Mid-April found the sales volume of both new and existing homes moving off recent lows, but housing prices continued to fall due to weak demand and relatively high unemployment.

While housing starts increased by more than 7% in March, overall starts remained at a level well below what will be required to keep up with demand from population growth.

Residential construction activity has been restrained, in part, by the scarcity of builder financing. The lending crisis contributed to builder confidence receding somewhat in April. Also a factor was competition from distressed sales, which rose in April to 40% of all existing home sales.

Beyond housing, recent data show the economy slowly gaining strength, particularly in manufacturing. Hiring is growing across economic sectors, but it has not been strong enough to inspire consumer confidence or generate increases in wages. At the same time, businesses are encountering growing energy and commodity price pressures — costs not easily passed along to anxious consumers, who are contending with rising energy and food costs of their own.

The last few weeks have also seen the debate over the nation’s long-term fiscal challenges heating up, with Rep. Paul Ryan (R-Wis.) and President Obama unveiling competing tax and spending blueprints. The Congress and the President did manage to agree to repeal last year’s health care bill’s new 1099 information reporting requirement, which is good news for small businesses.

The Latest Postings 

• March New Home Sales Off Record Low
  Chief Economist David Crowe discusses the March new home sales report, which at 300,000 on an annualized basis is an 11.1% increase from February’s record low pace. New home inventories neared their all-time low, with the supply falling to 7.3 months at the March sales pace. Posted: April 25
  
  
• House Prices Continue to Slide in February
  House price data from the Federal Housing Finance Agency showed continued housing price declines, with the FHFA index down 1.6% in February and 5.7% for the year. Posted: April 21
  
  
• Existing Home Sales Resume Upward Growth in March
  Estimates from the National Association of Realtors showed  sales of existing homes increasing in six of the last eight months, with sales in March rising 3.7% to 5.1 million on an annualized basis. Investors were responsible for 22% of existing home purchases in March. Posted: April 20
  
  
• Home Construction Rebounds
  Housing starts increased more than 7% in March, with increases in every region and for both single-family and multifamily construction. The increases support NAHB’s forecast of gradual growth in housing construction in 2011, with momentum building throughout the year. Posted: April 19
  
  
• April’s Housing Market Index
  Chief Economist David Crowe discusses the April NAHB/Wells Fargo Housing Market Index reading. Posted: April 18
  
  
• Home Builder Index Slips Backward
  The NAHB/Wells Fargo Housing Market Index (HMI) dropped one point in April. Posted: April 18
  
  
• Beige Book: General Economic Improvement
  The Federal Reserve’s Beige Book, which provides an overview of economic conditions by region and sector, showed the economy slowly improving, with the notable exception of persistent weakness in the housing sector. Posted: April 15
  
  
• Inflation Expectations Build With the Consumer Price Index Rising Again in March
  Rising food and energy prices pushed the Consumer Price Index (CPI),, up for the ninth straight month. The year-over-year increase now stands at 2.7%. Posted: April 15
  
  
• Onwards and Upwards — Energy Price Rises Continue Unabated,  Pushing the Producer Price Index Higher in March
  With businesses facing rising energy and commodity costs, the Producer Price Index (PPI)  rose 0.7% in March, and the cost of finished goods has risen 5.8% over the past year. Posted: April 14

Tax Policy Updates Affecting Home Builders and Housing’s Tax Incentives

• Tax Day Post: Federal Tax Revenues
  This post examines the state of federal tax revenues (including individual tax revenues) and the recent history of the top marginal income tax rate, with a focus on the structural budget deficit. Posted: April 18
  
  
• Health Care Law’s 1099 Reporting Requirement Repealed
  New legislation has repealed the onerous 1099 reporting requirement that was enacted as part of last year’s health care reform bill and was set to take effect in 2012. NAHB estimates that the average builder would have been required to submit an additional 40 1099s absent the repeal. Posted: April 15
  
  
• Individual Tax Policy: The President’s New Deficit Proposal
  President Obama laid out a new deficit plan with an automatic cut in tax expenditures, including the mortgage interest deduction, if the federal government does not achieve certain budget targets. This post examines the plan in detail and explores its possible impact on housing and home building. Posted: April 14

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