Job Gains Accelerate in October

2021-11-05T10:17:45-05:00

Job gains picked up in October after two consecutive months of a slowdown. Total payroll employment rose by 531,000 and the unemployment rate dropped to 4.6% in October. Construction industry employment (both residential and non-residential) totaled 7.5 million, with 44,000 construction jobs added in October. Both residential construction (+10,900) and non-residential construction (+33,000) had job gains for the month. Residential construction employment exceeds its level in February 2020, while 63% of nonresidential construction jobs lost in March and April have been recovered. Total nonfarm payroll employment increased by 531,000 in October, faster than the previous two months, as reported in the Employment Situation Summary. Job gains for August and September were revised upward. The August increase was revised up by 117,000, while the September increase was revised up by 118,000 from +194,000 to +312,000. Over 5.8 million jobs have been created during the first ten months of 2021 and monthly employment growth has averaged 582,000 per month. Total nonfarm employment in October 2021 is still 4.2 million lower than its pre-pandemic level in February 2020 level. Meanwhile, the unemployment rate declined by 0.2 percentage points to 4.6% in October, the lowest rate since the pandemic. It was 10.2 percentage points lower than its recent high of 14.8% in April 2020 and 1.1 percentage points higher than the rate in February 2020. The October decrease in the unemployment rate reflected a decrease in the number of persons unemployed (-255,000) and an increase in the number of persons employed (359,000). The labor force participation rate, the proportion of the population either looking for a job or already with a job, remained unchanged at 61.6% in October. Job gains in October were widespread. Leisure and hospitality, professional and business services, education and health services, manufacturing, transportation and warehousing, and construction all had notable job gains in October, while employments in local government education, and in state government education have declined for the second consecutive month. Employment in the overall construction sector rose by 44,000 in October. Over the month, residential construction added 10,900 jobs, and nonresidential construction employment rose by 33,000 jobs. Residential construction employment now stands at 3.1 million in October, broken down as 885,000 builders and 2.2 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 8,917 a month. Over the last 12 months, home builders and remodelers added 122,800 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,087,600 positions. In October, the unemployment rate for construction workers declined by 0.7 percentage points to 5.1% on a seasonally adjusted basis. The unemployment rate for construction workers has been trending lower, after reaching 14.1% in April 2020, due to the housing demand impact of the COVID-19 pandemic. Related ‹ Bidding Wars Jump as Top Reason Buyers Can’t Make PurchaseTags: COVID-19, employment, labor force, labor force participation rate, residential construction employment

Job Gains Accelerate in October2021-11-05T10:17:45-05:00

Job Gains Slow Sharply in September

2021-10-08T13:17:18-05:00

Job gains slowed for the second straight month amid the resurgence of COVID-19 cases. Total payroll employment rose by 194,000 in September and the unemployment rate dropped to 4.8%. For the coming months, job gains are expected to accelerate as COVID-19 cases began to subside. Despite the slowdown in total nonfarm payroll employment, aggregate construction industry (both residential and non-residential) added 22,000 jobs in September and totaled 7.4 million. Both residential construction (+3,400) and non-residential construction (+18,600) had job gains over the month. Currently, residential construction employment exceeds its level in February 2020, while only 56% of nonresidential construction jobs lost in March and April have been recovered. In September, total nonfarm payroll employment increased by 194,000, reported in the Employment Situation Summary. It is the smallest monthly gain in the past nine months of 2021. The previous two months’ gains were revised higher. The July increase was revised up by 38,000, while the August increase was revised up by 131,000 from 235,000 to 366,000. During the first nine months of 2021, 5.1 million jobs have been created and monthly employment growth has averaged 561,000 per month. Total nonfarm employment in September 2021 is still 5.0 million lower than its pre-pandemic level in February 2020 level. Meanwhile, the unemployment rate declined by 0.4 percentage points to 4.8% in September, the lowest rate since the pandemic. It was 10.0 percentage points lower than its recent high of 14.8% in April 2020 and 1.3 percentage points higher than the rate in February 2020. The September decrease in the unemployment rate reflected a decrease in the number of persons unemployed (-710,000) and a large increase in the number of persons employed (526,000). The labor force participation rate, the proportion of the population either looking for a job or already with a job, decreased 0.1 percentage points to 61.6% in September. Leisure and hospitality, professional and business services, retail trade, and transportation and warehousing had job gains in September, while employment in local government education declined by 144,000 and employment in state government education declined by 17,000 over the month. Employment in the overall construction sector rose by 22,000 in September. Over the month, residential construction added 3,400 jobs, and nonresidential construction employment rose by 18,600 jobs after five consecutive months of declines. Residential construction employment now stands at 3.1 million in September, broken down as 882,000 builders and 2.2 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 6,033 a month. Over the last 12 months, home builders and remodelers added 136,300 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,078,400 positions. In September, the unemployment rate for construction workers declined by 0.1 percentage points to 5.8% on a seasonally adjusted basis. The unemployment rate for construction workers has been trending lower, after reaching 14.1% in April 2020, due to the housing demand impact of the COVID-19 pandemic. Related ‹ Share of New Homes with Decks Drops Below 20 PercentTags: COVID-19, employment, labor force, labor force participation rate, non-residential construction employment, residential construction employment

