy, shows pending sales increased both

year-over-year and month-over-month across the United States. The index is a leading residential real

estate indicator based on the number of new home sales contracts signed across the country. The New

Home PSI came in at 119.0 for October, representing a 14.5% increase from October 2018. On a month-

over-month basis, new home sales increased by 0.2% between September and October 2019.

The US housing market regained momentum this year after a tough close to 2018. October’s new home

sales capture stronger demand as lower mortgage rates, softer home price appreciation, and positive wage

trends favor buyers.” – Ali Wolf, Director of Economic Research, Meyers Research

Return TOC

October 2019 Construction Spending

* billion. ** The US DOC does not report improvement spending directly, this is a monthly estimation:

((Total Private Spending – (SF spending + MF spending)).

All data are SAARs and reported in nominal US$.

Total Private

Residential* SF MF Improvement**

October $508,198 $279,080 $59,466 $169,652

September $512,634 $274,596 $60,403 $177,635

2018 $505,566 $287,992 $60,768 $156,806

M/M change -0.9% 1.6% -1.6% -4.5%

Y/Y change 0.5% -3.1% -2.1% 8.2%

Source: http://www.census.gov/construction/c30/pdf/privsa.pdf; 12/2/19

Return TOC

Total Construction Spending (nominal): 1993 – October 2019

Reported in nominal US$.

The US DOC does not report improvement spending directly, this is a monthly estimation for 2019.


$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

Total Residential Spending (nominal) SF Spending (nominal)

MF Spending (nominal) Remodeling Spending (nominal)

Total Private Nominal Construction Spending: $508.198 bil

SAAR; in millions

Return TOC

Total Construction Spending (adjusted): 1993-2019*

Reported in adjusted US$: 1993 – 2018 (adjusted for inflation, BEA Table 1.1.9); *January to October 2019 reported in nominal US$.

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000

Total Residential Spending (adj.) SF Spending (adj.) MF Spending (adj.) Remodeling Spending (adj.)

SAAR; in millions of US dollars (adj.)


Return TOC

Construction Spending Shares:

1993 to October 2019

Total Residential Spending: 1993 through 2006

SF spending average: 69.2%

MF spending average: 7.5 %

Residential remodeling (RR) spending average: 23.3 % (SAAR).

Note: 1993 to 2017 (adjusted for inflation, BEA Table 1.1.9); Jan-October 2018 reported in nominal US$.

Source: http://www.census.gov/construction/c30/pdf/privsa.pdf and http://www.bea.gov/iTable/iTable.cfm; 12/2/19

67.3

54.9

5.2

11.7

27.5

33.4

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

SF, MF, & RR: Percent of Total Residential Spending (adj.)

SF % MF % RR %

percent

Return TOC

Adjusted Construction Spending: Y/Y Percentage Change,


Nominal Residential Construction Spending:

Y/Y percentage change, 1993 to October 2019

Presented above is the percentage change of inflation adjusted Y/Y construction spending. RR

expenditures were positive on a percentage basis, year-over-year (2019 data reported in nominal dollars).

-60.0

-40.0

-20.0

0.0

20.0

40.0

60.0

SF Spending-nom.: Y/Y % change MF Spending-nom.: Y/Y % change Remodeling Spending-nom.: Y/Y % change


Return TOC

Total Adjusted Construction Spending: Y/Y Percentage Change,


Inflation Adjusted Residential Construction Spending:

Y/Y percentage change, 1993 to October 2019

Total and RR expenditures were positive in October, all others were negative; 2019 data reported in

nominal dollars.

-60.0

-40.0

-20.0

0.0

20.0

40.0

60.0

Total Residential Spending Y/Y % change (adj.) SF Spending Y/Y % change (adj.)

MF Spending Y/Y % change (adj.) Remodeling Spending Y/Y % change (adj.)


Return TOC

Remodeling

Source: https://www.remodeling.hw.net/benchmarks/economic-outlook-rri/rri-positive-but-projects-smaller-growth-in-next-two-years_o/; 11/22/19

Remodeling

RRI Positive, But Projects Smaller Growth in Next Two Years

Annual growth rates in the remodeling industry have cooled significantly compared with the 5% growth averaged the past several years.

“Big-ticket remodeling spending increased 2.8% year over year (YOY) in the third quarter

of 2019 and 0.5% from the second quarter, Metrostudy/Zonda announced in its release of the

latest Residential Remodeling Index (RRI). The index climbed to a new high of 118.9,

meaning economic conditions known to influence remodeling activity are 18.9% better than

the old peak in 2007.

