Percent Share of 5,000+ Square Foot Homes Rises in 2021


By Ashok Chaluvadi on September 15, 2022 • According to the annual data from the Census Bureau’s Survey of Construction (SOC), the share of new homes started with 5,000 square feet or more of living space stood at 2.90 percent in 2021, up from 2.50 percent in 2020.  A total of 33,000 5,000+ square-foot homes were started in 2021, compared to 25,000 in 2020.  The increase in number and share of  5,000+ square foot homes is consistent with the rising trend in median and average size of new single-family homes seen during the pandemic. In 2015, the number of 5,000+ square feet homes started was the highest since 2007, and their share of the new market was the highest since the inception of the series in 1999. In the boom year of 2006, 3.0 percent or 45,000 new homes started were 5,000 square feet or larger. In 2007, the share of new homes that large increased to 3.6 percent while the total number that year fell to 37,000. In 2008, only 20,000 such homes were started, or 3.2 percent of the total.  From 2009 to 2012, the number of these large homes started remained well under 20,000 a year, accounting for less than 3 percent of single-family construction during this period. When analyzed by the different characteristics, 82 percent of 5,000+ square feet home started in 2021 have a porch, 74% have a finished basement, 68 percent each have a patio, 66 percent have a 3-or-more car garage, 63 percent have 4 bathrooms or more, 59 percent have a community association and 55 percent have 5 bedrooms or more. Related ‹ Gypsum Products, Transformers, and Concrete Prices Post Historic 12-Month IncreasesTags: construction, economics, eye on the economy, home building, housing economics, housing trends report, single-family

Percent Share of 5,000+ Square Foot Homes Rises in 20212022-09-15T10:16:25-05:00

Lot Values Set New Records


Lot values for single-family detached housing starts in 2021 increased across the nation, with the national value and six out of nine Census division values setting new records. U.S. median lot price now stands at $55,000, according to NAHB’s analysis of the Census Bureau’s Survey of Construction (SOC) data. In New England and Pacific, lot values surged 67% and 39%, respectively, and reached new historic highs, even after adjustments for inflation. As a result, half of single family detached homes started in New England were built on lots valued at or more than $200,000. Though these new lot values seem sky high, these are consistent with record lot shortages, recent significant building material price hikes and unprecedented supply challenges that have been constraining the pandemic-fueled housing boom in 2021. When adjusted for inflation, lot values are now close to the record levels of the housing boom of 2005-2006 when half of lots were valued over $43,000, which is equivalent to about $57,800 when converted into inflation-adjusted 2021 dollars. At the same time, home building shifted towards smaller lots, resulting in record high prices per acre. New England has been a division with the most expensive lots for decades but ended up in a league of its own in 2021 when, as noted above, its median lot price surged 67% and reached $200,000, almost quadrupling the national median. This means that half of all single-family detached (SFD) spec homes started in New England in 2021 were built on lots valued at or in excess of $200,000. New England is known for strict local zoning regulations that often require very low densities. As a matter of fact, the median lot size for single-family detached spec homes started in New England in 2021 was four times the national median. Therefore, it is not surprising that typical SFD spec homes in New England are built on some of the most expensive lots in the nation. The Pacific division has the smallest lots. However, median lot value reached $143,000 in 2021, the second most expensive value in the nation and a new record for the division, even after adjusting for inflation. As a result, Pacific division lots stand out for being most expensive in the nation in terms of per acre costs. Similarly, the Middle Atlantic division recorded a strong rise in lot values and set a new record with half of lots priced at or above $90,000. This made the Middle Atlantic division SFD lots third most expensive in the US. The Mountain division followed with a median lot price of $75,000, a new divisional record. Two neighboring divisions in the South – South Atlantic and East South Central – also posted divisional records. Nevertheless, these divisions remain home to some of the least expensive lots valued well below than the national median. Half of SFD spec homes started in these divisions in 2021 have lot values of $42,000 or less. The East South Central Division records the second largest lots in the nation, thus defining some of the most economical lots, as well as lowest per acre costs in the US. The West South Central, which includes Texas, and East North Central divisions were the only two divisions that posted moderate declines in the median lot values. In case of the West South Central Division, it was a welcome change after recording some of the fastest lot value appreciation in recent years. Less than a decade ago, half of SFD lots here were going for $30,000 or less, almost half of the current median of $55,000. For this analysis, median lot values were chosen over averages since averages tend to be heavily influenced by extreme outliers. In addition, the Census Bureau often masks extreme lot values on the public use SOC dataset making it difficult to calculate averages precisely but medians remain unaffected by these procedures. This analysis is limited to single-family speculatively-built homes by year started and with reported sales prices. For custom homes built on owner’s land with either the owner or a builder acting as the general contractor, the corresponding land values are not reported in the SOC. Consequently, custom homes are excluded from the analysis. Related ‹ Median Price of a New Age-Restricted Home Up to $472,000Tags: 2021 starts, home building, lot prices, lot shortage, single-family

