Patios Continue to Crowd Out Decks on New Homes

2024-10-08T08:18:35-05:00

While the share of new homes with patios continues to climb, the share with decks has hovered at a historic low of under 18%, according to NAHB tabulation of data from the HUD/Census Bureau Survey of Construction (SOC). Every year from the re-design of the SOC in 2005 through 2018, over 22% of single-family homes started featured decks. After that, however, the share dropped significantly, reaching a low of 17.5% in 2021. Since then, the percentage has remained near that trough, at 17.7% in 2022 and 17.6% in 2023. Moreover, this has been occurring at the same time the share of new homes with patios was climbing to a record high 67.7%. In fact, the tendency of deck and patio percentages to move in opposite directions is evident throughout the 2005-2023 period. The correlation between the percentages over that span is -0.84, suggesting that patios on new homes have been functioning as a substitute for decks. When more new homes have patios, fewer have decks. New homes with both a deck and patio do occur but are comparatively rare. Among single-family homes started in 2023, fewer than 6% featured both a deck and a patio. Decks have been more common not only when but where patios are less common. For example, among single-family homes started in 2023, patios were least common (featured ion only 17% of the homes) in the New England Census Division, the same division where a high of 76% of the homes featured decks. At the other extreme, in the West South Central a divisional high 81% of new homes featured patios in 2023, and a divisional low of 3% featured decks. Across all nine divisions in 2023, the correlation between the percentages of new homes with decks and patios was -0.82. Nevertheless, decks remain relatively popular on new homes in some parts of the country. Following the 76% in New England at a distance, 42% of new homes featured decks in 2023 in both the Middle Atlantic and West North Central divisions. More detail on new home deck construction is available from the Annual Builder Practices Survey (BPS) conducted by Home Innovation Research Labs. Nationally, the 2024 BPS report (based on homes built in 2023) shows that the average size of a deck on a new single-family home is 284 square feet. Across Census divisions, the average size ranges from a low of 230 square feet in New England to a high of 382 square feet in the adjacent Middle Atlantic. On a square foot basis, the BPS shows an evolving geographic split in the material builders use most often in deck construction. In the West North Central, South Atlantic, East South Central and West South Central divisions, treated wood remains the top choice. In the New England, Middle Atlantic, East North Central and Mountain divisions, composite material has moved ahead of treated wood; while in the Pacific Division, concrete edged out composite for the top spot. The Pacific is also the only division where redwood (a species that can be used outdoors without special pressure treatment) is relatively common in new home deck construction. A previous post covered the characteristics of patios on single-family homes built in 2023. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Patios Continue to Crowd Out Decks on New Homes2024-10-08T08:18:35-05:00

