The September pace of total housing starts decreased 9% due a substantial decline in multifamily production. Single-family construction continues, as expected, along a positive trend.
According to estimates from the Census Bureau and the Department of Housing and Urban Development, single-family starts increased 8.1% to a 783,000 seasonally adjusted annual rate in September. Year-to-date, single-family housing starts are running almost 10% higher than the year-to-date total for September of 2015.
Single-family permit growth points to additional growth. On a year-to-date basis, single-family permits from January to September of 2016 are more than 8% higher than this time in 2015.
Multifamily starts (units in 2+ properties) posted a large decline in September after a few months of strength. Apartment construction starts declined 38% in September to a seasonally adjusted annual rate of 264,000. Multifamily permits on a year-to-date basis are about 11% lower than this time in 2015.
Taken together, these trends are consistent with the NAHB forecast, which sees gathering strength for single-family construction and a leveling off of multifamily production as the market finds a balance between housing demand and supply.
Regionally, single-family starts showed strength in the Northeast, increasing 20%% on a monthly basis. Gains for single-family starts were also realized in the South (12%) and Midwest (6%). The West posted a slight drop of 2% after a strong August.
On a year-to-date basis, however, all regions have posted gains. Single-family starts are up 12% in the Northeast, 12% in the Midwest, 8% in the South and 6% in the West when comparing the September 2016 year-to-date total relative to the comparable September 2015 year-to-date totals.
Taking the long view, an examination of the count of homes currently under construction provides the degree of market mix and momentum of the recovery in home construction. As of September, 58% of units under construction in the nation were multifamily (605,000). The count of 605,000 is a 13% gain over a year earlier.
New homes with 5,000 square feet or more of living space increased both as a share of all new construction and in absolute number in 2015, according to the Census Bureau’s Survey of Construction. In 2015, the share of new homes this size reached a post-recession peak of 3.9% of new homes started. The total number of 5,000+ square-foot homes started that year was 28,000 units.
In 2012, the number of new homes started with 5,000+ square feet rose to 15,000 units, yet their share remained at only 2.8%. In 2015, while the number of 5,000+ square feet homes started (28,000) was the highest since 2008, their share of the new market (3.9%) was the highest since 2004. A previous postdiscussed the declining trend in the median and average size of new single-family homes due to an expansion in entry-level market wherein home size is expected to trend lower. This is not necessarily a contradiction, because 5,000+ square foot homes are relatively uncommon and represent the extreme upper tail of the distribution. The extreme upper tail can behave differently than the center of the distribution, measured by the average or median.
In the boom year of 2006, 3.0% or 45,000 new homes started were 5,000 square feet or larger. In 2007, the share of new homes this size was 3.6%, yet the total number of 5,000+ square-foot homes started that year fell to 37,000. In 2008, only 20,000 such homes were started or 3.2% of the total. From 2009 to 2011, fewer than 13,000 of these large homes were started every year, accounting for less than 3% of all new construction during this period. The extent to which the 5,000+ square foot homes have recovered, roughly to where they were in 2008, shows a growing trend at the top of the market at least through 2015.
When Shaun Alfreds and his wife decided to build a house for their family of five in Cumberland, Maine, they didn’t know if a high-performance project would be within their budget. “We aren’t wealthy by any stretch of the imagination, but we wanted an energy-efficient home,” says Alfreds, a chief operating officer at HealthInfoNet, a local health information technology company.
After some research, however, the couple realized that they achieve their dream for a nominal additional investment over the cost of a conventional house if they opted for a modular high-performance house. They chose a two-story, Cape Cod–style design from Portland, Maine–based BrightBuilt Home, and moved in last December.
At more than 3,000 square feet, the house is spacious, but its full sun exposure and a 10-kilowatt solar array of 39 photovoltaic (PV) panels should cover its energy consumption year-round. Alfreds says the house cost “almost exactly what other [builders] were bidding” for a standard, code-compliant project that was custom designed. And their small additional investment goes to building equity in the house, rather than to paying utilities.
