Builder confidence in the market for newly-built single-family homes rose one point to 65 in July, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This marks the sixth consecutive month that sentiment levels have held at a steady range in the low- to mid-60s.
Builders report solid demand for single-family homes. However, they continue to grapple with labor shortages, a dearth of buildable lots and rising construction costs that are making it increasingly challenging to build homes at affordable price points relative to buyer incomes.
Even as builders try to rein in costs, home prices continue to outpace incomes. The current low mortgage interest rate environment should be getting more buyers off the sidelines, but they remain hesitant due to affordability concerns. Still, attractive rates should help spur new home purchases in large metro suburban markets, where approximately one-third of new construction takes place according to the NAHB HBGI. Lower recent have driven new home sales 4% higher on a year-to-date basis thus far in 2019, while single-family permits continue to lag.
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
All the HMI indices inched higher in July. The index measuring current sales conditions rose one point to 72, the component gauging expectations in the next six months moved a single point higher to 71 and the metric charting buyer traffic increased one point to 48.
Looking at the three-month moving averages for regional HMI scores, the South moved one point higher to 68 and the West was also up one point to 72. The Northeast remained unchanged at 60 while the Midwest fell a single point to 56.
Prices paid for goods used in residential construction decreased by 1.1% in June (not seasonally adjusted) according to the latest Producer Price Index (PPI) released by the Bureau of Labor Statistics. The decline broke a four-month trend of increases and was only the fifth month over the past two years in which prices fell.
Over the past 12 months, building materials prices have decreased 1.6%, just the fifth June year-over-year decrease since 2000. The decline is a sharp reversal of June 2017 to June 2018, during which prices increased 8.8%.
The PPI report shows that softwood lumber prices decreased (-1.7%, not seasonally adjusted) in June—the index’s third consecutive monthly decline. Prices remain at their lowest level since February 2017. While weekly prices have been volatile since mid-May according to Random Lengths, the difference between the average prices of softwood lumber in May and June mirrored the PPI data (-1.8% v. -1.7%).
One of the special indexes published by BLS tracks lumber and plywood in one category. Similar to softwood lumber, the lumber and plywood index fell 2.3%. Prices paid for softwood lumber and lumber and plywood have decreased 23.1% and 17.6%, respectively, since June 2018.
The price index for gypsum products continued its downward trend in June, declining 1.9%. In the last 10 months, gypsum prices have only increased twice.
Prices have declined by 6.2% and 10.8% since January 2019 and August 2018, respectively.
Ready-mix concrete prices increased 1.2% in June and remain relatively volatile. Prices have risen by more than 1.0% in two of the past three months, something that has only happened in 18 of the previous 231 months.
These seven products will make your home a DIY haven. Find out what the Family Handyman editors are falling in love with right now.
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Telescoping ladders allow you to reach the same height as standard extension ladders, but they eliminate all ’re lighter and easier to transport and take up far less space in your garage. There are a few different brands, and each has models that extend to various heights. We got our hands on the Xtend + Climb 770P, and we’re big fans. It retracts to just 32 in. tall and extends in 1-ft. increments, up to 12 ft. And it weighs only 27 lbs. You can get one online for about $190.2 / 7
My go-to tape
I use a tape measure nearly every day and rely on them for accuracy in detailed woodworking and metalworking projects, and for large-scale carpentry. But I don’t always need to lay out 35-ft.walls, so I prefer this 16-ft. Milwaukee compact tape measure for day-to-day work. It’s easy to carry in my tool belt or clip to my pocket. The strong, nylon-coated blade is printed on both sides, so I can read measurements from any position. The rugged outer case has survived many drops from the top of my ladder to my concrete shop floor. You can find one for about $11 at home centers and online. — April Wilkerson, Contributing Editor3 / 7
The bits in this StubbyBit set by Milescraft may look funny, but they’re super practical. They solve the problem of making pilot or dowel holes in confined spaces—for example, to add shelf pin holes in a narrow cabinet.
