Seven Percent of Builders Now Build Barndominiums

2024-03-01T11:15:15-06:00

By Paul Emrath on March 1, 2024 • Over the past decade, use of the term “barndominium” (indicating a structure that is, in some sense, a combination barn and condominium) has become increasingly widespread in real estate media outlets. In fact, the term has become popular enough for NAHB to include a question about it in its survey for the February 2024 NAHB/Wells Fargo Housing Market Index. In response to that survey, a total of 7% of single-family builders reported that they did, indeed, build barndominiums sometime during the past 12 months. That result, however, leaves open the question of what a builder means by a barndominium. Unlike a term with a consistent definition maintained by, say, an academic organization or government agency, “barndominium” has meant different things to different reporters over the years. When the term was first gaining popularity, reporters were usually using it to describe a metal frame structure that was used as a primary residence. But that usage has been far from consistent. When NAHB’s builders were asked about the type of barndominiums they built, the vast majority (70%) indicated that their barndos were a combination of residential space and a large shop area—a criterion that doesn’t even consider the structure’s framing. The percentages referring to framing-based criteria were smaller but still significant: 30% of builders reported that their barndos were a combination of traditional residential and post-frame construction, and 26% said they were post-framed residential structures with sheet metal siding (26%). Only 9% said their barndos were created by actually converting a barn into a primary residence. Whichever of these techniques a builder uses, the result of creating a barndominium is a new housing unit which, in the typical jurisdiction, requires a residential building permit. ‹ Young Adults Living with Parents: State DifferencesTags: barndo; barndominium, economics, home building, housing

Seven Percent of Builders Now Build Barndominiums2024-03-01T11:15:15-06:00

Home Price Gains Continued in December

2024-02-27T12:16:32-06:00

National home prices continued to increase, hitting a new all-time high in December. Despite high mortgage rates, limited inventory and strong demand continued to push up home prices. Locally, six of 20 metro areas, experienced negative home price appreciation in December. The S&P CoreLogic Case-Shiller U.S. National Home Price Index (HPI), reported by S&P Dow Jones Indices, rose at a seasonally adjusted annual growth rate of 2.4% in December, slower than a 3.0% increase in November. It marks the fourth straight month of deceleration since September. Nonetheless, national home prices are now 70% higher than their last peak during the housing boom in March 2006. On a year-over-year basis (YOY), the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index posted a 5.5% annual gain in December, up from a 5.0% increase in November. It was the highest year-over-year gain over the past twelve months. Home price appreciation slowed greatly over the past year; the average YOY home price gain for 2023 was 2.4%, after the double-digit gains seen in the previous two years. Home prices are stabilizing as more buyers and sellers enter the market. Meanwhile, the Home Price Index, released by the Federal Housing Finance Agency (FHFA), rose at a seasonally adjusted annual rate of 1.2% in December, following a 4.3% increase in November. On a year-over-year basis, the FHFA Home Price NSA Index rose 6.5% in December, down from 6.6% in the previous month. In addition to tracking national home price changes, S&P Dow Jones Indices also reported home price indexes across 20 metro areas in December on a seasonally adjusted basis. While six out of 20 metro areas reported negative home price appreciation, 13 metro areas had positive home price appreciation. Home prices for Cleveland (OH) were unchanged from the previous month. Their annual growth rates ranged from -2.7% to 10.1%. Among all 20 metro areas, 10 metro areas exceeded the national average of 2.4%. Las Vegas led the way with a 10.1% increase, followed by Los Angeles with an 8.6% increase and Miami with an 8.0% increase. The six metro areas that experienced price declines are Portland (-2.7%), Minneapolis (-1.6%), San Francisco (-1.4%), San Diego (-1.3%), Detroit (-0.6%) and Dallas (-0.6%). The scatter plot below lists the 20 major U.S. metropolitan areas’ annual growth rates in November and in December 2023. The X-axis presents the annual growth rates in November; the Y-axis presents the annual growth rates in December. Seven out of the 20 metro areas, the dots above the blue line, had an acceleration in home price growth, while the remaining 13 metro areas, located below the blue line, experienced deceleration. ‹ New Home Sales Up at the Start of 2024Tags: FHFA Home Price Index, home prices, S&P CoreLogic Case-Shiller Home Price Index