Lot Values Set New Records2022-09-12T08:16:09-05:00

Modular and Other Non-Site Built Housing In 2021


By Danushka Nanayakkara-Skillington on September 8, 2022 • The total market share of non-site built single-family homes (modular and panelized) was at 2% of single-family completions in 2021, according to Census Bureau Survey of Construction data and NAHB analysis. This share has been steadily declining since early-2000s despite the high-level of interest for non-site built construction. In 2021, there were 24,000 total single-family units built using modular (10,000) and panelized/pre-cut (14,000) construction methods, out of a total of 970,000 total single-family homes completed. While the market share is small, there exists potential for expansion. This 2% market share for 2021 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 1992-2021 period. One notable regional concentration is found in the Midwest where 6% (7,000 homes) of the region’s 125,000 housing units were completed using non-site build construction methods, the highest share in the country. With respect to multifamily construction, approximately 1% of multifamily buildings (properties, not units) were built using modular and panelized methods. Similarly to single-family construction, this market share was expected to grow, but the expected gains did not materialize due to various constraints in the industry. In the year 2000 and 2011, 5% of multifamily buildings were constructed with modular (1%) or panelized construction methods (4%). Related ‹ Share of Smaller Lots Record High Amid PandemicTags: economics, home building, housing, modular, multifamily, panelized, single-family, SOC, systems built

Modular and Other Non-Site Built Housing In 20212022-09-08T09:21:54-05:00

Stucco and Vinyl were the Most Common Siding Materials on New Homes in 2021


By Ashok Chaluvadi on August 29, 2022 • According to the annual data from the Census Bureau’s Survey of Construction (SOC), stucco was the most common principal siding material on new single-family homes started in 2021 (28 percent),  followed by vinyl siding (24 percent), fiber cement siding (such as Hardiplank or Hardiboard (23 percent) and, brick or brick veneer (19 percent). Far smaller shares of single-family homes started last year had wood or wood products (4 percent) and stone, rock or other stone materials (1 percent) as the principal exterior wall material. The Census Bureau’s SOC data is available by the nine census divisions and there are substantial differences in the use of siding across divisions. Although stucco was the most common siding material in the country as a whole, its popularity is concentrated in a few parts of the country. In 2021, vinyl siding was the most widely used primary exterior material in four northern census divisions. Vinyl siding was used on 74 percent of the new homes started in the Middle Atlantic, 66 percent in New England, 63 percent in the East North Central and 45 percent in the West North Central. Stucco was the most commonly used primary exterior wall material in the Pacific, Mountain and South Atlantic divisions in 2021: 63 percent, 53 percent and 40 percent, respectively, of the new single-family homes started in those areas used it. Brick or brick veneer was the most common exterior siding material in East and West South Central divisions. In the West South Central, 62 percent of the new single-family homes started in 2021 used brick or brick veneer as the primary exterior material, compared to 42 percent in the East South Central. Related ‹ Student Housing Investment Edges Down in the Second Quarter of 2022Tags: Building Materials, construction, economics, eye on the economy, home building, housing economics, single-family