Job Gains Slow Sharply in September2021-10-08T13:17:18-05:00

Share of New Homes With 4 or More Bedrooms Jumped in 2020

2021-09-29T11:21:47-05:00

The U.S. Census Bureau Survey of Construction’s (SOC) 2020 estimates of the shares of the number of bedrooms in new single-family homes showed a sharp upswing in the percentage of new homes started with 4 or more bedrooms, unlike in prior recent years. The most recent SOC data show the shares in the varying number of bedrooms in new homes whose construction began in 2020 (new homes started). Nationally, the share of single-family homes started with 4 bedrooms or more increased from 42.6 percent in 2019 to 45.2 percent in 2020. These developments are linked to changes in the makeup of homebuyers from the previous years. In 2020, the detrimental economic effects of the COVID-19 pandemic, a low-interest rate environment in the U.S., and low housing supply together drove prices up, leaving some prospective first-time homebuyers out of the market.  Successful buyers were generally looking for more space. Examination of housing finance data in the previous year, i.e., the Mortgage Bankers Association’s (MBA) Weekly Application Surveys in 2020, shows increases in the average loan size of all purchase mortgages despite low housing inventory, another sign that the market was challenging for prospective first-time homebuyers. The 2020 SOC reduced share of new homes started with 2 bedrooms or less (9.7 percent vs 10.5 percent the previous year) corroborates the lowered presence of first-time homebuyers in the new home market that year. Apart from the East North Central Census Division, the above chart shows no variation by geography in changes of the shares of new homes started in 2020 with 4 or more bedrooms. While the East North Central Census Division experienced a decline in this share from 2019 by 2.6 percent to 29.8 percent, the other divisions show only increases in the shares. Unsurprisingly, the 2020 survey, as in prior years, also shows that new homes started with lower square footage area had fewer bedrooms built. For example, in homes less than 1,200 square feet, 83 percent had two bedrooms or less and the remaining homes were all 3-bedrooms. Similarly, in the next tier of home size, 1,200 to 1,599 square feet, 31 percent of all new homes started had 2 bedrooms or less, 67 percent had three bedrooms, and the remaining percentage was taken by homes with 4 bedrooms. Finally, the SOC shows that homes built-for-rent are also less likely to have more bedrooms: 87% of single-family homes whose construction began in 2020 with the intent of ultimately renting (a niche market in and of itself) had 3 bedrooms or fewer. Related ‹ Consumer Confidence Falls to 7-month Low in SeptemberTags: bedrooms, built for rent, COVID-19, first-time buyers, mortgage bankers association, new homes, survey of construction

Share of New Homes With 4 or More Bedrooms Jumped in 20202021-09-29T11:21:47-05:00