Home Price Gains Continued in December2024-02-27T12:16:32-06:00

Labor Shortages Ease, But Remain Worse Than in the Last Boom

2024-02-23T13:18:30-06:00

With home building volumes lower, labor shortages have eased considerably since record levels set in 2021 but remain relatively widespread in a historic context, according to results from the latest NAHB/Well Fargo Housing Market Index (HMI) survey. The February 2024 HMI survey asked builders about shortages in 16 specific trades. The percentage of builders reporting a shortage (either some or serious) of labor they employ directly ranged from a low of 33% for landscape workers to a high of 65%  for those performing finished carpentry. The finished carpentry shortage was down from 72% in 2023 and an all-time high of 85% in 2021 but remains higher than it was at any time during the 2004-2006 housing boom (when it reached a temporary peak of 58% in July 2005). Most of the labor shortage percentages in the above figure follow a similar historic pattern. In the typical case, most of the physical work required to build a home is performed not by laborers employed directly by the builders, but by subcontractors. As a 2020 NAHB study  showed, builders on average use two dozen different subcontractors and subcontract out 84% of their total construction costs to build a single-family home. The February 2024 HMI survey also collected information about shortages of subcontractors.  The percentage of builders reporting a shortage of subcontractors ranged from 35% for building maintenance managers to 63%  for finished carpenters. For all 16 trades, the shortage percentages for subcontractors and labor directly employed were fairly similar. Averaged over the nine trades that NAHB has covered in a consistent way since the 1990s (carpenter-rough, carpenter-finished, electricians, excavators, framing crews, roofers, plumbers, bricklayers/masons, and painters), the share of builders reporting shortages in February 2024 was 52% for labor directly employed and 51% for subcontractors. The two numbers have not always been this close. After 2012, as housing markets started to recover from the Great Recession, a 5- to 7-point gap opened up between the 9-trade average shortage of subcontractors and labor directly employed by builders, with the subcontractor shortages being consistently more widespread. NAHB’s analysis at the time indicated that workers who were laid off and started their own trade contracting businesses during the Great Recession started returning to work for larger companies—improving the availability of workers directly employed by builders while shrinking the pool of available subcontractors. After persisting for a decade, the subcontractor-direct labor gap finally narrowed in 2023 and disappeared entirely in 2024. The current 9-trade average shortage of 52% for labor directly employed is down from 58% in 2023 and a record-high 77% in 2021 but remains elevated in historical perspective—especially when considered relative to housing starts. During the boom period of 2004-2006, total housing starts were consistently over 1.8 million annually—as high as 2.0 million in 2005. Despite this high rate of construction, the 9-trade shortage percentage never exceeded 45% during the boom. In comparison, the current shortage percentage of 52% occurred against a backdrop of 1.4 million starts in 2023 and an annual rate of 1.3 million recorded so far in January of 2024. ‹ Existing Home Sales Jump in JanuaryTags: carpenters, economics, hmi, home building, housing, Housing Market Index, labor, labor market, labor shortage, subcontractors

Labor Shortages Ease, But Remain Worse Than in the Last Boom2024-02-23T13:18:30-06:00