While the positive growth in the RRI marks the 30th consecutive quarter of YOY gains since

remodeling activity bottomed in 2011, growth is coming at increasingly smaller rates.

Annual rates have cooled significantly compared with the 5% growth that the industry

averaged the past several years.

Metrostudy/Zonda calls for continued gains over the next few years, but at a slower rate than

the industry has become accustomed to. The RRI is projected to average YOY gains of

2.2% in 2020 and 2.4% in 2021. The projected gains for 2020 are marginally higher than

projections from the second quarter RRI.

The strength of the consumer is continuing to support the economy as business investment

and manufacturing are being constrained by a near 16-month-long trade war with China,

according to Metrostudy/Zonda chief economist Mark Boud.” – Vincent Salandro, Assistant

Editor, Remodeling and ProSales

https://www.remodeling.hw.net/benchmarks/economic-outlook-rri/remodeling-outlook-remains-positive-despite-expectations-of-tight-housing-market-rri-finds_o

Return TOC

Remodeling


Remodeling

RRI Positive, But Projects Smaller Growth in Next Two Years

““Even if a trade agreement with China is reached, slower employment growth is projected

over the next few years as the economic cycle wanes. In addition, existing home sales

continue to struggle under lack of supply, a trend that will likely continue given the low rates

of new home construction, particularly at the lower price levels. Weaker employment-

generated demand and low housing turnover points to slower rates of remodeling growth

compared to the last few years of booming business, Boud said.”

Metrostudy/Zonda projects the number of remodeling projects worth $1,000 or more will

total 13.0 million in 2019, a 3.2% YOY increase. Big-ticket exterior and flooring projects

are expected to experience the largest increases compared to 2018, while pool and addition

projects will have the smallest YOY increases. The inflation-adjusted value of big-ticket

remodeling projects in 2019 is predicted to increase $9.2 million from 2018 to $203.7 billion

by the end of 2019. The number of big-ticket remodeling projects is forecast to increase by

roughly 300,000 in 2020 to 13.3 million, with the inflation-adjusted value of remodeling

projects predicted to jump to $211.5 billion.

According to Metrostudy/Zonda, all but one metro area — Bismarck, N.D. — will see

growth in 2019 remodeling project volume. The average growth rate in project volume in

2019 nationally is projected to be 3.1%. In 2020, 25 — or 6.6% — of the 381 metro areas

surveyed are projected to see declines in remodeling project volume.” – Vincent Salandro,

Assistant Editor, Remodeling and ProSales

Return TOC

Remodeling


Return TOC

Remodeling

Source: https://twitter.com/hashtag/JBRECDailyInsight; 11/4/19

John Burns Real Estate Consulting LLC

Repair & Remodel

“The age of the housing stock should factor into every repair & remodel related business

decision. The census reports the median owner-occupied housing unit was built in 1978, 41

years ago. R&R project rates don't slow down much for homes 25+ years old.” – Jacob

Belk, John Burns Real Estate Consulting LLC

Return TOC

Existing House Sales National Association of Realtors

October 2019 sales: 5.460 thousand

All sales data: SAAR

Source: https://fred.stlouisfed.org/series/EXHOSLUSM495S; 11/21/19

Existing

SalesMedian

Price

Mean

PriceMonth's

Supply

October 5,460,000 $270,900 $307,800 3.9

September 5,360,000 $271,500 $307,500 4.1

2018 5,220,000 $255,100 $293,900 4.3

M/M change 1.9% -0.2% 0.1% -4.9%

Y/Y change 4.6% 6.2% 4.7% -9.3%

Return TOC

Existing House Sales

All sales data: SAAR.

Existing SF

Sales

SF Median

Price

SF Mean

Price

October 4,870,000 273,600 309,500

September 4,770,000 274,400 309,400

2018 4,620,000 257,700 295,300

M/M change 2.1% -0.2% 0.0%

Y/Y change 5.4% 6.2% 4.8%


Return TOC

Existing House Sales


* Percentage of existing sales.


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Total U.S. U.S. SF NE MW S W

SAAR; in thousands

Total NE 690,000 12.6%

Total MW 1,290,000 23.6%

Total S 2,350,000 43.0%

Total W 1,130,000 20.7%

Total Existing Sales*

Return TOC

Home Ownership Rate: 1965 to Q3 2019

The U.S. home ownership rate for the third quarter of 2019 was 64.8%, an increase of 0.3% from Q2 and

a 0.4% increase from Q3 2018.

