New Homes Same Size but Higher Priced if Age-Restricted

2023-09-25T08:17:51-05:00

Of the roughly 1,005,000 single-family and 547,000 multifamily homes started in 2022, 59,000 (28,000 single-family and 31,000 multifamily) were built in age-restricted communities, according to NAHB tabulation of data from the Survey of Construction (SOC, conducted by the U.S. Census Bureau and partially funded by HUD).  A residential community can be legally age-restricted, provided it conforms the one of the set of rules specified in the Housing for Older Persons Act  of 1995. NAHB was first successful in persuading HUD and the Census Bureau to collect and publish data on the age-restricted status of new homes in 2009, during the depths of the housing downturn.  In 2009, builders started only 17,000 homes in age-restricted communities  (9,000 single-family and 8,000 multifamily).  The numbers then increased steadily until reaching 60,000 age-restricted starts, roughly evenly split between single-family and multifamily) in 2018.  In 2022, the 28,000 age-restricted single-family starts were slightly off the peak of 33,000 reached a year earlier, and the 31,000 age-restricted multifamily starts tied the all-time high set in 2018.  Although we don’t yet have data on age-restricted starts for 2023, a recent post shows that starts in general have been running lower than they were a year earlier, due largely to the Federal Reserve’s policy of interest rate hikes to tame inflation. The SOC provides enough data to look at the characteristics of new age-restricted single-family homes to see if they differ from other single-family homes started in 2022.  This exercise shows that the age-restricted homes tend to be about the same size as others, but on somewhat smaller lots and higher-priced.  The median size of an age-restricted home was exactly the same as the median for other single-family homes in 2022: 2,300 square feet.  As usual, however, the median lot size for age-restricted homes, was somewhat smaller—just under one-sixth of an acre vs. one-fifth for homes started outside of age-restricted communities.  There has been a general trend toward smaller lot sizes, as described in a September 8 post.  Another trend that has continued is the one toward higher house prices.  The median price of a new, age-restricted single family home started in 2022 and built for sale was $472,000—$75,000 higher than it was a year earlier and considerably above the $461,000 median price of non-age-restricted homes started in 2022. Other questions in the SOC show that new single-family homes are more likely to be attached (i.e., townhomes), and single story with no basement if the homes are age-restricted.  The age-restricted homes are also more likely to come with patios, but less likely to have decks.  Finally, age-restricted homes are less likely to require a loan and more likely to be purchased for cash, as home buyers who are older have had more of a chance to accumulate the savings and assets (often equity in a previous home) that can be converted to cash. Related ‹ Employment Situation in August: State-Level AnalysisTags: 55+ housing, age restricted, economics, home building, housing, SOC, survey of construction

New Homes Same Size but Higher Priced if Age-Restricted2023-09-25T08:17:51-05:00

Market Share for Modular and Other Non-Site Built Housing in 2022

2023-09-22T08:38:28-05:00

The total market share of non-site built single-family homes (modular and panelized) was just 2% of single-family homes in 2022, according to completion data from the Census Bureau Survey of Construction data and NAHB analysis. 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, which nonetheless holds potential for market share gains in the years ahead. In 2022, there were 26,000 total single-family units built using modular (12,000) and panelized/pre-cut (14,000) construction methods, out of a total of 1.02 million single-family homes completed. While the market share is small, there exists potential for expansion. This 2% market share for 2022 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 1992-2022 period. One notable regional concentration is found in the Northeast and Midwest. In the Northeast, 7% (3,000 homes) of the region’s 60,000 housing units were completed using non-site build construction methods, the highest share in the country. In the Midwest, 6% (7,000 homes) of the region’s 137,000 housing units were completed using non-site build construction methods. With respect to multifamily construction, approximately 2% of multifamily buildings (properties, not units) were built using panelized methods. Similar 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 ‹ Existing Home Sales Hit 7-Month Low as Prices Keep RisingTags: economics, home building, housing, modular, multifamily, panelized, single-family, SOC, systems built

Market Share for Modular and Other Non-Site Built Housing in 20222023-09-22T08:38:28-05:00