Homeownership is Key to Household Wealth

2024-02-21T10:15:31-06:00

Homeownership provides a wide range of benefits to households. In addition to providing households with a stable place to live, homeownership also offers an opportunity for households to accumulate assets and build wealth over time through equity. As of 2022, 66.1% of U.S. households owned their homes. For families that owned a home, the median net housing value (the value of a home minus home-secured debt) increased from $139,000 in 2019 to $201,000 in 2022, as home prices rose, and home mortgage debt was approximately flat1. In this article, we use the 2022 data from the Survey of Consumer Finances (SCF) to examine household balance sheets, especially their primary residence, across age and education categories. The 2022 SCF is a detailed triennial cross-sectional survey of U.S. family finances, published by the Board of Governors of the Federal Reserve System. Compared to the quarterly Financial Accounts of the United States (previously known as the Flow of Funds Accounts), which provides aggregate information on household balance sheets, the SCF provides family-level data2 about U.S. household balance sheets every three years since 1989. Homeownership plays an integral role in a household’s accumulation of wealth. According to the analysis of the 2022 SCF, nationally, the primary residence remained the largest asset category on the balance sheets of households in 2022 (as shown in Figure 1 above). At $40.9 trillion, the primary residence accounted for more than one quarter of all assets held by households in 2022, surpassing business interests (20%, $30.8 trillion), other financial assets3 (19%, $29.8 trillion) and retirement accounts (15%, $23.8 trillion). Playing an important role in household wealth accumulation, the primary residence not only represents the largest asset category on the household balance sheet, but also is a widely held category of nonfinancial assets by households. As mentioned earlier, about two out of every three households, 66%, owned a primary residence in 2022. Within the categories of financial assets, just over half of households, 54%, held retirement accounts, and 21% of households owned either stocks or bonds.  Other financial assets, which were held by 99% of households, include items such as checking accounts, money market accounts, and prepaid debit cards, which are often held more to facilitate financial transactions than to build wealth. In Figure 2, the bars represent the distribution of major assets on household balance sheets by age categories in 2022. The results shown in Figure 2 suggest that households generally accumulate more assets as they age. Total assets were $7.6 trillion for households under age 35, while they were $65.9 trillion for households aged 65 or older. The aggregate value of assets held by families where the head was aged 65 or older was approximately nine times larger than those held by families where the head was under age 35. The increases in the total assets among age groups indicate that the value of assets grows with age groups. Moreover, the distribution of major assets on household balance sheets varies by age group. Across age groups where households were under the age of 65, the aggregate value of the primary residence was the largest asset category on these households’ balance sheets. For households aged 65 or older, the primary residence became the second largest asset category, less than other financial assets. Although the aggregate value of the primary residence increases with age, partly reflecting higher homeownership rates across age categories, the aggregate value of the primary residence as a share of total assets declined with age, as shown in Figure 3. The decline in the share of total assets represented by the aggregate value of the primary residence was offset by growth in the share of other asset categories in aggregate, most notably stocks and bonds, other financial assets, and retirement accounts. An analysis of the SCF reveals that higher educational attainment is associated with higher value of asset holdings. The aggregate value of assets held by households with a bachelor’s degree or higher was five times higher than the aggregate value of assets held by those with some college or associate degrees. Notably, the primary residence remains the largest asset category for each educational attainment category. However, the aggregate value of the primary residence as a share of total assets varies by educational attainment categories. For households with a bachelor’s degree or higher, the aggregate value of the primary residence as a share of total assets was 23%, as these households held a greater amount of other assets, such as business interests, other financial assets, and retirement accounts. Meanwhile, for households with no high school diploma or GED, the primary residence accounted for half of their total assets. Note: 1 For details on changes in U.S. Family Finances from 2019 to 2022, see Aladangady, Aditya, Jesse Bricker, Andrew C. Chang, Sarena Goodman, Jacob Krimmel, Kevin B. Moore, Sarah Reber, Alice Henriques Volz, and Richard A. Windle (2023). Changes in U.S. Family Finances from 2019 to 2022: Evidence from the Survey of Consumer Finances. Washington: Board of Governors of the Federal Reserve System, October, https://www.federalreserve.gov/publications/files/scf23.pdf. 2 According to the SCF, the term “families”, used in the SCF, is more comparable with the U.S. Census Bureau definition of “households” than with its use of “families”. More information can be found here: https://www.federalreserve.gov/publications/files/scf23.pdf. 3 Other financial assets include loans from the household to someone else, future proceeds, royalties, futures, non-public stock, deferred compensation, oil/gas/mineral investments, and cash, not elsewhere classified. 4 Other residential real estate includes land contracts/notes household has made, properties other than the principal residence that are coded as 1-4 family residences, time shares, and vacation homes. 5 Other nonfinancial assets defined as total value of miscellaneous assets minus other financial assets. ‹ New Single-Family Home Size Moves LowerTags: asset, home mortgage, homeownership, household balance sheets, primary residence, primary residence equity, SCF, survey of consumer finances

