Decline in Single-Family Permits in June 2022

2022-08-12T10:17:35-05:00

Over the first six months of 2022, the total number of single-family permits issued year-to-date (YTD) nationwide reached 567,798. On a year-over-year (YoY) basis, this is a 3.6% decline over the June 2021 level of 589,146. Year-to-date ending in June, single-family permits declined in all four regions. The South posted a small decline 0.8% while the Northeast region reported the steepest decline of 11.5%. The Midwest declined by 11.2% and the Western region reported a 4.6% decline in single-family permits during this time. Multifamily permits posted increases in all four regions. Permits were 32.3% higher in the Midwest, 22.9% higher in the South, 17.3% higher in the West, and 6.6% higher in the Northeast. Between June 2021 YTD and June 2022 YTD, 11 states saw growth in single-family permits issued. New Mexico recorded the highest growth rate during this time at 38.9% going from 3,061 permits to 4,252. Thirty-nine states and the District of Columbia reported a decline in single-family permits during this time with the District of Columbia posting the steepest decline of 22.7% going from 216 permits to 167. The ten states issuing the highest number of single-family permits combined accounted for 64.2% of the total single-family permits issued. Year-to-date, ending in June 2022, the total number of multifamily permits issued nationwide reached 331,934. This is 20.1% ahead over the June 2021 level of 276,433. Between June 2021 YTD and June 2022 YTD, 36 states and the District of Columbia recorded growth while 14 states recorded a decline in multifamily permits. Georgia led the way with a sharp rise (158.1%) in multifamily permits from 4,296 to 11,088 while Delaware had the largest decline of 74.5% from 667 to 170. The ten states issuing the highest number of multifamily permits combined accounted for 63.4% of the multifamily permits issued. At the local level, below are top ten metro areas that issued the highest number of single-family permits. For multifamily permits, below are the top ten local areas that issued the highest number of permits: Related ‹ Credit for Builders Less Available, Costs MoreTags: home building, multifamily, single-family, state and local markets, state permits

Decline in Single-Family Permits in June 20222022-08-12T10:17:35-05:00

Single-Family Homes Started in 2021

2022-08-09T09:21:22-05:00

According to NAHB analysis of the Survey of Construction (SOC), new single-family starts expanded at a fast pace in 2021. Nationally, 1,133,145 new single-family units were started in 2021, 14% higher than the units started in 2020. It marked the fastest growth rate since 2013 and the highest count of starts since the Great Recession. Among all the nine Census divisions, the South Atlantic, West South Central and Mountain Divisions led the way with the most new single-family units started in 2021. These three divisions represent 20 states and Washington, D.C., approximately 41% of United States, while the number of new single-family housing starts in these three divisions accounted for more than two thirds of the total new single-family housing starts in 2021. In addition, single-family units started in the Pacific Division increased to 106,240 in 2021, exceeding 100,000 for the second straight year since the 2008 recession. There were 93,693 new single-family units started in the East North Central Division in 2021. While the Pacific Division accounted for 9% of the total new single-family housing starts, the East North Central Division accounted for 8%. The other four divisions, including East South Central, West North Central, Middle Atlantic and New England, accounted for the remaining 16% of the total new single-family housing starts. In 2021, four out of the nine divisions grew faster than the national level of 14%. The Middle Atlantic Division led the way with a 26% increase, followed by the East South Central Division with a 23% increase and the West South Central Division with a 19% increase. The growth rates of the other five divisions were close to or below the national level. Compared to last year, five out of the nine divisions, including Middle Atlantic, East South Central, West South Central, South Atlantic, and West North Central, had an acceleration in 2021. Meanwhile, the Mountain, East North Central, Pacific, and New England Divisions experienced a deceleration in growth in 2021.  Noticeably, the Middle Atlantic Division grew by 26% in 2021, following a decrease of 9% in 2020. Related ‹ June Job Openings and Monetary Policy ConsiderationsTags: annual growth rate, housing starts, nine divisions, single-family