BrightBuilt, a sister company of local firm Kaplan Thomson Architects (KTA), joins an increasing number of design companies that are expanding the market for high-performance residential projects. While KTA has custom-designed many energy-efficient houses, principal Phil Kaplan, AIA, says the firm also wanted to offer an off-the-shelf product. In 2015, it launched BrightBuilt with nine design templates. Starting at $175 to $180 per square foot, the houses bring net-zero energy to a price more people can afford. “We’re definitely seeing a lot of demand,” Kaplan says.
But some architects and builders have found ways to lower the price of net-zero housing even more.
Marie de Verneil dreamed of building a retirement home on land she owned in central Virginia. “To me, green was very important,” she says. However, her savings from teaching French and international relations at the University of Maryland, Baltimore County, didn’t seem like enough. “It’s kind of discouraging for someone like me,” she says.
Then de Verneil heard about Deltec Homes, in Asheville, N.C. The company—known for its distinctly round, prefabricated, and hurricane-resistant houses—recently launched Renew, a collection of models that use about two-thirds the energy of a conventional house and can include a PV array. De Verneil estimates she spent $250,000 on her 1,600-square-foot house (less than $160 per square foot), which includes a roof-mounted solar array. Her monthly electric bill is $30, the base fee for taxes and distribution. And when she is retired and living on a fixed income, she knows she’ll never have to say, “I can’t put the heat on.”
For those wanting to build a passive or net-zero energy house, right-sizing expectations is a crucial step to meeting one’s budget. And, as Deltec president Steve Linton adds, every project—modular or not—must be tailored to the particular site and climate. The company’s design team also conducts an energy model to evaluate site variables, solar energy capacity, building-shell size, features, and cost trade-offs.
Much of the market for high-performance housing is around single-family units in the suburbs, but the past few years have seen an uptick for multifamily dwellings and affordable housing projects in cities, including Washington, D.C., New York, and Philadelphia.
For low- and middle-income residents, in particular, an energy-efficient house can provide substantial benefits, says Orlando Velez, director of Housing Programs and Community at Habitat for Humanity of Washington, D.C.The organization recently built six passive townhouses last year in the district’s Ivy City neighborhood, whichhas a lot of air pollution. By creating a tight building envelope and filtering outside air, “you’re improving the air quality significantly,” Velez says. “It’s a healthier living environment.”
With savings from the lower utility bills, he says, residents may be able to spend more within the community. The organization plans to study those benefits over time to know whether energy efficiency is the best investment for its limited funds.
Living in a high-performance house can take some adjustment. Residents are often unfamiliar with high-tech HVAC equipment, such as energy recovery ventilators and solar water heaters. A tight building envelope also means that the size of the HVAC system can be decreased (fresh air supply is increased for indoor air quality purposes). The word that many residents use is “comfort”—indoor temperatures stay remarkably consistent across different areas of a house throughout the year.
NAHB’s analysis of Census Data from the Quarterly Starts and Completions by Purpose and Design survey indicates that the number of custom home building starts (homes built on an owner’s land, with either the owner or a builder acting as the general contractor) posted a slight increase on a year-over year basis as of the second quarter of 2016. There were 47,000 total custom starts for the quarter, compared to 45,000 for the second quarter of 2015.
Over the course of the last four quarters, there were 167,000 total custom single-family home construction starts. Note that this definition of custom home building does not include homes intended for sale, so the analysis uses a narrow definition of the sector.
As measured on a one-year moving average, the market share of custom home building in terms of total single-family starts is now 22%, down from a cycle high of 31.5% set during the second quarter of 2009.
The onset of the housing crisis and the Great Recession interrupted a 15-year long trend away from homes built on the eventual owner’s land. As housing production slowed in 2006 and 2007, the market share of this not-for-sale new housing increased as the number of single-family starts declined. The share increased because the credit crunch made it more difficult for builders to obtain AD&C credit, thus producing relatively greater production declines of for-sale single-family housing.
The market share for custom home building will likely experience ups and downs in the quarters ahead as the overall single-family construction market expands. Recent declines in market share are due to an acceleration in overall single-family construction.
Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates moving slightly lower from the previous week, remaining near their all-time record lows.