Homeownership is Key to Household Wealth2024-02-21T10:15:31-06:00

Credit for Builders Remains Tight, But Tightening is Less Widespread

2024-02-20T14:19:38-06:00

During the fourth quarter of 2023, credit for residential Land Acquisition, Development & Construction (AD&C) remained tight, according to both NAHB’s survey on AD&C Financing and the Federal Reserve’s . However, the tightening was not as widespread as it was in recent quarters. The net easing indices derived from both surveys were negative once again in the fourth quarter, indicating net tightening of credit, but not as negative as they were in the third quarter. The NAHB index posted a reading of -19.7, compared to -49.3 in the third quarter, while the Fed’s index posted a reading of -39.7 compared to -64.9 in the third quarter. Although both the NAHB and Fed indices have been in negative territory for eight consecutive quarters, the fourth quarter 2023 readings were as close to positive as either index has been since the first quarter of 2022. According to the NAHB survey, the most common ways in which lenders tightened in the fourth quarter were by reducing the amount they are willing to lend (cited by 73% of the builders and developers who reported tighter credit conditions), increasing the interest rate on the loans (69%), and lowering the allowable Loan-to-Value or Loan-to-Cost ratio (65%). Meanwhile, results from the NAHB survey on the cost of the credit were mixed.  Quarter-over-quarter, the average contract rate remained the same on loans for land acquisition at 8.31% but increased from 7.78% to 8.12% on loans for land development, and from 8.37% to 8.40% on loans for pre-sold single-family construction.  In contrast, the average contract rate declined from 8.66% to 8.41% on loans for speculative single-family construction. The average initial points paid on the loans declined from 0.86% to 0.71% on loans for land acquisition and from 0.93% to 0.73% on loans for speculative single-family construction but increased from 0.58% to 0.60% on loans for land development, and from 0.86% to 1.08% on loans for pre-sold single-family construction that are tracked in the NAHB AD&C survey. The above changes caused the average effective interest rates (rate of return to the lender over the assumed life of the loan, taking both the contract interest rate and initial points into account) to move in different directions. There was a relatively small decline (from 10.85% to 10.58%) on loans for land acquisition, and a more substantial decline (from 13.74% to 12.96%) on loans for speculative single-family construction. On the other hand, the average effective rate increased from 10.76% to 11.25% on loans for land development, and from 14.57% to 15.65% on loans for pre-sold single-family construction. More detail on credit conditions for builders and developers is available on NAHB’s AD&C Financing Survey web page. ‹ Declines for Custom Home BuildingTags: ad&c lending, ad&c loans, ADC, construciton loans, construction lending, credit conditions, economics, home building, housing, interest rates, lending

Credit for Builders Remains Tight, But Tightening is Less Widespread2024-02-20T14:19:38-06:00