Single-Family Homes Started in 20212022-08-09T09:21:22-05:00

Job Gains Soar in July Amid Recession Fears

2022-08-05T11:15:15-05:00

Job growth accelerated in July amid higher inflation and growing economic pressures. Total nonfarm payroll employment increased by 528,000, and the unemployment rate edged down to 3.5% in July. Construction industry employment (both residential and non-residential) totaled 7.7 million and has exceeded its February 2020 level. In July, residential construction gained 14,100 jobs, and non-residential construction added 18,300 jobs. Residential construction employment currently exceeds its level in February 2020, while 83% of non-residential construction jobs lost in March and April have now been recovered. Total nonfarm payroll employment increased by 528,000 in July, following a gain of 398,000 in June, as reported in the Employment Situation Summary.  It marks the largest gain since February 2022. The estimates for the previous two months were revised up. The May estimate was revised up by 2,000 from +384,000 to +386,000, while the June increase was revised up by 26,000. With these revisions, employment in May and June together was revised up by 28,000 from the previously reported ones. In the first seven months of 2022, more than 3.3 million jobs were created, and monthly employment growth averaged 471,000 per month. As of July 2022, total nonfarm employment is back to pre-pandemic level in February 2020, meaning U.S. labor market is fully recovered from the COVID-19 pandemic. Meanwhile, the unemployment rate edged down to 3.5% in July from 3.6% in June, returning to the level in February 2020. The labor force participation rate, the proportion of the population either looking for a job or already with a job, ticked down 0.1 percentage point to 62.1% in July. Additionally, according to the Household Survey supplemental data, which come from questions added to the Current Population Survey (CPS) since May 2020, 7.1% of employed persons teleworked or worked at home in the last 4 weeks specifically because of the coronavirus pandemic in July, unchanged from the previous month. In May 2020, 35.4% of employed persons teleworked because of the coronavirus pandemic. Job growth in July was broad-based across sectors, led by gains in leisure and hospitality (+96,000), professional and business services (+89,000), and health care (+70,000). Employment in the overall construction sector increased by 32,000 in July, following a 16,000 gain in June. Residential construction gained 14,100 jobs, while non-residential construction employment gained 18,300 jobs in July. Residential construction employment now stands at 3.2 million in July, broken down as 902,000 builders and 2.3 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 11,900 a month. Over the last 12 months, home builders and remodelers added 120,800 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,186,500 positions. In July, the unemployment rate for construction workers rose by 0.4 percentage points to 3.9% on a seasonally adjusted basis. The unemployment rate for construction workers has been trending lower, after reaching 14.2% in April 2020, due to the housing demand impact of the COVID-19 pandemic. Related ‹ Headship Stabilizes During the Pandemic Housing BoomTags: employment, labor force, labor force participation rate, residential construction employment

Job Gains Soar in July Amid Recession Fears2022-08-05T11:15:15-05:00

The Second Quarter of Negative Growth: A Recession?

2022-07-28T11:16:27-05:00

The U.S. economy definitively slowed in the first half of 2022 as the Federal Reserve tightened financial conditions. Real GDP fell for the second straight quarter, while the Fed raised interest rates by 75 basis points for the second consecutive month to reduce inflation pressure. Despite these negative elements, the job market remained solid amid inflation concerns and growing recession fears. However, while an “official” recession will be called by the NBER, a housing downturn is clearly underway. The NBER definition of a recession requires a broad range of economic variables to show declines, including economic growth and labor market conditions. Such a call if often made quarters after the recession has begun. Nonetheless, during the second quarter of 2022 the housing component of GDP exerted the largest drag on headline GDP growth, excepting the second quarter of 2020, since the third quarter of 2010. According to the “advance” estimate  released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) decreased at an annual rate of 0.9% in the second quarter, following a 1.6% decrease in the first quarter of 2022. It is the second consecutive quarter of negative growth. This quarter’s decrease reflected decreases in private inventory investment, residential fixed investment, federal government spending, and state and local government spending, partially offset by increases in exports and personal consumption expenditures (PCE). In the second quarter, private inventory investment declined by $107 billion, subtracting 2.0 percentage points from GDP growth. Both nonresidential fixed investment (-0.1%) and residential fixed investment (RFI) (-14.0%) dropped in the second quarter. The decrease in nonresidential fixed investment reflected decreases in structures and equipment, which were mostly offset by an increase in intellectual property products (+9.2%). Within residential fixed investment, single-family structures declined 4.2% at an annual rate, multifamily structures declined 5.6% and other structures (specifically brokers’ commissions) decreased 22.2%. Meanwhile, federal government spending decreased 3.2% in the second quarter, reflecting a decrease in nondefense spending on consumption expenditures, while state and local government spending declined 1.2%, led by a decrease in investment in structures. Imports, which are a subtraction in the calculation of GDP, increased due to an increase in services (+21.2%). Consumer spending rose at an annual rate of 1.0% in the second quarter, compared to a 1.8% increase in the first quarter. Expenditures on services increased 4.1% at an annual rate, while goods spending decreased 4.4% at an annual rate, led by food and beverages (-11.7%). Net exports rose by $70 billion in the second quarter, contributing 1.4 percentage points to GDP growth. Related ‹ Federal Reserve Raises by 75 Basis Points and Notes Slowing EconomyTags: economics, gdp, macroeconomics, macroeconomy, residential fixed investment