30-year fixed-rate mortgage (FRM) averaged 3.43 percent with an average 0.5 point for the week ending August 18, 2016, down from last week when it averaged 3.45 percent. A year ago at this time, the 30-year FRM averaged 3.93 percent.
15-year FRM this week averaged 2.74 percent with an average 0.5 point, down from last week when it averaged 2.76 percent. A year ago at this time, the 15-year FRM averaged 3.15 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.
Quote Attributed to Sean Becketti, chief economist, Freddie Mac.
“Ahead of the release of the FOMC minutes for July, 10-year Treasury yields were little changed from the prior week. The 30-year fixed-rate mortgage fell 2 basis points to 3.43 percent this week, erasing last week’s uptick. For eight consecutive weeks mortgage rates have ranged between 3.41 and 3.48 percent. Inflation is not adding any upward pressure on interest rates as the Bureau of Labor Statistics reported that the Consumer Price Index was unchanged in July.”
Never ones to shy away from throwing in alltheplants, Vietnamese architecture firm Vo Trong Nghiatakes the roof terrace to the next level in this new home in Nha Trang, Vietnam. The firm, working in collaboration with architect Masaaki Iwamoto, made the most of local construction rules—which required a sloped roof that’s at least half-covered in grey or terracota tiles—by creating a dreamy stepped garden brimming with all sorts of flowers, trees, and shrubbery.
The living spaces underneath are like an extension of the garden. Built around airy, vegetated interior courtyards, the living, dining, and bedrooms feel breezy and lush. The polished wood plank floors, white brick walls, and high ceilings certainly also help bring in as much light as possible.
The number of homes in some stage of foreclosure and the number of seriously delinquent mortgages continued to decline in May, falling to the lowest level since October 2007, according to the latest data from CoreLogic.
CoreLogic’s May 2016 National Foreclosure Report shows the national foreclosure inventory, which is the total number of homes at some stage of the foreclosure process and completed foreclosures, hovers around 390,000 homes.
According CoreLogic’s report, May’s foreclosure inventory hit the lowest level in nearly nine years.
CoreLogic’s report also showed that in May, the foreclosure inventory declined by 24.5% and completed foreclosures declined by 6.9% compared with May 2015.
The number of completed foreclosures nationwide decreased year over year from 41,000 in May 2015 to 38,000 in May 2016, which represents a decline of 67.9% from the peak of 117,813 in September 2010.
CoreLogic’s report also showed the sustained improvement in the number of mortgages in serious delinquency, defined as loans that are 90 days or more past due, and loans in foreclosure or Real Estate Owned.
According to CoreLogic’s report, the number of mortgages in serious delinquency fell by 21.6% from May 2015 to May 2016, with 1.1 million mortgages, or 2.8% of all mortgages, in this category.
The May 2016 serious delinquency rate is also the lowest in nearly nine years, reaching the lowest level since October 2007.
“The foreclosure rate fell to 1% in May, which is twice the long-term average of 0.5%. However, this masks the underlying progress at the state level,” said Frank Nothaft, chief economist for CoreLogic. “Twenty-nine states had foreclosure rates below the national average, and all but North Dakota experienced declines in their foreclosure rate compared to the prior year.”
Existing home sales jumped in May to their highest increase in almost 10 years, according to a recent report by the National Association of Realtors.
While existing home sales may have jumped, the high demand and lagging home prices caused the median sales prices to also shoot up to an all-time high, according to NAR.
In fact, all regions except for the Midwest saw strong sales increases in May.
Total existing home sales, or completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased by 1.8% to a seasonally adjusted annual rate of 5.53 million in May. This is up from April’s 5.43 million.
After this gain, sales now increased to 4.5% from last year’s 5.29 million and are at their highest annual pace since February of 2007. This is the third consecutive month of rising sales, according to NAR Chief Economist Lawrence Yun.
“This spring’s sustained period of ultra-low mortgage rates has certainly been a worthy incentive to buy a home, but the primary driver in the increase in sales is more homeowners realizing the equity they’ve accumulated in recent years and finally deciding to trade-up or downsize,” Yun said.