If you combine one with a right-angle bit, you can drill a pilot hole nearly anywhere. The hex shank makes going from drill bit to driver bit very fast, and the short length means they’re less likely to snap off. Pick up a set for about $14 online. When you need them, you’ll be glad you did.
By the time we’d get to the dinner dishes after putting the kids to bed, my wife and I would often find melted cheese and lasagna residue stuck to our plates. But when I remodeled our kitchen, I installed a Kohler faucet with a sweeping sprayer pattern that acts like a scraper to rinse off dishes. It doesn’t replace elbow grease in extreme cases of dried-on dinner, but it definitely works better than the faucet we had before. This is the Simplice kitchen faucet, which is available at Home Depot for $180, but Kohler makes several models with this convenient feature. — Mike Berner, Associate Editor
If you’ve struggled to get a grip on short wires or to pull cable through an electrical box, compound-motion pliers may provide the extra gripping power you’re looking for. A few brands make them, but I’ve had the DeWalt long nose pliers in my belt for the recent electrical work I’ve been doing. You can find compound-motion pliers at home centers and online. This DeWalt long nose costs $15. It’s also available in a set (less than $40) that includes side cutters and lineman’s pliers.
Headlamps provide hands-free light that follows your line of vision. That makes them a great tool for DIYers, whether you’re putting away your string trimmer after sunset, navigating a dark attic or crawl space, or working under the hood. The downside is that most headlamps are spotlights that focus their light on what’s in front of you. This OV LED Broadbeam Headlamp gives you 210 degrees of illumination, lighting up your surroundings so you can find your tools in the yard or change that tire in the dark. It’s powered by three “AAA” batteries and has two brightness settings. OV LED headlamps are available online for $15.
If you’re thinking about a way to upgrade your bathroom, here’s an easy one. Put a frame around the plain mirror above your vanity. MirrorMate simplifies that by cutting a frame to fit for you. After you supply the mirror dimensions on its website, including how much space is around your mirror, it will ship a frame to your home along with special connectors and glue to put it together. Just glue the ends together, pound the connectors in, and stick it on. You can choose from 65 frame styles in different pricing tiers at mirrormate.com.
Every product is independently selected by our editors. If you buy something through our links, we may earn an affiliate commission.
Mortgage rates have steadily declined with the 30-year fixed-rate bottoming out to 3.82 percent, its lowest level since September 2017, according to the latest figures from Freddie Mac.
Digital Risk co-founder Jeff Taylor told FOX Business’ Neil Cavuto that now is the time for new home buyers to take advantage of the bigger inventory on the market.
“If you’re looking to get into the housing market, i.e., you don’t have a house right now, this is literally the perfect time,” he during an interview on Monday. “Interest rates are about a one percentage point less than it was this time last year … that’s a 10 percent savings on a 30-year mortgage a month.”B
The Federal Reservemight cut the federal funds rate twice this year, a move that could cause the 30-year fixed rate to fall even lower.
“If you get two rate cuts at 50 and if you get to 75, yeah, I think you can be back down to three and a quarter [percent], Taylor said.C
Taylor adds that the lower interest rates allow consumers to reach a little deeper into their pockets and “afford more of a house.”
“People are feeling better about their jobs right now and they’ve been saving. It’s a great time to finally to get into the housing market and make a purchase,” he said.
Sales of new U.S. single-family homes fell from near an 11-1/2-year high in April as prices rebounded, but demand for housing remains underpinned by declining mortgage rates and a strengthening labor market.FILE PHOTO: A new apartment building housing construction site is seen in Los Angeles, California, U.S. July 30, 2018. REUTERS/Lucy Nicholson
The Commerce Department said on Thursday new home sales dropped 6.9% to a seasonally adjusted annual rate of 673,000 units last month. March’s sales pace was revised up to 723,000 units, the highest level since October 2007, from the previously reported 692,000 units.