Tracking the Geography of Home Building: Housing Affordability Metrics

2021-09-10T15:15:10-05:00

By Litic Murali on September 10, 2021 • Housing affordability has gained increased attention in recent quarters due growing home prices and rents. For the second quarter of 2021, NAHB’s Home Building Geography Index (HBGI) explored a geographic measure of housing affordability using Price-to-Income ratios of all counties in the United States1 to map the geography of single-family and multifamily construction. The principal findings of this new classification were that single-family residential construction expanded the most in middle affordability tiers, as compared to prior recent quarters, while multifamily residential construction posted higher growth rates in areas of greater affordability. For this analysis, the Price-to-Income ratio is the median value of all owner-occupied housing units in a county relative to that county’s median income. The above figure shows the geographic distribution of five affordability quintiles, based on the Price-to-Income measure. The top quintile, the most expensive, is situated along the East and West Coasts. The least expensive areas belong mostly to areas in the West North Central and West South Central Census Divisions. The findings show that since the beginning of the pandemic, growth rates in multifamily construction have been flat in the most expensive housing markets and stronger in more affordable areas. This is consistent with the general suburban shift for apartment construction. For the last two quarters (Q1 and Q2 2021), there was a correlation between submarkets of lower housing affordability and lower multifamily growth. In the second quarter of 2021, in the most affordable regions of the country, multifamily construction posted a 48.3% year-over-year gain. Single-family construction, by contrast and as seen in the figure above, expanded the most in the middle three quintiles, posting growth rates ranging from 31.5% to 34.7% in Q2 2021. The trend of the middle affordability tiers seeing the greatest expansion began in Q1 2020, which suggests it is connected to COVID-19 conditions. Relatively higher growth in the middle quintiles reflects the tug-of-war between demand for housing in areas of traditionally strong job growth, that tend to be more expensive, and the greater ability to actually build and add housing inventory in relatively more affordable markets. Notes: The HBGI’s housing affordability measure, which debuted this quarter, should not be confused with the NAHB’s Housing Opportunity Index (HOI), another, more widely used benchmark for affordability.  However, unlike this measure of affordability, the HOI does not account for multifamily building permits. Related ‹ Building Materials Prices: Large Increases Year-To-DateTags: apartments, COVID-19, home building geography index, housing affordability, multifamily construction, single-family construction, suburban

Tracking the Geography of Home Building: Housing Affordability Metrics2021-09-10T15:15:10-05:00

Q2 2021 HBGI: Multifamily Suburban Shift

2021-09-07T09:26:14-05:00

In the second quarter of 2021, residential construction continued to shift toward the suburbs and lower-cost markets, and this trend is especially pronounced within the multifamily sector, according to the latest Home Building Geography Index (HBGI). During this period, multifamily construction posted double-digit percentage gains in small metro core and suburban areas, while large metro areas experienced a decrease for multifamily building activity. The HBGI shows that multifamily residential construction grew by 14.3% in small metro urban cores and 25.5% in small metro suburban areas in the latest quarter. In contrast, large metro core areas recorded a 0.5% year-over-year decline, reflecting the ongoing virus crisis’s baneful effects on housing in core counties of major metropolitan areas that started over a year ago. The top 3 regions that had the most growth, small cities’ core and outlying counties and small towns (“micro counties”), account for only 31.4% of the market share for multifamily, with 22.9% belonging to small cities’ core counties. Large metro areas’ core and suburban counties and small cities’ core counties together take 87.6% of the market share. As shown in the above figure, unlike the varied impact of the suburban shift on multifamily residential construction in the second quarter, single-family construction posted positive, double-digit growth in all regional submarkets, with the greatest growth of 36.3% occurring in outlying counties of large metro areas. These growth rates are partly inflated due to the dip that occurred in the prior year with the onset of the COVID-19 pandemic in the United States. However, it should be noted that single-family permit issuances, when seasonally adjusted, were shown in prior analyses to have softened in the second quarter, owing to supply-side limitations. It also bears mentioning that the HBGI data are subject to revisions. As a result of the multifamily permit revisions, the multifamily growth rates in Q1 2021 were recalculated this quarter, resulting in slightly lower estimates. Also, for single-family permit revisions, the recalculated growth rates and market shares show a more pronounced suburban shift than what was calculated in June (the “suburban shift” being the major theme of the Regional classification). Our next HBGI analysis will focus on measures of housing affordability using price-to-income ratios. All the HBGI data can be found at http://nahb.org/hbgi. Related ‹ Square Foot Prices Up in 2020Tags: COVID-19, exurbs, home building geography index, multifamily construction, nonmetropolitan, regional differences, residential construction, single-family construction, suburban