Strong Job Market in September

2024-10-04T11:28:08-05:00

The September jobs report indicates that the U.S. labor market remains strong. Job growth accelerated, and the unemployment rate fell to a three-month low of 4.1%.  Meanwhile, job growth for the previous two months (July and August) was upwardly revised. In September, wage growth accelerated for the second straight month. Wages grew at a 4.0% year-over-year (YOY) growth rate in September, down 0.5 percentage points from a year ago. Wage growth is outpacing inflation, which typically occurs as productivity increases. National Employment Total nonfarm payroll employment increased by 254,000 in September, following an upwardly revised increase of 159,000 jobs in August, as reported in the Employment Situation Summary. It marks the largest monthly job gain in the past six months. The estimates for the previous two months were revised higher. The monthly change in total nonfarm payroll employment for July was revised up by 55,000, from +89,000 to +144,000, while the change for August was revised up by 17,000 from +142,000 to +159,000. Combined, the revisions were 72,000 higher than previously reported. In the first nine months of 2024, 1,801,000 jobs were created. Additionally, monthly employment growth averaged 200,000 per month, compared with the 251,000 monthly average gain for 2023. The Fed’s easing cycle began on September 18, marking the end of a period of restrictive monetary policy. The U.S. economy has created roughly 8 million jobs since March 2022, when the Fed enacted the first interest rate hike of this cycle. The unemployment rate fell slightly to 4.1% in September, from 4.2% in August. The September decrease in the unemployment rate reflected the decrease in the number of persons unemployed (-281,000) and the increase in the number of persons employed (+430,000). Meanwhile, the labor force participation rate—the proportion of the population either looking for a job or already holding a job—was 62.7% for the third consecutive month. However, for people aged between 25 and 54, the participation rate dipped slightly to 83.8%. This rate exceeds the pre-pandemic level of 83.1%. Meanwhile, the overall labor force participation rate is still below its pre-pandemic levels when it stood at 63.3% at the beginning of 2020. In September, employment continued to trend up in food services and drinking places (+69,000), health care (+45,000), government (+31,000), social assistance (+27,000), and construction (+25,000). Construction Employment Job gains in the overall construction sector continued in September, averaging 20,000 per month over the past 12 months. While residential construction gained 7,800 jobs, non-residential construction employment added 17,900 jobs for the month. Residential construction employment now stands at 3.4 million in September, broken down as 952,000 builders and 2.4 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 3,450 a month. Over the last 12 months, home builders and remodelers added 60,500 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,393,800 positions. In September, the unemployment rate for construction workers rose to 4.9% on a seasonally adjusted basis. The unemployment rate for construction workers has remained at a relatively lower level, after reaching 15.3% in April 2020 due to the housing demand impact of the COVID-19 pandemic. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Strong Job Market in September2024-10-04T11:28:08-05:00

Parking Garages for New Homes 2023

2024-10-04T09:20:25-05:00

In 2023, 66% of newly completed single-family homes featured two-car garages, according to NAHB’s analysis of the Census’s Survey of Construction data. This was the most common parking option across all Census divisions. By Census division, South Atlantic had the highest share of two-car garages at 72%. Three or more car garages were most popular in the West North Central division (38%), while one-car garages were most frequent in the Middle Atlantic division (22%).”Other” parking options, including carports and off-street parking, were most common in the East South Central division (17%). Nationwide, the share of new homes with three or more car garages was 17% in 2023. Three or more car garages have been trending downward since the peak of 24% in 2015, decreasing 2% from 2022.  One-car garages were present in 8% of new homes, another 2% possessed a carport, and 8% did not have any garage or carport. As home size increased, the share of homes with one-car garages or “other” parking options decreased. For homes under 1,200 square feet, “other” parking options were most common (72%). As home sizes go over 5,000 square feet, this share drops to just 2%. One-car garages were most common in homes between 1,200 and 1,599 square feet (18%), while only 1% of homes over 5,000 square feet had this feature. Two-car garages were most prevalent in homes between 1,600 and 1,999 square feet (72%), with the largest share at 81% for homes between 2,000 and 2,399 square feet. For homes between 2,400-2,999 square feet, the two-car garage share fell to 77%. Two-car garages were also the most popular options for homes 3,000-4,999 square feet as well with a smaller share at 58%. Three-car garages were rare in smaller homes (3% for those under 1,200 square feet) but became the most common option (65%) for homes over 5,000 square feet. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Parking Garages for New Homes 20232024-10-04T09:20:25-05:00