Single-Family and Multifamily Permits Down in 2023

2024-02-14T09:14:59-06:00

Over 2023, the total number of single-family permits issued year-to-date (YTD) nationwide reached 909,227. On a year-over-year (YoY) basis, this is 6.5% below the December 2022 level of 972,180. Year-to-date ending in December, single-family permits declined in all four regions. The range of permit decline spanned 5.0% in the South to 9.7% in the West. The Northeast declined by 7.1% and the Midwest declined by 7.6% in single-family permits during this time. For multifamily permits, the percentage decline spanned 14.6% in the South region to 28.5% in the Northeast. The West declined by 15.2% and the Midwest declined by 21.1% in multifamily permits during this time. Between December 2022 YTD and December 2023 YTD, except for Hawaii (+16.7%), Maryland (+8.7%), Nevada (+5.8%), West Virginia (+4.7%), Virginia (0.8%), North Carolina (0.7%), and Alabama (0.0%), all other states and the District of Columbia reported declines in single-family permits. The range of declines spanned 0.1% in Idaho to 59.4% in the District of Columbia. The ten states issuing the highest number of single-family permits combined accounted for 63.9% of the total single-family permits issued. Texas, the state with the highest number of single-family permits issued, declined 6.5% in the past 12 months; The succeeding highest state, Florida saw a decline of 6.9% while the next highest, North Carolina, posted an increase of 0.7%. For 2023, the total number of multifamily permits issued nationwide reached 561,369. This is 17.4% below the December 2022 level of 679,898. Between December 2022 YTD and December 2023 YTD, 15 states recorded growth in multifamily permits, while 35 states and the District of Columbia recorded a decline. Delaware (+96.3%) led the way with a sharp rise in multifamily permits from 562 to 1,103, while Wyoming had the greatest decline of 74.2% from 1,044 to 269. The ten states issuing the highest number of multifamily permits combined accounted for 63.2% of the multifamily permits issued. Over the last 12 months, Texas, the state with the highest number of multifamily permits issued, experienced a decline of 24.0%. Following closely, the second-highest state in multifamily permits, Florida, saw a decline of 12.4%. California, the third largest multifamily issuing state, declined by 3.4%. At the local level, below are the top ten metro areas that issued the highest number of single-family permits. Top 10 Largest Single-Family Markets Dec-23 (# of units YTD, NSA) YTD % Change (compared to Dec-22) Houston-The Woodlands-Sugar Land, TX                                         50,014 5% Dallas-Fort Worth-Arlington, TX                                         42,543 -2% Phoenix-Mesa-Scottsdale, AZ                                         24,810 -8% Atlanta-Sandy Springs-Roswell, GA                                         23,972 -9% Charlotte-Concord-Gastonia, NC-SC                                         19,088 1% Orlando-Kissimmee-Sanford, FL                                         17,035 5% Austin-Round Rock, TX                                         16,738 -22% Tampa-St. Petersburg-Clearwater, FL                                         14,827 -5% Nashville-Davidson–Murfreesboro–Franklin, TN                                         14,169 -7% Jacksonville, FL                                         12,402 -14% For multifamily permits, below are the top ten local areas that issued the highest number of permits.  Top 10 Largest Multifamily Markets Dec-23 (# of units YTD, NSA) YTD % Change (compared to Dec-22) New York-Newark-Jersey City, NY-NJ-PA                                         28,226 -39% Dallas-Fort Worth-Arlington, TX                                         24,014 -29% Austin-Round Rock, TX                                         21,861 -4% Phoenix-Mesa-Scottsdale, AZ                                         20,827 1% Los Angeles-Long Beach-Anaheim, CA                                         18,881 -13% Houston-The Woodlands-Sugar Land, TX                                         18,322 -35% Miami-Fort Lauderdale-West Palm Beach, FL                                         15,947 21% Atlanta-Sandy Springs-Roswell, GA                                         14,617 -30% Washington-Arlington-Alexandria, DC-VA-MD-WV                                         12,189 -41% Denver-Aurora-Lakewood, CO                                         11,651 -13% ‹ Inflation Remains Sticky due to Persistent Housing CostsTags: home building, multifamily, single-family, state and local markets, state permits

Single-Family and Multifamily Permits Down in 20232024-02-14T09:14:59-06:00

New CBO Population Estimates: Additional 8.9 Million People in 2053

2024-02-08T08:24:31-06:00

The Congressional Budget Office (CBO) released new 30-year population growth projections that include substantial upward revisions to the net immigration rates and slightly lower projected rates of mortality from COVID-19. As a result, the revised population estimates now include an additional 8.9 million people in 2053, a 2.4% increase from its previous forecast. A faster growing population will undoubtedly increase demand for housing (multifamily and single-family, for-sale, and for-rent), creating added pressure on the persistently underbuilt housing market. The largest revisions are concentrated in the population of prime working ages 25 to 54, the core of the US labor force, that is now projected to be larger by 4.8 million workers per year, on average, over the next 30 years. The population aged 16 to 24 is increased by 1.5 million people per year on average. The older population growth has undergone smaller revisions: the population ages 55 to 64 and ages 65 and older is augmented by an average of 740,000 people and 270,000 people per year, respectively. The CBO population growth projections are influenced by birth, death, and net immigration rates. The agency attributed most of the forecast gains in the labor force population to higher rates of net immigration over the next three years. After immigration levels declined in the early years of the pandemic, CBO estimates that net immigration to the United States increased sharply in recent years, reaching 2.6 million in 2022 and 3.3 million in 2023 . In comparison, net immigration from 2010 to 2019 was averaging 900,000 people per year. The agency boosted the projected number of people immigrating to the United States to 3.3 million in 2024, 2.6 million in 2025, and 1.8 million in 2026. After 2026, net immigration is expected to return to historical levels, averaging 1.1 million per year over the 2027–2054 period. The lower projected rates of mortality from COVID-19 also contributed to the upward revisions but on a smaller scale, and mostly for the population in the older age groups. Partially offsetting the positive gains in population is a reduction in the projected total fertility rate, from 1.75 to 1.70 births per woman. Despite the substantial positive revisions, US population growth generally slows over the next 30 years. As population ages with deaths exceeding births, net immigration is expected to bring additional workers to sustain the aging population. According to the CBO forecast, by 2040, net immigration will become the only source of population gains in the US. CBO’s projections of net immigration are based on the latest data from the Department of Homeland Security (DHS) and the Census Bureau. In the near term, reflecting a current surge in international immigration, CBO’s projections are significantly higher than the Census Bureau’s projections. ‹ Higher Rates and Lack of Supply Continue to Hamper Mortgage MarketTags: CBO, housing demand, net immigration rates, population projections