Return to TOC

U.S. Home Ownership

Source: https://www.census.gov/housing/hvs/index.html; 10/29/19

63.0

69.0

64.8

59.0

60.0

61.0

62.0

63.0

64.0

65.0

66.0

67.0

68.0

69.0

70.0

Return TOC

Owner Occupied vs. Renter Occupied housing: 1965 to Q3 2019

Return to TOC

U.S. Home Ownership


122,735

79,492

43,243

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Total Occupied Units Owner Occupied Units Renter Occupied Units

SAAR; in thousands

Return TOC

Net Change Owner Occupied vs. Renter Occupied housing: 2000 to Q3 2019

Return to TOC

U.S. Home Ownership


-1,500

-1,000

-500

0

500

1,000

1,500

2,000

2,500

Owners (+/-) Renters (+/-)

SAAR; in thousands

Return TOC

Residential Electricity Customer Accounts: Q1 2008 to Q3 2019*

Return to TOC

U.S. House Ownership

Source: https://www.eia.gov/electricity/monthly/; 10/24/19

124,857

134,887

118,000,000

120,000,000

122,000,000

124,000,000

126,000,000

128,000,000

130,000,000

132,000,000

134,000,000

136,000,000

138,000,000

* Q3 is an estimate based on extrapolation of Q1 & Q2 2019 data.

Return TOC

Residential Electricity Customer Accounts, Total Housing & Total Occupied Units:

Q1 2008 to Q3 2019*

Return to TOC


Source: https://www.eia.gov/electricity/monthly/; 10/24/19 and https://www.census.gov/housing/hvs/index.html; 10/29/19

* Q3 residential electricity accounts is an estimate based on extrapolation of Q1 & Q2 2019 data.

124,857

134,887

110,824

122,735

129,386

139,785

100,000

105,000

110,000

115,000

120,000

125,000

130,000

135,000

140,000

145,000

Electricity: Residential Customers Accounts (Quarterly ) Total occupied housing units Total housing units

Return TOC

Residential Electricity Customer Accounts, Owner Occupied and Renter Occupied Housing:

Q1 2008 to Q3 2019*

Return to TOC


Source: https://www.eia.gov/electricity/monthly/; 10/24/19 and https://www.census.gov/housing/hvs/index.html; 10/29/19

* Q3 residential electricity accounts is an estimate based on extrapolation of Q1 & Q2 2019 data.

124,857

134,887

75,145

79,492

35,678

43,243

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Electricity: Residential Customer Accounts Owner occuupied housing units Renter occuupied housing units

SAAR; in thousands

Return TOC

House Price Index - 3Q 2019

U.S. House Prices Rise 1.1 Percent in Third Quarter;

Up 4.9 Percent from Last Year

“U.S. house prices rose in the third quarter of 2019, up 1.1 percent according to the Federal Housing

Finance Agency (FHFA) House Price Index (HPI). House prices rose 4.9 percent from the third quarter

of 2018 to the third quarter of 2019. FHFA's seasonally adjusted monthly index for September was up 0.6

percent from August.

• House prices have risen for 33 consecutive quarters across the United States.

• House prices rose in all 50 states and the District of Columbia between the third quarters of 2018 and

2019. The top five states in annual appreciation were: 1) Idaho 11.6 percent; 2) Maine 7.9 percent; 3)

Arizona 7.9 percent; 4) Utah 7.8 percent; and 5) Indiana 7.4 percent. The states showing the smallest

annual appreciation were: 1) Illinois 1.9 percent; 2) Connecticut 2.2 percent; 3) Maryland 2.4 percent;

4) South Dakota 2.7 percent; and 5) Iowa 3.2 percent.

• House prices rose in all 100 of the largest metropolitan areas in the U.S. over the last four quarters.

Annual price increases were greatest in Boise City, ID, where prices increased by 11.1 percent. Prices

were weakest in Camden, NJ (MSAD), where they increased 0.7 percent.