Private Residential Construction Spending Falls for Third Straight Month

2024-10-01T13:19:40-05:00

Private residential construction spending fell 0.3% in August, according to the Census Construction Spending data. Nevertheless, it remained 2.7% higher compared to a year ago. The monthly decline in total private construction spending for August was largely due to reduced spending on single-family and multifamily construction. Spending on single-family construction fell by 1.5% in August. This marks the fifth consecutive monthly decrease. The rising new single-family home inventory and expectations for lower interest rates both weight on new home building. Despite these challenges, spending on single-family construction was still 0.8% higher than it was a year earlier. Multifamily construction spending inched down 0.4% in August after a dip of 0.3% in July. Year-over-year, spending on multifamily construction declined 7.5%, as an elevated level of apartments under construction is being completed. Private residential improvement spending increased 1% in August and was 9.4% higher than a year ago. The NAHB construction spending index is shown in the graph below (the base is January 2000). The index illustrates how spending on single-family construction has slowed since early 2024 under the pressure of elevated interest rates. Multifamily construction spending growth has also slowed down after the peak in July 2023. Meanwhile, improvement spending has increased its pace since late 2023. Spending on private nonresidential construction was up 3.6% over a year ago. The annual private nonresidential spending increase was mainly due to higher spending for the class of manufacturing ($36.4 billion), followed by the power category ($8.8 billion). Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Private Residential Construction Spending Falls for Third Straight Month2024-10-01T13:19:40-05:00

Bedrooms in New Single-Family Homes in 2023

2024-09-23T09:22:18-05:00

In 2023, the most common number of bedrooms in newly-built single-family homes continued to be three at a 45.7% share.  This share is up almost three percentage points from 42.8% in 2022. The second highest share was single-family homes with four bedrooms at 33.1%, followed by homes with two bedrooms or less at 11.5% and then homes with five or more bedrooms at 9.7%. As shown above, the share of single-family homes started with three bedrooms rose to its highest level since 2019. While this share rose, the second most frequently built number of bedrooms (four) fell to 33.1%, the lowest share for such homes since 2012. At the same time, the share of new single-family homes with 2 bedrooms or less reached its highest level since 2012. The share of homes with five bedrooms or more has remained fairly stagnant at around 10% over the past ten years. Regions Across U.S. Census divisions, the share of new single-family homes with four or more bedrooms features distinct variations. The share ranged from a low of 22.0% in the New England division to the highest share of 47.9% in the West South Central division. Coinciding with the fall in the share of new single-family homes with 4 bedrooms or more nationally, there are no divisions that have a share above 50%. In 2022, the data featured the South Atlantic (51.7%), Pacific (51.4%) and West South Central (50.6%) all with above 50% shares. Purpose of Construction The number of bedrooms in the home greatly varied in 2023 depending on a new single-family home’s purpose of construction (built-for-sale, contractor-built, owner-built, built-for-rent). Most of this variation comes from the two-bedroom or less homes and four-bedrooms homes. For example, the share of new single-family homes with two bedrooms or less ranges from 5.7% of homes built-for-sale to 38.4% of homes built-for-rent. Meanwhile, three-bedroom homes and five or more bedroom homes display relatively little change across purpose of construction, as shown in the chart below.    Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Bedrooms in New Single-Family Homes in 20232024-09-23T09:22:18-05:00

Custom Home Building Share Declines in 2023

2024-09-20T09:32:18-05:00

In 2023, 18.8 percent of all new single-family homes started were custom homes. This share decreased from the 20.4 percent recorded in 2022, according to data tabulated from the Census Bureau’s Survey of Construction (SOC). The custom home market consists of contractor-built and owner-built homes—homes built one at a time for owner occupancy on the owner’s land, with either the owner or a builder acting as a general contractor. The alternatives are homes built-for-sale (on the builder’s land, often in subdivisions, with the intention of selling the house and land in one transaction) and homes built-for-rent.    In 2023, 71.5 percent of the single-family homes started were built-for-sale, and 9.7 percent were built-for-rent. At an 18.9 percent share, the number of custom homes started in 2023 was 177,850, falling from 207,472 in 2022.  The quarterly published statistics show that the custom home share of single-family starts showed gains in the second quarter of 2024 after some recent slowing. Although the quarterly statistics are timelier, they lack the geographic detail available in the annual data set. When analyzed across the 9 census divisions, the annual data show that the highest custom home share in 2023 was 35.5 percent in the East South-Central division. While the lowest share was in the West South-Central division, where the share was only 11.9 percent. The share of custom homes across U.S. divisions are showed in the map below. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Custom Home Building Share Declines in 20232024-09-20T09:32:18-05:00