Share of Non-Conventional Financing Holds Steady in 2022

2023-09-06T09:22:17-05:00

NAHB analysis of the 2022 Census Bureau Survey of Construction (SOC) data shows that, nationwide, the share of non-conventional financing for new home sales accounted for 28.1% of the market, roughly the same as in 2021, at 28.8%. As in previous years, conventional financing dominated the market at 71.9% of sales. In 2020, the share of non-conventional financing was 34.4% of the market while conventional financing accounted for 65.6% of the market share. Non-conventional forms of financing, as opposed to conventional mortgage loans, include loans insured by the Federal Housing Administration (FHA), VA-backed loans, cash purchases and other types of financing such as the Rural Housing Service, Habitat for Humanity, loans from individuals, state or local government mortgage-backed bonds. The reliance on non-conventional forms of financing varied across the United States, with its share at 34.0% in West South Central but accounting for only 14.9% of new single-family home starts in the Middle Atlantic division. Nationwide, cash purchases were the majority share of non-conventional financing of new home purchases, accounting for 13% of the market share up from 11% in 2021. FHA-backed loans accounted for 8% which is lower than in 2021, where it was 11% of the market share. The share of VA-backed loans was at 4% market share in 2021 while Other Financing was 3% of market share. Cash financing dominated non-conventional forms of financing in East South Central, where 24.2% of all homes started were purchased with cash. Except for West South Central, cash purchases led non-conventional financing all other census regions. Cash purchases accounted for 23.3% in New England, 10.1% in Middle Atlantic, 17.6% in East North Central, 12.6% in West North Central, 12.1% in South Atlantic, 10.3% in Mountain, and 9.7% in Pacific. FHA-backed loans accounted for the majority of all non-conventional financing in the West South Central division accounting for 12.9% of the homes started. New England division reported the lowest FHA-backed loans with none of the homes started in 2022 were purchased with FHA-backed loans. VA-backed loans were most used in the Mountain division, which accounted for 6.7% of non-conventional forms of financing. In New England, VA-backed loans were only 0.3%, the lowest market share for this category. Other financing such as the Rural Housing Service, Habitat for Humanity, loans from individuals, state or local government mortgage-backed bonds was highest in West South Central where it was 6.3% of market share, while Middle Atlantic division reported the lowest share at 0.6%. Related ‹ Large Metro Markets Show Biggest Slowdown in Single-Family ConstructionTags: conventional loans, FHA, new home cash purchases, nonconventional loans, SOC, VA loans

Share of Non-Conventional Financing Holds Steady in 20222023-09-06T09:22:17-05:00

Wood-Framed Home Share Increased for Three Straight Years

2023-08-28T08:22:15-05:00

By Jing Fu on August 28, 2023 • Wood framing remains the most dominant construction method for single-family homes in the U.S., according to NAHB analysis of 2022 Census Bureau data. For 2022 completions, 94% of new homes were wood-framed, another 6% were concrete-framed homes, and less than half a percent was steel-framed. On a count basis, there were 956,000 wood-framed homes completed in 2022. This was a 7% gain over the 2021 total. The wood-framed market share has increased for the past three years, from 90% in 2019 to 94% in 2022. As noted above, steel-framed homes are relatively uncommon, with a total of 3,000 housing completions in 2022, the same amount as the 2021 completions. Concrete-framed homes experienced the third straight decline in 2022. After a 5% decrease in 2021 and a 13% decrease in 2020, the total number of concrete-framed homes decreased 11% from 71,000 completions in 2021 to 63,000 in 2022. Meanwhile, the concrete-framed market share decreased from 10% in 2019 to 6% in 2022. Non-wood based framing methods are primarily concentrated in the South due to residential resiliency requirements. In 2022, concrete-framed homes made up 10% of all homes completed in the South. Approximately two-thirds of steel framed homes completed in 2022 were in the South, with another one-third in the West. Related ‹ AD&C Loans: Rising Rate & Tightening Trends ContinueTags: concrete-framed homes, framing method, single-family construction, SOC, steel-framed homes, wood-framed homes

Wood-Framed Home Share Increased for Three Straight Years2023-08-28T08:22:15-05:00

Share of Two or More Stories New Homes Maintains Lead in 2022

2023-07-10T10:17:12-05:00

By Fan-Yu Kuo on July 10, 2023 • Data obtained from the US Census Bureau’s Survey of Construction (SOC) and tabulated by NAHB, show that the rising trend of two or more stories homes continued in 2022. Although the overall share remained virtually unchanged, the share of two or more stories homes started construction was greater than one story homes in 2022. Nationwide, the share of new homes with two or more stories stayed at 48% in 2022. However, the share of new homes with two or more stories showed a mixed trend across nine different regions. New England, East South Central and Pacific were the only three regions that saw an increase in the share of one story homes in 2022. Though single-story new homes are more common in the Midwest, shares of single-story homes in the Midwest region declined in 2022. Looking deeper, five of the nine divisions saw a greater share of newly-built two or more stories homes. Among these five divisions, New England and Middle Atlantic had a significantly higher proportion (75% and 80%) of two or more stories homes. However, it is worth noting that this share decreased notably in New England in 2022. New homes started with two or more stories in Mountain and Pacific were 57% and 59%. The greatest concentrations of two-or-more story homes were in divisions along the coasts of the country. New homes started in the Midwest and South showed a stronger preference of single-story homes, except for the South Atlantic division in the South. In the Midwest (East North Central and West North Central), 53% and 58% of new homes started were one-story, while the shares in the East South Central and West South Central were 55% and 58%. Related ‹ State-Level GDP in the First Quarter of 2023Tags: number of stories, SOC

Share of Two or More Stories New Homes Maintains Lead in 20222023-07-10T10:17:12-05:00

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