• Of the nine census divisions, the Mountain division experienced the strongest four quarter

appreciation, posting a 6.9 percent gain between the third quarters of 2018 and 2019 and a 1.8 percent

increase in the third quarter of 2019. Annual house price appreciation was weakest in the Middle

Atlantic division, where prices rose by 4.0 percent between the third quarters of 2018 and 2019.” –

Corinne Russell and Raffi Williams, FHFA

“House prices have risen every quarter for the last eight years. Relative to a year ago, market indices are

still trending upward for the nation as a whole as well as in every census division, state, and the top 100

metro areas. Price gains, though, are continuing to slow their upward pace in a few cities with large

housing markets.” – Dr. William Doerner, Supervisory Economist, FHFA

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U.S. Housing Prices

Source: https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/2019Q3_HPI.pdf; 11/26/19

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U.S. Housing Prices

Source: https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/2019Q3_HPI.pdf; 11/26/19

Source: FHFA

279.2


Cities In Sun Belt Region Lead In Annual Gains According To S&P CoreLogic Case-Shiller Index

“Data for August 2019 show that home prices continue to increase at a modest rate across the U.S. The

S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census

divisions, reported a 3.2% annual gain in September, up from 3.1% in the previous month. The 10-City

Composite annual increase came in at 1.5%, no change from the previous month. The 20-City Composite

posted a 2.1% year-over-year gain, up from 2.0% in the previous month.

Phoenix, Charlotte and Tampa reported the highest year-over-year gains among the 20 cities. In

September, Phoenix led the way with a 6.0% year-over-year price increase, followed by Charlotte with a

4.6% increase and Tampa with a 4.5% increase. Ten of the 20 cities reported greater price increases in

the year ending September 2019 versus the year ending August 2019.

Before seasonal adjustment, the National Index posted a month-over-month increase of 0.1% in

September. The 10-City Composite did not post any gains and the 20-City Composite posted a 0.1%

increase for the month. After seasonal adjustment, the National Index recorded a 0.4% month-over-month

increase in September. The 10-City Composite posted a 0.2% increase and the 20-City Composite posted

a 0.4% increase. In September, 12 of 20 cities reported increases before seasonal adjustment while 17 of

20 cities reported increases after seasonal adjustment.

September’s report for the U.S. housing market is reassuring. The national composite index rose

3.2% relative to year-ago levels, with smaller increases in our 10- and 20-city composites. Of the

20 cities in the composite, only one (San Francisco) saw a year-over-year price decline in

September. After a long period of decelerating price increases, it’s notable that in September both

the national and 20-city composite indices rose at a higher rate than in August, while the 10-city

index’s September rise matched its August performance. It is, of course, too soon to say whether

this month marks an end to the deceleration or is merely a pause in the longer-term trend. At a

regional level, Phoenix retains the top spot for the fourth consecutive month with September’s

6.0% year-over-year gain. The Southeast region was also strong, as Charlotte, Tampa, and Atlanta

all rose at greater than a 4.0% clip.” – Craig J. Lazzara, Managing Director and Global Head of

Index Investment Strategy, S&P Dow Jones Indices

U.S. Housing Prices

Source: https://us.spindices.com; 11/26/19


S&P/Case-Shiller Home Price Indices

230.9

212.2

218.1

0

50

100

150

200

250

20-City Composite 10-City Composite U.S. National Home Price Index

Source: https://us.spindices.com; 11/26/19

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First-Time House Buyers

Urban Institute

“In August 2019, the FTHB share for FHA, which has always been more focused on first

time home buyers, fell very slightly to 82.3 percent. The FTHB share of VA lending also fell

slightly in August, to 52.4 percent. The GSE FTHB share in July was 45.7 percent. …based

on mortgages originated in July 2019, the average FTHB was more likely than an average

repeat buyer to take out a smaller loan, have a lower credit score, and higher LTV and higher

DTI, thus paying a higher interest rate” – Bing Lai, Research Associate, Housing Finance

Policy Center

Sources: https://www.urban.org/research/publication/housing-finance-glance-monthly-chartbook-november-2019/view/full_report; 12/4/19

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AEI Housing Center

Slight Credit Tightening Continues

“The Composite NMRI for purchase loans declined 0.3% year-over-year (yoy). For FHA,

the index is also declining at a rate of 0.3% (yoy), and it is down substantially from a

year ago. Interestingly, credit tightened for first-time buyers but remained unchanged for

repeat buyers, in a significant trend reversal. Credit has slightly tightened for the last 3

months. Time will tell whether this trend continues.” – Edward Pinto and Tobias Peter, AEI

Housing Center

Sources: https://hello.aei.org/rs/475-PBQ-971/images/HMI-Briefing-presentation-11-25-19-FINAL.pdf; 11/25/19

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AEI Housing Center

Agency First-time Buyer (FTB) Loan Share

“Because of faster growth in repeat buyer volume, the Agency FTB loans share has declined

to 56.8% in August 2019. This is down from 58.0% in August 2018 and represents a

significant trend reversal from the last 5 years, during which the FTB share continuously

marched up.” – Edward Pinto and Tobias Peter, AEI Housing Center


Note: Data are for primary owner-occupied agency purchase loans.