Single-Family Permits Up in July 2024  

2024-09-16T09:16:59-05:00

Over the first seven months of 2024, the total number of single-family permits issued year-to-date (YTD) nationwide reached 599,308. On a year-over-year (YoY) basis, this is an increase of 13.7% over the July 2023 level of 527,158. Year-to-date ending in July, single-family permits were up in all four regions. The range of permit increases spanned 18.2% in the West to 9.8% in the Northeast. The Midwest was up by 14.5% and the South was up by 12.4% in single-family permits during this time. For multifamily permits, three out of the four regions posted declines. The Northeast, driven by New York was the only region to post an increase and was up by 32.0%. Meanwhile, the West posted a decline of 31.2%, the South declined by 22.7%, and the Midwest declined by 9.3%. Between July 2024 YTD and July 2023 YTD, 47 states and the District of Columbia posted an increase in single-family permits. The range of increases spanned 39.4% in Arizona to 2.1% in Rhode Island. New Hampshire (-0.2%), Hawaii (-2.7%), and Alaska (-10.4%) reported declines in single-family permits. The ten states issuing the highest number of single-family permits combined accounted for 64.0% of the total single-family permits issued. Texas, the state with the highest number of single-family permits, issued 97,551 permits over the first seven months of 2024, which is an increase of 15.6% compared to the same period last year. The succeeding highest state, Florida, was up by 9.5%, while the third highest, North Carolina, posted an increase of 11.8%. Year-to-date ending in July, the total number of multifamily permits issued nationwide reached 279,618. This is 17.2% below the July 2023 level of 337,730. Between July 2024 YTD and July 2023 YTD, 18 states recorded growth in multifamily permits, while 32 states and the District of Columbia recorded a decline. New York (+117.4%) led the way with a sharp rise in multifamily permits from 10,110 to 21,981, while the District of Columbia had the biggest decline of 68.7% from 1,969 to 616. The ten states issuing the highest number of multifamily permits combined accounted for 64.7% of the multifamily permits issued. Over the first seven months of 2024, Texas, the state with the highest number of multifamily permits issued, experienced a decline of 30.4%. Following closely, the second-highest state in multifamily permits, Florida, saw a decline of 24.4%. California, the third largest multifamily issuing state, decreased by 27.5%. At the local level, below are the 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. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Single-Family Permits Up in July 2024  2024-09-16T09:16:59-05:00

Apartment Construction Time Averaged 20 Months in 2023

2024-09-16T09:16:04-05:00

The average length of time to complete construction of a multifamily building after obtaining authorization was 19.9 months in 2023, according to the 2023 Survey of Construction (SOC) from the Census Bureau. The permit-to-completion time inched up 0.1 months in 2023, after an increase of 2.3 months in 2022, as the ongoing skilled labor shortage and supply chain issues were still challenging the industry. The average time to build multifamily homes varies with the number of units in the building. The more units, the more time required to build. In 2023, buildings with 20 or more units took the longest time,22 months, to build after obtaining authorization. Properties with 10-to-19 units required 21.5 months. However, 2-to-4 unit buildings came in at 18.7 months, which took longer time than 5-to-9 unit buildings (16.9 months). Compared to 2019, pre-pandemic, only buildings with 5 to 9 units took a similar time to complete. The construction process required 3.3 more months to complete multifamily buildings with 2-to-4 units, 2.8 months more for 10-to-19 unit buildings, and 3 months longer to finish for properties with 20 or more units. The 2023 SOC data also shows a significant regional variation in the average construction duration of multifamily buildings. The West had the longest time from authorization to completion at 20.9 months, followed by the Northeast at 20.8 months, and then the South with 19.5 months. The shortest permit-to-completion period happened in the Midwest with 17.3 months. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Apartment Construction Time Averaged 20 Months in 20232024-09-16T09:16:04-05:00