Stucco and Vinyl were the Most Common Siding Materials on New Homes in 20212022-08-29T10:19:17-05:00

New Home Sales Plummet in July


By Danushka Nanayakkara-Skillington on August 23, 2022 • New home sales in July fell to their lowest level since January 2016 as the industry grapples with supply chain disruptions that are delaying new home building projects and raising housing costs as mortgage interest rates increased. The U.S. Department of Housing and Urban Development and the U.S. Census Bureau estimated sales of newly built, single-family homes in July at a 511,000 seasonally adjusted annual pace, which is a 12.6% decline over downwardly revised June rate of 585,000 and is 29.6% below the July 2021 estimate of 726,000. Sales-adjusted inventory levels are at an elevated 10.9 months’ supply in July. However, only 45,000 of the new home inventory is completed and ready to occupy. This count has been going up in recent months and is up 40.6% compared to a year ago. Moreover, sales are increasingly coming from homes that have not started construction, with that count up 22.6% year-over-year, not seasonally adjusted (NSA). The median sales price increased to $439,400 in July, up 5.9% compared to June and is up 8.2% compared to a year ago. Nationally, on a year-to-date basis, new home sales are down 15.7% for the first seven months of 2022. Regionally, on a year-to-date basis, new home sales fell in all four regions, down 14.9% in the Northeast, 26.5% in the Midwest, 13.4% in the South, and 15.7% in the West. Related ‹ Employment Situation in July: State-Level AnalysisTags: economics, home building, housing, new home sales, sales, single-family

New Home Sales Plummet in July2022-08-23T10:18:28-05:00

New Home Size Trends Reversing?


By Robert Dietz on August 19, 2022 • An expected impact of the virus crisis is a need for more residential space, as people use homes for more purposes including work. During the housing boom of recent quarters, this led to a rise for new single-family home size. However, as the housing market weakens this trend appears to be reversing. According to second quarter 2022 data from the Census Quarterly Starts and Completions by Purpose and Design and NAHB analysis, median single-family square floor area inched down to 2,302 square feet. Average (mean) square footage for new single-family homes decreased to 2,498. Since Great Recession lows (and on a one-year moving average basis), the average size of new single-family homes is now 5.9% higher, while the median size is 10.3% higher. Home size rose from 2009 to 2015 as entry-level new construction was constrained. Home size declined between 2016 and 2020 as more starter homes were developed. Going forward we expect home size to face opposing determinants. A shift in consumer preferences for more space due to the increased use and roles of homes (for work among other purposes) will increase the demand for space, while tighter budgets due to elevated interest rates will reduce demand. Related ‹ Existing Home Sales Fall to Two-Year LowTags: economics, home building, home size, housing, single family home size, single-family

New Home Size Trends Reversing?2022-08-19T08:18:45-05:00

Flat Conditions for Custom Home Building


By Robert Dietz on August 18, 2022 • NAHB’s analysis of Census Data from the Quarterly Starts and Completions by Purpose and Design survey indicates custom home building registered relatively flat conditions for the second quarter of 2022. There were 53,000 total custom building starts during the second quarter of the year. This marks a 2% decline compared to the first quarter of 2021. Over the last four quarters, custom housing starts totaled 204,000 units, a 9% gain from the prior four-quarter total. After market share declines due to a rise in spec building, post-covid the market share for custom homes has increased slightly. As measured on a one-year moving average, the market share of custom home building, in terms of total single-family starts, was flat at 18%. This is down from a cycle high of 31.5% set during the second quarter of 2009. Note that this definition of custom home building does not include homes intended for sale, so the analysis in this post uses a narrow definition of the sector. It represents home construction undertaken on a contract basis for which the builder does not hold tax basis in the structure during construction. Related ‹ Townhouse Construction SlowsTags: custom, custom building, economics, home building, housing, single-family