New CBO Population Estimates: Additional 8.9 Million People in 20532024-02-08T08:24:31-06:00

Higher Rates and Lack of Supply Continue to Hamper Mortgage Market

2024-02-07T10:19:56-06:00

By Jesse Wade on February 7, 2024 • Per the Mortgage Bankers Association’s (MBA) survey through the week ending February 2nd, total mortgage activity increased 3.7% from the previous week, and the average 30-year fixed-rate mortgage (FRM) rate rose two basis points to 6.80%. The 30-year FRM has floated around 6.8% for much of the start of the year, only moving one basis point from January. Total mortgage activity is 12.9% lower than last year. One reason for this is the 30-year FRM was at a relatively lower level of 6.18% last year. The Market Composite Index, a measure of mortgage loan application volume, rose by 3.7% on a seasonally adjusted (SA) basis from one week earlier. Purchasing activity fell 0.7% and refinancing activity increased 12.3% week-over-week. Purchasing activity was 18.6% lower than one year ago, and refinancing activity was up 0.7% from one year ago. The refinance market has remained dull due to most homeowners having lower rates than the current levels, while in the purchase market the lack of housing supply continues to hamper potential buyers. The refinance share of mortgage activity rose from 34.2% to 35.4% over the week, while the adjustable-rate mortgage (ARM) share of activity fell from 6.6% to 6.4%. The average loan size for purchases was $434,800 at the start of February, up from $421,800 over the month of January. The average loan size for refinancing decreased from $273,500 in January to $270,500 in February. The average loan size for an ARM was up at the start of February to $949,200, while the average loan size for a FRM rose to $337,300. ‹ Homeownership Rates by Race and EthnicityTags: finance, interest rates, mba, mortgage applications, mortgage bankers association, mortgage lending, refinancing

Higher Rates and Lack of Supply Continue to Hamper Mortgage Market2024-02-07T10:19:56-06:00