The Second Quarter of Negative Growth: A Recession?2022-07-28T11:16:27-05:00

Employment Situation in June: State-Level Analysis

2022-07-25T10:26:05-05:00

Nonfarm payroll employment increased in 38 states in June compared to the previous month while 11 states and the District of Columbia lost jobs. Rhode Island reported no change. According to the Bureau of Labor Statistics, nationwide total nonfarm payroll employment increased by 372,000 in June, following a gain of 384,000 jobs in May. On a month-over-month basis, employment data was strong in Texas, which added 82,500 jobs, followed by Tennessee (+32,300), and Florida (+30,600). Eleven states and the District of Columbia lost a total of 44,600 jobs.  In percentage terms, employment in Tennessee increased by 1.0% while West Virginia reported a 1.0% decline between May and June. Year-over-year ending in June, 6.3 million jobs have been recovered, marking the economic rebound from the COVID-19 pandemic induced recession. All the states and District of Columbia added jobs compared to a year ago. The range of job gains spanned 850,600 jobs in California to 5,600 jobs added in Vermont. In percentage terms, Nevada reported the highest increase by 6.6%, while Kansas increased by 1.5% compared to a year ago. Across the 48 states which reported construction sector jobs data—which includes both residential as well as non-residential construction— 25 states reported an increase in June compared to May, while 22 lost construction sector jobs. West Virginia reported no change. Pennsylvania added 4,400 construction jobs while California lost 6,100 jobs. Overall, the construction industry added a net 13,000 jobs in June compared to the previous month. In percentage terms, Oregon increased by 2.4% while Connecticut reported a decline of 2.9% between May and June. Year-over-year, construction sector jobs in the U.S. increased by 292,000, which is a 4.0% increase compared to the June 2021 level. Texas added 50,100 jobs, which was the largest gain of any state, while Kentucky lost 2,200 construction sector jobs. In percentage terms, New Mexico had the highest annual growth rate in the construction sector by 14.0%. Over this period, Kentucky reported a decline of 2.8%. Related ‹ The Share of Wood-Framed Homes Increased in 2021Housing Demand Flattens as 1st-Time Buyers Retreat ›Tags: construction labor, economics, state and local markets, state employment

Employment Situation in June: State-Level Analysis2022-07-25T10:26:05-05:00

The Share of Wood-Framed Homes Increased in 2021

2022-07-22T08:18:17-05:00

By Jing Fu on July 22, 2022 • Lumber prices have been on a roller-coaster ride over the past two years and reached to an all-time high price of $1,515 per thousand board feed in the week ending May 21, 2021, as reported by Random Lengths. However, despite higher lumber prices and ongoing supply-chain issues, wood framing remains the most dominant construction method for single-family homes in the U.S. per the 2021 data. According to NAHB analysis of 2021 Census Bureau data, for 2021 completions, 92% of new homes were wood-framed, another 7% were concrete-framed homes, and less than half a percent was steel-framed. On a count basis, there were 895,000 wood-framed homes completed in 2021. This was an 8% gain over the 2020 total. As noted above, steel-framed homes are relatively uncommon, with a total of just 3,000 housing completions in 2021, which was 40% less than the 2019 completions sum of 5,000. Concrete-framed homes experienced the second straight decline in 2021, after a 13% decrease in 2020. In 2021, the total decreased 5% from 75,000 completions in 2020 to 71,000. However, the gains over the last 10 years are striking. From 2011 to 2021, the concrete-framed market share increased from 4% to 7%. Non-wood based framing methods are primarily concentrated in the South due to residential resiliency requirements. In 2021, concrete-framed homes made up 13% of all homes completed in the South. Approximately two-thirds of steel framed homes completed in 2021 were located in the South, with another one-third in the West. Related ‹ Home Building Construction Times Slow in 2021Tags: economics, framing, home building, housing, single-family