April’s decline followed three straight monthly increases
Economists polled by Reuters had forecast new home sales, which account for about 10% of housing market sales, would decrease 2.8% to a pace of 675,000 units in April.
Sales increased 7.0% from a year ago. The median new house price increased 8.8% from a year ago to $342,200 in April, the highest level since December 2017.
New home sales had in recent months outperformed other housing market indicators, including building permits, which had dropped for five straight months in April. New home sales are drawn from permits.
Economists attributed the recent strength in new home sales to declining mortgage rates. The new housing market has not been severely constrained by an inventory shortage, which has crippled sales of previously owned homes.
A report on Tuesday showed existing home sales fell for a second straight month in April, weighed down by a chronic shortage of more affordable houses.
The overall housing market hit a soft patch year and has contracted for five straight quarters. With the 30-year fixed mortgage rate dropping to around 4.07% from near an eight-year high of 4.94% in November, there is reason to be cautiously optimistic about the housing market.
New home sales in the South, which accounts for the bulk of transactions, declined 7.3% in April. Sales in the Midwest dropped 7.4% and those in the West tumbled 8.3%. But sales in the Northeast jumped 11.5%.
There were 332,000 new homes on the market last month, down 0.9% from March. While builders have stepped up construction of more affordable homes to meet strong demand in this market segment, land and labor shortages remain a challenge.
At April’s sales pace it would take 5.9 months to clear the supply of houses on the market, up from 5.6 months in March.
Housing starts in the US rose 5.7 percent from a month earlier to a seasonally adjusted annual rate of 1,235 thousand units in April 2019, more than an expected 1,205 thousand and following a revised 1.7 percent advance in March.
Single-family homebuilding, which accounts for the largest share of the housing market, rose 6.2 percent to a rate of 854 thousand units in April and starts for the volatile multi-family housing segment advanced 4.7 percent to a rate of 381 thousand units. Increases in housing starts were recorded in the Northeast (84.6 percent to 144 thousand) and Midwest (42 percent to 186 thousand), while declines were seen in the South (-5.7 percent to 581 thousand) and West (-5.5 percent to 324 thousand). Starts for March were revised to 1,168 thousand from 1,139 thousand.
Building permits were up 0.6 percent to a rate of 1,296 thousand units in April, while markets had expected a 0.5 percent gain. Permits for the volatile multi-family housing segment increased 8.9 percent to 514 thousand, while single-family authorizations fell 4.2 percent to 782 thousand. Across regions, permits were higher in the West (5.3 percent to 339 thousand) and Midwest (2.2 percent to 188 thousand), but dropped in the Northeast (-4 percent to 120 thousand) and South (-1.2 percent to 649 thousand).
Year-on-year, housing starts dropped 2.5 percent and building permits decreased 5 percent.
According to a estimates from the U.S. Housing and Urban Development and Commerce Department, single-family starts continued to show weakness in March, despite the recent stabilization in the NAHB/Wells Fargo Housing Market Index (HMI). After downward revisions made to the February data, single-family starts were down 0.4% to a 785,000 seasonally adjusted annual pace in March, the lowest such rate since September 2016.
On a year-to-date basis, single-family construction is 5.3% lower than the first quarter of 2018. NAHB’s forecast, and the forward-looking HMI suggest that future data will show stabilization followed by slight gains due to recent declines in mortgage interest rates. However, single-family permits continued to be soft in March, declining 1.1% for the month to a 808,000 annual pace, the lowest since August 2017.
On a regional and year-to-date basis, single-family starts are down 21% in the housing affordability challenged West, 20% in the Midwest, 2% in the Northeast and up 5% in the South.
Multifamily starts were unchanged from February to March at a 354,000 annual rate. However, comparing the first quarter of 2019 to the first quarter of 2018 shows a 19% decline for 5+ unit production.