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Housing Affordability

Urban Institute

“Home prices remain affordable by historic standards, despite price increases over the last 7

years, as interest rates remain relatively low in an historic context. As of October 2019, with

a 20 percent down payment, the share of median income needed for the monthly mortgage

payment stood at 22.7 percent; with 3.5 down, it is 26.0 percent. Since February, the median

housing expenses to income ratio has been slightly lower than the 2001-2003 average.” –

Laurie Goodman, VP, Housing Finance Policy Center

National Housing Affordability Over Time

Sources: https://www.urban.org/research/publication/housing-finance-glance-monthly-chartbook-november-2019/view/full_report; 12/4/19

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Housing Affordability

AEI Housing Center

National House Price Appreciation (HPA) by Price Tier

“In October 2019, overheating of the low price tier continued (right panel). HPA in the low

price tier was 5.2% year-over-year (yoy). In both the low-medium and medium-high tiers,

HPA was 4.0% and 4.1%, respectively. HPA in the high tier (about 7% of the market) was a

more modest 2.5%.” – Edward Pinto and Tobias Peter, AEI Housing Center

Note: Data for October 2019 are preliminary. Price tiers are set at the metro level and are defined as follows: Low: all sales at or below

the 40th percentile of FHA sales prices; Low-Medium: all sales at or below the 80th percentile of FHA sales prices; Medium-High: all sales at or below the 125% of the GSE loan limit; and High: all other sales. HPAs are smoothed around the times of FHFA loan limit

changes. From last month’s release, we have changed our HPA methodology to better deal with outliers. This change has prima rily

affected the high price tier.


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Mortgage Credit Availability

Source: https://www.mba.org/2019-press-releases/november/mortgage-credit-availability-increased-in-november; 12/5/19

Mortgage Credit Availability Increased in November

“Mortgage credit availability increased in November according to the Mortgage Credit

Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA) which

analyzes data from Ellie Mae's AllRegs® Market Clarity® business information tool.

The MCAI rose by 2.1 percent to 188.9 in November. A decline in the MCAI indicates that

lending standards are tightening, while increases in the index are indicative of loosening

credit. The index was benchmarked to 100 in March 2012. The Conventional MCAI

increased 1.4 percent, while the Government MCAI increased by 2.9 percent. Of the

component indices of the Conventional MCAI, the Jumbo MCAI increased by 2.2 percent,

and the Conforming MCAI rose by 0.2 percent.

Credit availability rose for the third straight month in November, with an increase in supply

across all loan types. Most notably, the jumbo index climbed to yet another record high, as

investors increased their willingness to purchase loans with lower credit scores and higher

LTV ratios. Additionally, the government index saw its first increase in nine months, driven

by streamline refinance programs. Expanding credit availability will continue to support

active levels in mortgage lending, even as refinance activity starts to level off.” – Joel Kan,

Associate Vice President of Economic and Industry Forecasting, MBA

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Mortgage Credit Availability

Source: Mortgage Bankers Association; Powered by Ellie Mae's AllRegs® Market Clarity®

Source: https://www.mba.org/2019-press-releases/november/mortgage-credit-availability-increased-in-november; 12/5/19

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Summary In conclusion:

In October, the vast majority of the United States housing construction and sales markets were

positive – month-over-month and year-over-year. The exceptions were the yearly single-family

under construction and spending data categories. New single-family house sales and private

residential construction spending recorded monthly declines.

Housing, in the majority of categories, remains substantially less than their respective historical

averages. The new SF housing construction sector is where the majority of value-added forest

products are utilized and this housing sector has ample room for improvement.

Pros: 1) Historically low interest rates are still in place;

2) Select builders are beginning to focus on entry-level houses.

Cons:

1) Housing affordability indicates improvement;

2) Lot availability and building regulations (according to several sources);

3) Laborer shortages;

4) Household formations still lag historical averages;

5) Changing attitudes towards SF ownership;

6) Job creation is improving and consistent but some economists question the quantity

and types of jobs being created;

7) Debt: Corporate, personal, government – United States and globally;

8) Other global uncertainties.

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