The Share of Wood-Framed Homes Increased in 20212022-07-22T08:18:17-05:00

Slowdown in Single-Family Permits in May 2022

2022-07-15T09:19:53-05:00

Over the first five months of 2022, the total number of single-family permits issued year-to-date (YTD) nationwide reached 473,997. On a year-over-year (YoY) basis, this is a 2.0% decline over the May 2021 level of 483,878. Year-to-date ending in May, single-family permits declined in three out of the four regions. The South posted a moderate increase of 1.0% while the Northeast region reported the steepest decline of 11.7%. The Midwest declined by 11.2% and the Western region reported a 2.2% decline in single-family permits during this time. Multifamily permits posted increases in all four regions. Permits were 39.3% higher in the Midwest, 20.2% higher in the South, 10.9% higher in the West, and 1.8% higher in the Northeast. Between May 2021 YTD and May 2022 YTD, 12 states saw growth in single-family permits issued. New Mexico recorded the highest growth rate during this time at 42.2% going from 2,502 permits to 3,558. Thirty-eight states and the District of Columbia reported a decline in single-family permits during this time with the District of Columbia posting the steepest decline of 25.5% going from 208 permits to 155. The ten states issuing the highest number of single-family permits combined accounted for 64.4% of the total single-family permits issued. Year-to-date, ending in May 2022, the total number of multifamily permits issued nationwide reached 265,751. This is 17.3% ahead over the May 2021 level of 226,634. Between May 2021 YTD and May 2022 YTD, 33 states recorded growth while 17 states and the District of Columbia recorded a decline in multifamily permits. Indiana led the way with a sharp rise (274.6%) in multifamily permits from 1,134 to 4,248 while Delaware had the largest decline of 81.4% from 649 to 121. The ten states issuing the highest number of multifamily permits combined accounted for 62.6% of the multifamily permits issued. At the local level, below are top ten metro areas that issued the highest number of single-family permits. For multifamily permits, below are the top ten local areas that issued the highest number of permits:   Related ‹ Since Pandemic Onset, Lumber Products Have Added $14K to House Price, $51 to RentTags: home building, multifamily, single-family, state and local markets, state permits

Slowdown in Single-Family Permits in May 20222022-07-15T09:19:53-05:00

Residential Building Worker Wages Continue to Rise Amid Uncertainty

2022-07-11T15:17:27-05:00

By Jing Fu on July 11, 2022 • Average hourly earnings for residential building workers* continue to rise in May as the construction labor market remains tight, meanwhile the growth rate is trending down given tightening financial conditions and increased economic uncertainty. According to the Bureau of Labor Statistics (BLS) report, average hourly earnings (AHE) for residential building workers were $29.18 in May 2022, increasing 5% from $27.79 a year ago. This was 17.0% higher than the manufacturing’s average hourly earnings of $24.95, 11.5% higher than transportation and warehousing’s, and 9.7% lower than mining and logging’s. Construction job openings was little changed in May with 434,000 jobs, the highest measure in the history of the data series. As skilled labor shortage persists, rising wages may be one of the effective ways to attract employees to fill empty positions. Average hourly earnings for residential building workers have increased significantly since the COVID-19 pandemic recession. Between December 2019 and December 2021, residential building workers’ average hourly earnings increased about 12%. Note: * Data used in this blog relate to production and nonsupervisory workers in the residential building industry. This group accounts for approximately two-third of the total employment on residential building industry. Related ‹ Solid Job Gains in JuneTags: average hourly earnings, labor market, residential building, wages

Residential Building Worker Wages Continue to Rise Amid Uncertainty2022-07-11T15:17:27-05:00

Solid Job Gains in June

2022-07-09T14:30:06-05:00

Despite interest rate hikes, job growth remained solid in June. Total nonfarm payroll employment increased by 372,000 and the unemployment rate remained at 3.6% in June. Construction industry employment (both residential and non-residential) totaled 7.7 million and has exceeded its February 2020 level. In June, residential construction lost 4,100 jobs, and non-residential construction added 16,500 jobs. Residential construction employment currently exceeds its level in February 2020, while 79% of non-residential construction jobs lost in March and April have now been recovered. In June, total nonfarm payroll employment increased by 372,000, following a gain of 384,000 in May, as reported in the Employment Situation Summary.  The estimates for the previous two months were revised down, suggesting modestly softening in labor market. The April estimate was revised down by 68,000 from +436,000 to +368,000, while the May increase was revised down by 6,000 to +384,000. With these revisions, employment in April and May together were revised down by 74,000 from the previously reported ones. In the first half of 2022, more than 2.7 million jobs were created, and monthly employment growth averaged 457,000 per month. As of June 2022, total nonfarm employment is 524,000 lower than its pre-pandemic level in February 2020, almost fully recovered from the COVID-19 pandemic. Meanwhile, the unemployment rate remained at 3.6% for the fourth straight month. It was 11.1 percentage points lower than its recent high of 14.7% in April 2020 and 0.1 percentage point higher than the rate in February 2020. The labor force participation rate, the proportion of the population either looking for a job or already with a job, ticked down 0.1 percentage point to 62.2% in June. The decline in the participation rate was led by Black and Asian workers, while the labor force participation rate for White workers remained the same. The labor force participation rate for people who aged between 25 and 54 decreased 0.3 percentage points to 82.3% in June. Additionally, according to the Household Survey supplemental data, which come from questions added to the Current Population Survey (CPS) since May 2020, 7.1% of employed persons teleworked or worked at home in the last 4 weeks specifically because of the coronavirus pandemic in June, down from 7.4% in the previous month. The share of the employed who teleworked has declined for the past five months. Two years ago, in May 2020, 35.4% of employed persons teleworked because of the coronavirus pandemic. Professional and business services (+74,000), leisure and hospitality (+67,000), and health care (+57,000) had notable job gains in June. Employment in the overall construction sector increased by 13,000 in June, following a 34,000 gain in May. Residential construction lost 4,100 jobs, while non-residential construction employment gained 16,500 jobs in June. Residential construction employment now stands at 3.2 million in June, broken down as 899,000 builders and 2.3 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 9,467 a month. Over the last 12 months, home builders and remodelers added 121,400 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,171,700 positions. In June, the unemployment rate for construction workers declined by 0.5 percentage points to 3.6% on a seasonally adjusted basis. It marks the lowest rate since May 2019. The unemployment rate for construction workers has been trending lower, after reaching 14.2% in April 2020, due to the housing demand impact of the COVID-19 pandemic. Related ‹ Slightly Longer Time to Build Apartments in 2021Tags: employment, labor force, labor force participation rate, residential construction employment

