The Official Online Weekly Newspaper of NAHB
As the nation’s housing industry slowly moves to higher ground, weak consumer confidence in the face of persistently high unemployment and a wobbly U.S. economy will restrain housing demand and production this year, according to speakers at NAHB’s semi-annual Construction Forecasting Webinar on April 27.
But housing market conditions are improving, noted NAHB Chief Economist David Crowe, with housing affordability at its best in a generation and household formation rates beginning to thaw from the deep freeze induced by the recession. Overall, Crowe expects little improvement in single-family housing starts in 2011, but solid gains in multifamily starts.
Moody’s Analytics Chief Economist Mark Zandi added that he expected further modest declines in house prices over the next 12 to 18 months as a result of the ongoing foreclosure crisis. However, NAHB Senior Economist Robert Denk indicated that foreclosures and house price declines are limited to a small number of troubled states — including Arizona, California, Florida and Nevada.
Key economic data released in the past two weeks show the employment situation improving, with an increase of 244,000 new jobs in April and an average of 233,000 jobs added per month since February. Even so, 22 months into the recovery unemployment is at a lofty 9.0% and 13.7 million Americans are officially out of work.
An increase in residential construction spending in March has also brought mixed news — with the improvement limited to home improvement spending, with single-family and multifamily construction spending down, in line with weak housing starts.
The NAHB Remodeling Market Index climbed in the first quarter of 2011 to its highest level in the past five years — additional evidence of a rosier outlook for the home improvement sector.
New data on homeownership from the Census Bureau suggest that tight credit conditions for home buying are having a disproportionately negative impact on those under age 35.
A new NAHB study using data from the association’s Housing Opportunity Index finds that homeownership is much less affordable for blacks, Hispanics and Native Americans.
And Washington has recently seen the emergence of another complicated tax proposal that would erode homeownership opportunities for middle-income earners, significantly limiting deductions for mortgage interest and real estate taxes.
The Latest Postings
New Analysis Examines Housing Affordability by Race/Ethnicity
A new paper by NAHB economist Rose Quint examines differences in housing affordability for different racial and ethnic groups in the United States using data from the NAHB/Well Fargo Housing Opportunity Index. Posted: May 9
The Employment Situation for April — Don’t Be Distracted
The Employment Situation report for April provided conflicting signals about labor market conditions. But looking at the big picture, despite some progress, labor market conditions remain weak. Posted: May 6
Another Week, Another Complicated Tax Proposal
A new plan that proposes capping “tax expenditures benefits” from all the itemized deductions to a maximum 2% of adjusted gross income, would limit deductions for mortgage interest and real estate/property taxes. Posted: May 4
Private Residential Construction Improves in March
Private residential construction spending showed a moderate in March, but spending on single-family and multifamily housing continued to decline. Posted: May 2
Remodeling Market Headed to Recovery
The NAHB Remodeling Market Index jumped to 46.5 for the first quarter of 2011— its highest level since the end of 2006. Posted: April 28
Homeownership Declines Hitting Younger Households Hardest
Census Bureau data indicate that those under age 35 have experienced a disproportionate decline in their homeownership rates, edged out by tight credit conditions for home buying. Posted: April 27
NAHB Spring Construction Forecast Webinar
A summary of NAHB’s Spring Construction Forecast Webinar — including presentations from NAHB Chief Economist David Crowe, Moody’s Analytics Chief Economist Mark Zandi and NAHB Senior Economist Robert Denk —– shows that a full-fledged housing recovery is slowly coming into view. Posted: April 27
State of the Nation’s Rental Housing
A new report from the Harvard Joint Center for Housing Studies observes that there is an insufficient amount of new multifamily supply in the pipeline to head off shortages and fast rising rents as demand grows. Posted: April 26
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