Job Growth Surges in January

2024-02-02T11:24:32-06:00

The U.S. economy entered the new year with a strong gain in payroll employment and an unchanged unemployment rate. Job gains in November and December were much stronger than initially estimated, according to revisions of the establishment survey data. January’s jobs report shows that the job market remains unexpectedly strong despite the impact of the highest interest rates in two decades. The estimates confirm that the Fed will not be in a rush to cut interest rates in March. Additionally, wage growth showed strength in January. On a year-over-year basis (YOY), wages grew 4.5% in January, stronger than an upwardly revised 4.3% in December but lower than the roughly 6% in the beginning of 2022. Wage growth is positive if matched by productivity growth. If not, it can be a sign of lingering inflation. Total nonfarm payroll employment increased by 353,000 in January, faster than the upwardly revised increase of 333,000 jobs in December, as reported in the Employment Situation Summary. It was the biggest monthly gain in the past twelve months. The estimates for the previous two months were revised higher. The monthly change in total nonfarm payroll employment for November was revised up by 9,000, from +173,000 to +182,000, while December was revised up by 117,000 from +216,000 to +333,000. Combined, the revisions were 126,000 higher than the original estimates. Despite restrictive monetary policy, about 6.8 million jobs have been created since March 2022, when the Fed enacted the first interest rate hike of this cycle. In January, the unemployment rate remained at 3.7% for the third consecutive month. The number of unemployed persons and employed persons showed little change. The labor force participation rate, the proportion of the population either looking for a job or already holding a job, was unchanged at 62.5%. Moreover, the labor force participation rate for people aged between 25 and 54 rose 0.1 percentage point to 83.3%. While the overall labor force participation rate is still below its pre-pandemic levels at the beginning of 2020, the rate for people aged between 25 and 54 exceeds the pre-pandemic level of 83.1%. January’s job gains were broad-based across sectors, led by professional and business services (+74,000), health care (+70,000), retail trade (+45,000), and social assistance (+30,000). Meanwhile, employment in mining, quarrying, and oil and gas extraction industry decreased by 5,000. Employment in the overall construction sector increased by 11,000 in January, following an upwardly revised 24,000 gains in December. While residential construction added 2,700 jobs, non-residential construction employment added 7,600 jobs for the month. Residential construction employment now stands at 3.3 million in January, broken down into 938,000 builders and 2.4 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 5,083 a month. Over the last 12 months, home builders and remodelers added 60,100 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,350,300 positions. In January, the unemployment rate for construction workers rose by 0.7 percentage points to 5.2% on a seasonally adjusted basis. The unemployment rate for construction workers remained at a relatively lower level, after reaching 14.2% in April 2020, due to the housing demand impact of the COVID-19 pandemic. ‹ Private Residential Construction Spending Grows for Third Straight MonthTags: employment, labor force, labor force participation rate, residential construction employment

Job Growth Surges in January2024-02-02T11:24:32-06:00

U.S. Economy Ends 2023 With Surprisingly Strong Growth

2024-01-25T12:15:53-06:00

The U.S. economy grew at a surprisingly strong pace in the fourth quarter, mainly fueled by resilient consumer spending. However, the fourth quarter data from the GDP report suggests that inflation is cooling. The GDP price index rose 1.5% for the fourth quarter, down from a 3.3% increase in the third quarter. The Personal Consumption Expenditures (PCE) Price Index, which measures inflation (or deflation) across various consumer expenses and reflects changes in consumer behavior, rose 1.7% in the fourth quarter, down from a 2.6% increase in the third quarter. According to the “advance” estimate released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) increased at an annual rate of 3.3% in the fourth quarter of 2023, following a 4.9% gain in the third quarter. It marks the sixth consecutive quarter of growth. This quarter’s growth was higher than NAHB’s forecast of a 0.9% increase. For the full year, real GDP increased 2.5% in 2023, up from a 1.9% increase in 2022, and slightly better than NAHB’s forecast of 2.4%. This quarter’s increase in real GDP reflected increases in consumer spending, exports, government spending, and private domestic investment. Imports, which are a subtraction in the calculation of GDP, increased 1.9%. Consumer spending, the backbone of the U.S. economy, rose at an annual rate of 2.8% in the fourth quarter, reflecting increases in both services and goods. While expenditures on services increased 2.4% at an annual rate, goods spending increased 3.8% at an annual rate, led by other nondurable goods (+5.1%) and recreational goods and vehicles (+10.9%). Both federal government spending and state and local government spending increased in the fourth quarter. The increase in state and local government spending primarily reflected increases in compensation of state and local government employees and investment in structures, while the increase in federal government spending was led by nondefense spending. In the fourth quarter, exports rose 6.3%, reflecting increases in both goods and services. Nonresidential fixed investment increased 1.9% in the fourth quarter, following a 1.4% increase in the third quarter. The increase in nonresidential fixed investment reflected increases in intellectual property products (2.1%), structures (3.2%), and equipment (1.0%). Additionally, residential fixed investment (RFI) rose 1.1% in the fourth quarter, down from a 6.7% increase in the third quarter. This is the second straight gain after nine consecutive quarters of declines. Within residential fixed investment, single-family structures rose 11.6% at an annual rate, multifamily structures declined 1.0%, and improvements rose 5.5%. ‹ New Home Sales Bounce Back in December on Lower Mortgage RatesHousing Share of GDP Inched up In the Fourth Quarter of 2023 ›Tags: economics, gdp, inflation, macroeconomics, macroeconomy, residential fixed investment

U.S. Economy Ends 2023 With Surprisingly Strong Growth2024-01-25T12:15:53-06:00

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