Market Share for Modular and Other Non-Site Built Housing in 2023

2024-09-12T09:14:48-05:00

The total market share of non-site built single-family homes (modular and panelized) was just 3% of single-family homes in 2023, according to completion data from the Census Bureau Survey of Construction data and NAHB analysis. This is a slight increase from the 2% share in 2022. This share has been steadily declining since the early-2000s despite the high-level of interest for non-site built construction. This low market share in fact runs counter to some media commentary on off-site construction suggesting recent gains. Nonetheless, there exists potential for market share gains in the years ahead due to the need to increase productivity in the residential construction sector. In 2023, there were 27,000 total single-family units built using modular (12,000) and panelized/pre-cut (15,000) construction methods, out of a total of 999,000 single-family homes completed. It is worth noting that the Census definitions of off-site construction are relatively narrow. In a separate survey, the Home Innovation Research Labs Survey of U.S. Home Builders has a higher share for panelized construction (5-12%) due to a wider definition of “panelized” construction. While the Census-measured market share is small, there exists potential for expansion. This 3% market share for 2023 represents a decline from years prior to the Great Recession. In 1998, 7% of single-family completions were modular (4%) or panelized (3%). This marked the largest share for the 1992-2023 period. One notable regional concentration is found in the Northeast and Midwest. These two regions tie for the highest market share of homes built using non-site build construction methods. In the Northeast, 5% (4,000 homes) of the region’s 61,000 housing units were completed using non-site built construction methods. At the same time, in the Midwest, 5% market share (6,000 homes) of the region’s 126,000 housing units were completed using non-site build construction methods. With respect to multifamily construction, approximately 7% of multifamily buildings (properties, not units) were built using modular and panelized methods, marking the highest level in the last two decades. This is significantly higher than the 2% share in 2022 and 1% share in 2018-2021. It is notable that modular construction methods accounted for 5% of this share, whereas in previous years it was only panelized construction methods that made up the small share of non-site build methods in multifamily construction.  Prior to last year, the highest levels of modular and panelized methods share in multifamily construction was in 2000 and 2011, where 5% of multifamily buildings were constructed with modular (1%) or panelized construction methods (4%). Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Market Share for Modular and Other Non-Site Built Housing in 20232024-09-12T09:14:48-05:00

Where are Laundry Rooms Located? 

2024-09-11T10:16:26-05:00

In 2023, the majority of homes started featured laundry connections on the first floor (72%), according to the Census’s Survey of Construction. Laundry located on the second floor or higher was the second most prevalent at 26%. The basement, garage, and other locations all had a 1% or lower share.   In NAHB’s What Home Buyer’s Really Want1, home buyers are surveyed on where they would like their laundry located. While the first floor remained the most desired location for laundry at 60%, preferences diverged significantly for other locations. The basement was the second most popular choice at 17%, followed by the garage at 15%, and only 7% for the second floor or higher.  This comparison highlights a disconnect between what builders are offering and what buyers are seeking. While builders are largely opting for laundry connections on the first or second floor, a notable portion of buyers prefer the basement or garage. This variance is shown in the chart below. There are also regional differences in where laundry is placed. The first floor was the most prevalent across every division but ranged from 91% in West South Central to 59% in the South Atlantic. Second-floor laundry was highest in the Pacific division at 43% but was lowest in the West South Central at 8%.   The West North Central had a 13% share of homes with the laundry room in the basement, the only division with a share above 5%; They are also the only division with most homes having a full or partial basement. No regions had over a 2% share of laundry located in the garage.  What Home Buyer’s Really Want breaks down buyer preferences further by age, household composition, race/ethnicity, buyer income, and more. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Where are Laundry Rooms Located? 2024-09-11T10:16:26-05:00
Close Sliding Bar Area

About My Work

Phasellus non ante ac dui sagittis volutpat. Curabitur a quam nisl. Nam est elit, congue et quam id, laoreet consequat erat. Aenean porta placerat efficitur. Vestibulum et dictum massa, ac finibus turpis.

Recent Works

Recent Posts