Flat Conditions for Custom Home Building2022-08-18T08:26:23-05:00

Townhouse Construction Slows


By Robert Dietz on August 17, 2022 • According to NAHB analysis of the most recent Census data of Starts and Completions by Purpose and Design, during the second quarter of 2022 single-family attached starts totaled 38,000, which is 9.5% lower than the second quarter of 2021. Nonetheless, over the last four quarters, townhouse construction starts totaled 148,000 units, 7% higher than the prior four quarter total (138,000). However, these totals will slow in the quarters ahead as the overall building market slows. Using a one-year moving average, the market share of newly-built townhouses decreased to 12.5% of all single-family starts. This represents a slight weakening of market share after recent gains for medium-density housing demand. The peak market share of the last two decades for townhouse construction was set during the first quarter of 2008, when the percentage reached 14.6%, on a one-year moving average basis, of total single-family construction. This high point was set after a fairly consistent increase in the share beginning in the early 1990s. The long-run prospects for townhouse construction remain positive given growing numbers of homebuyers looking for medium-density residential neighborhoods, such as urban villages that offer walkable environments and other amenities. This will be particularly true for prospective first-time buyers in high cost metro areas. Related ‹ Single-Family Built-for-Rent Construction SurgingTags: economics, home building, housing, single-family, townhouse, townhouses

Townhouse Construction Slows2022-08-17T08:16:05-05:00

Single-Family Built-for-Rent Construction Surging


Single-family built-for-rent sector construction surged during the second quarter of 2022 as homebuying affordability declined on higher mortgage interest rates. According to NAHB’s analysis of data from the Census Bureau’s Quarterly Starts and Completions by Purpose and Design, there were approximately 21,000 single-family built-for-rent (SFBFR) starts during the second quarter of 2022. This is a 91% gain over the second quarter 2021 total. Over the last four quarters, 69,000 such homes began construction, which is a 60% increase compared to the 43,000 estimated SFBFR starts in the prior four quarters. The SFBFR market is a means to add inventory amid challenges over housing affordability and downpayment requirements in the for-sale market, particularly during a period when a growing number of people want more space and a single-family structure. Single-family built-for-rent construction differs in terms of structural characteristics compared to other newly-built single-family homes, particularly with respect to home size. Given the relatively small size of this market segment, the quarter-to-quarter movements typically are not statistically significant. The current four-quarter moving average of market share (6%) is nonetheless higher than the historical average of 2.7% (1992-2012) and sets a data series high as this submarket expands. Importantly, as measured for this analysis, the estimates noted above only include homes built and held by the builder for rental purposes. The estimates exclude homes that are sold to another party for rental purposes, which NAHB estimates may represent another five percent of single-family starts based on industry surveys. Indeed, the Census data notes an elevated share of single-family homes built as condos (non-fee simple), with this share averaging 4% over recent quarters. Some, but not all, of these homes will be used for rental purposes. Additionally, it is theoretically possible some single-family built-for-rent units are being counted in multifamily starts, as a form of “horizontal multifamily,” given these units are often built on single plat of land. However, spot checks by NAHB with permitting offices indicate no evidence of this data issue occurring at scale thus far. With the onset of the Great Recession and declines in the homeownership rate, the share of built-for-rent homes increased in the years after the recession. While the market share of SFBFR homes is small, it has clearly been trending higher. As more households seek lower density neighborhoods and single-family residences, a growing number will do so from the perspective of renting. This will be particularly true as mortgage interest rates remain elevated and increase. Thus, the SFBFR market will expand in the quarters ahead. Related ‹ Housing Starts Weaken in JulyTags: economics, home building, housing, SFBFR, single family built for rent, single-family

Single-Family Built-for-Rent Construction Surging2022-08-16T10:25:11-05:00

Decline in Single-Family Permits in June 2022


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

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