Recent production declines are clear in the current estimates of units under production. As of March 2019, there were 531,000 single-family homes under construction. While this is 4.5% higher than a year ago, it is down from the 543,00 peak count from January 2019. Similarly, there are currently 595,000 apartments under construction, which is more than 3% lower than a year ago and down from the peak count of 625,000 in February 2017. The combination of these declines in current construction activity are seen clearly in the graph below, with declines for total housing under construction for all of 2019.
Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that mortgage rates dropped with the beginning of spring homebuying season.Sam Khater, Freddie Mac’s chief economist, says, “Mortgage rates have dipped quite dramatically since the start of the year and house prices continue to moderate, which should help on the homebuyer affordability front. The combination of improving affordability and more inventory than the last few spring selling seasons should lead to improved home sales demand.”
News Facts30-year fixed-rate mortgage (FRM) averaged 4.28 percent with an average 0.4 point for the week ending March 21, 2019, down from last week when it averaged 4.31 percent. A year ago at this time, the 30-year FRM averaged 4.45 percent. 15-year FRM this week averaged 3.71 percent with an average 0.4 point, down from last week when it averaged 3.76 percent. A year ago at this time, the 15-year FRM averaged 3.91 percent. 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.84 percent with an average 0.3 point, unchanged from last week. A year ago at this time, the 5-year ARM averaged 3.68 percent.Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.
VIEWS41KSHARE221Designed to amplify nature, these cozy, modern cabins invite you to embrace the simple life.
Winter is the perfect time to rally family and friends for a cabin getaway, featuring days in the unspoiled snow and nights spent nursing hot (spiked) cider around the fireplace. If you’re dreaming about your own rustic retreat in the wilderness, look no further for inspiration than these 20 modern winter cabins below that demonstrate a deep respect for their snowy, wooded surrounds.
Described by Seattle–based Olson Kundig Architects as “a steel box on stilts,” this three-story cabin in upstate Washington is fitted with four 10′ x 18′ steel shutters that are rolled over the glass windows, so it can be sealed off from the elements when not in use. In fact, the client requested that Delta Shelter be virtually indestructible: the steel exterior makes it fire-resistant, while its steel-beam legs protect it from flooding.
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Architect Håkon Matre Aasarød, partner at Oslo–based studio Vardehaugen Architects, led the design of Cabin Vindheim—an off-grid cabin deep in the alpine landscape near Lillehammer, Norway, whose spaceship-like appearance gives it an otherworldly presence.
This sleek cabin by Reiulf Ramstad Arkitekter adapts to the slope of the terrain, and divides into two branches of living areas. The same timber cladding of the exterior extends onto the roof, creating a unified expression.
The minimalist cabins of this Norwegian hotel offer elegant shelter, while striking a remarkable communion with the sublime, natural environment. Billed a “landscape hotel,” the lodge features nine separate rooms that offer distinct views of the topography.
International firm Snøhetta created this new addition to Sweden’s Treehotel that’s perfect for stargazing. Barring a fear of heights, you can choose to lay your sleeping bag on the double-layered net that connects the cabin’s two bedrooms and enjoy a night under the stars.
Sam Khater, Freddie Mac’s chief economist, says, “The combination of cooling inflation and slower global economic growth led mortgage rates to drift down to the lowest levels in a year. While housing activity has clearly softened over the last nine months and the lingering effects of higher rates from last year are still being felt, lower mortgage rates and a strong job market should rekindle demand for the spring homebuying season.”
30-year fixed-rate mortgage (FRM) averaged 4.37 percent with an average 0.4 point for the week ending February 14, 2019, down from last week when it averaged 4.41 percent. A year ago at this time, the 30-year FRM averaged 4.38 percent.
15-year FRM this week averaged 3.81 percent with an average 0.4 point, down from last week when it averaged 3.84 percent. A year ago at this time, the 15-year FRM averaged 3.84 percent.
Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.