Q2 2021 HBGI: Multifamily Suburban Shift2021-09-07T09:26:14-05:00

Job Gains Slow in August Amid Delta Variant Surge

2021-09-03T11:18:57-05:00

Total payroll employment rose by 235,000 in August, marking a significant slowdown from the previous month. Meanwhile, the unemployment rate dropped to 5.2% in August, the lowest point during the pandemic. In August, residential construction employment rose by 17,400, while non-residential construction lost 20,300 positions, reflecting declines in builders (-2,800), nonresidential specialty trade contractors (-9,200) and heavy and civil engineering construction (-8,300). Currently, residential construction employment exceeds its level in February 2020, while only 52% of nonresidential construction jobs lost in March and April have been recovered. Aggregate construction industry (both residential and non-residential) employment totaled 7.4 million in August. In August, total nonfarm payroll employment increased by 235,000, reported in the Employment Situation Summary. It is the smallest monthly gain in the past seven months. The previous two months’ gains were revised higher. The June increase was revised up by 24,000, while the July increase was revised up by 110,000 from 943,000 to 1,053,000. During the first eight months of 2021, 4.7 million jobs have been created and monthly employment growth has averaged 586,000 per month. Total nonfarm employment in August 2021 is still 5.3 million lower than its pre-pandemic level in February 2020 level. Meanwhile, the unemployment rate declined by 0.2 percentage points to 5.2% in August. It was 9.6 percentage points lower than its recent high of 14.8% in April 2020 and 1.7 percentage points higher than the rate in February 2020. The August decrease in the unemployment rate reflected the decrease in the number of persons unemployed (-318,000) and the increase in the number of persons employed (509,000). The labor force participation rate, the proportion of the population either looking for a job or already with a job, was at 61.7% in August. In August, professional and business services, transportation and warehousing, educational services, and other services had job gains, while employment in retail trade declined over the month. Employment in leisure and hospitality was unchanged in August, after increasing for six straight months. Employment in the overall construction sector was little changed (+3,000) in August, following a revised increase of 6,000 jobs in July. Over the month, residential construction added 17,400 jobs, while nonresidential construction employment lost 20,300 jobs. Residential construction employment now stands at 3.1 million in August, broken down as 881,000 builders and 2.2 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 10,550 a month. Over the last 12 months, home builders and remodelers added 153,300 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,076,700 positions. In August, the unemployment rate for construction workers declined by 1.4 percentage points to 5.9% on a seasonally adjusted basis. The unemployment rate for construction workers has been trending lower, after reaching 14.1% in April 2020, due to the housing demand impact of the COVID-19 pandemic. Related ‹ Conventional Loans: Greatest Share of New Sales Since 2008Tags: COVID-19, employment, labor force, labor force participation rate, residential construction employment

Job Gains Slow in August Amid Delta Variant Surge2021-09-03T11:18:57-05:00

MBA Data Indicates Large Declines for Past Due and Seriously Delinquent Loans

2021-08-25T16:14:50-05:00

By Litic Murali on August 25, 2021 • According to the Mortgage Bankers Association’s (MBA) fourth quarter National Delinquency Survey (NDS), on a seasonally adjusted basis, the percentage of loans past due decreased from 6.38% in the first quarter to 5.47%. State-level data of the past due loan category reveal that all states had reduced their count of past-due loans. The states that experienced the largest numerical declines of past due loans were not the same states that had the largest percentage declines in past due loans; in the latter category, a plurality of states belonged to the West Census Region. Also worth noting in the NDS is the “seriously delinquent” loan category, defined as the loans that are either 90 or more days past due or in the process of foreclosure. These data are not seasonally adjusted. As the percentage of loans in the “seriously delinquent” category decreased in the second quarter to 4.03%, it also declined by count to about 1.6 million loans (seasonally adjusted), declining in its category by about 263,000 loans. The latest quarter’s drop in the “Seriously Delinquent” loan category, on numerical terms, marks the largest quarterly decline in recent history. The above data reveal, interestingly, that the percentages of “seriously delinquent” loans decreased in the FHA and VA loan categories one quarter later than those of Conventional loans. This speaks greatly to the varied nature of loss mitigation efforts for homeowners during COVID who were in dire financial straits. Related ‹ New Homes Built with Private Wells and Individual Septic Systems in 2020Tags: conventional loans, COVID-19, delinquencies, delinquency rate, FHA loans, foreclosures, mortgage bankers association, mortgage delinquency, national delinquency survey, VA loans

MBA Data Indicates Large Declines for Past Due and Seriously Delinquent Loans2021-08-25T16:14:50-05:00

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