Solid Job Gains in June2022-07-09T14:30:06-05:00

U.S. Added 390,000 jobs in May

2022-06-03T10:20:03-05:00

In May, total nonfarm payroll employment increased by 390,000 and the unemployment rate was unchanged at 3.6%. Solid job gains continued in May, despite surging inflation, persistent supply-chain issues, and fears of a possible recession. Construction industry employment (both residential and non-residential) totaled 7.7 million and has exceeded its February 2020 level. Residential construction gained 16,700 jobs, and non-residential construction added 19,400 jobs in May. Residential construction employment currently exceeds its level in February 2020, while 78% of non-residential construction jobs lost in March and April have now been recovered. Total nonfarm payroll employment increased by 390,000 in May, following a gain of 436,000 in April, as reported in the Employment Situation Summary. The March estimate was revised down by 30,000 from +428,000 to +398,000, while the April increase was revised up by 8,000 to +436,000. With these revisions, employment in March and April together were revised down by 22,000 from the previously reported ones. In the first five months of 2022, more than 2.4 million jobs were created, and monthly employment growth averaged 488,000 per month. As of May 2022, total nonfarm employment is 822,000 lower than its pre-pandemic level in February 2020, almost fully recovered from the COVID-19 pandemic. Meanwhile, the unemployment rate was unchanged, at 3.6% in May. It was 11.1 percentage points lower than its recent high of 14.7% in April 2020 and 0.1 percentage point higher than the rate in February 2020. The labor force participation rate, the proportion of the population either looking for a job or already with a job, increased 0.1 percentage points to 62.3% in May. The number of persons unemployed was little changed, while the number of persons employed increased by 321,000. The labor force participation rate for people who aged between 25 and 54 increased to 82.6% in May. Additionally, according to the Household Survey supplemental data, which come from questions added to the Current Population Survey (CPS) since May 2020, 7.4% of employed persons teleworked or worked at home in the last 4 weeks specifically because of the coronavirus pandemic in May, down from 7.7% in the previous month. The share of the employed who teleworked has declined for the past four months. Two years ago, in May 2020, 35.4% of employed persons teleworked because of the coronavirus pandemic. In May, employment in leisure and hospitality, professional and business services, and transportation and warehousing increased, while employment in retail trade declined by 61,000 over the month, mainly reflecting losses in general merchandise stores (-33,000), clothing and clothing accessories stores (-9,000), food and beverage stores (-8,000), and building material and garden supply stores (-7,000). Employment in the overall construction sector increased by 36,000 in May, following no change in April. Residential construction added 16,700 jobs, and non-residential construction employment rose by 19,400 in May. Residential construction employment now stands at 3.2 million in April, broken down as 903,000 builders and 2.3 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 12,583 a month. Over the last 12 months, home builders and remodelers added 128,000 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,175,000 positions. In May, the unemployment rate for construction workers rose by 0.2 percentage points to 4.1% on a seasonally adjusted basis. The unemployment rate for construction workers has been trending lower, after reaching 14.2% in April 2020, due to the housing demand impact of the COVID-19 pandemic. Related ‹ Apartment Absorption Increased while Completions FellTags: employment, labor force, labor force participation rate, residential construction employment

U.S. Added 390,000 jobs in May2022-06-03T10:20:03-05:00

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