“With first-time buyers still struggling to enter the market, repeat buyers using the proceeds from the sale of their previous home as their down payment are making up the bulk of home purchases right now,” he added.
Although home prices are up, they are not yet at pre-recession levels.
“May’s existing home sales numbers suggest that healthy demand continues to support a recovering housing market, but that inventory woes are preventing a full recovery to pre-recession levels,” said Trulia Chief Economist Ralph McLaughlin. Trulia is an online real estate listing service.
Some insist that the increase in existing home sales holds little good news.
“It’s encouraging to see another month of growth, the third in a row, in today’s May existing home sales report,” according to Svenja Gudell, chief economist for the real estate listing service Zillow. “But beyond that, it offers buyers little good news to grasp onto.”
“Inventory, while up very modestly from April largely thanks to more condos coming up for sale, is still well below a year ago,” Gudell said. “And the time homes spend on the market has fallen by a week in just one month, to 32 days, making an already hyper-competitive market even more so.”
“Buyers struggling to find an affordable home to buy will continue to do so, even given these very small improvements,” he continued.
Median home prices peaked last June at $236,300, but increased to $239,700 in May. This is an annual increase of 4.7% in home prices, and marks to 51st consecutive month of year-over-year increases.
“Barring further deceleration in job growth that could ultimately temper demand from these repeat buyers, sales have the potential to mostly maintain their current pace through the summer,” Yun said.
While total housing inventory rose 1.4% from last month to 2.15 million existing homes available for sale, it is still down 5.7% from last year, according to NAR.
New homes surged in April, a sign that builders are stepping up as demand for housing remains robust.
Sales soared 16.6% to a seasonally adjusted annual rate of 619,000, the Commerce Department said Tuesday. That was the biggest monthly jump in 24 years and trounced estimates of a 525,000 pace.
The median price also jumped, rising 9.7% from 12 months ago to $321,100.
The big increase in sales took supply sharply lower. At the current pace, it would take 4.7 months to exhaust all inventory.
March numbers were revised up to a 531,000 annual pace. The April figures were 23.8% higher compared to a year ago.
Regional performance was mixed, from a 52.8% surge in the Northeast to a 4.8% decline in the Midwest. The South saw a 15.8% increase, while in the West sales were up 18.8%.
Demand for housing has run much hotter than supply for the past few years, in part because home builders have been reluctant to ramp up to the brisk level of activity they enjoyed before the recession.
Do you have a closet you’re terrified to open? Do sweaters, paperwork, and random Sports Illustrated Swimsuit issues from the last millennium clog up every drawer? If so, then there’s a very high likelihood you’re overdue for some serious spring-cleaning.
But what’s that you say: Lying on the couch bingeing on the latest season of “House of Cards” sounds way more enticing? Then you’ll love our first installment of the Lazy Homeowner’s Guide: a collection of hacks and shortcuts that make decluttering a breeze.
Try a few of these tips to whip your place into shape with minimal time and effort. Honest, you’ll barely work up a sweat
Trick yourself into tossing things
If you know you have a problem parting with things, Jennifer Adams, celebrity interior designer and lifestyle expert, advises taking on your separation anxiety literally. Get two large boxes; label one “repair/clean” and the other “not sure.” Box up the latter items, and date the box.
“If you haven’t opened the box in a year, donate it,” she says. Same goes for the “repair/clean” box. Stick them in the trunk of your car, and drive thyself to the nearest Salvation Army or other charitable organization.
“Face it: You’re not that committed to those items if you haven’t repaired, cleaned, or looked at them within a month or two,” Adams says.
Turn castoffs into cash
Maybe extra moolah is the prime incentive you need to help you clean out cluttered spaces. If selling your unwanted stuff on eBay is too complicated, try the simple-to-use app OfferUp, the largest mobile marketplace for local buyers and sellers. Take a snap of your unwanted items, and post it on the site—and you’ll instantly be connected to buyers in your neighborhood.
Curb your clothes
Your closets are likely full of clothes you don’t wear and are ripe for purging. What should you chuck?
“Focus on clothes that don’t fit, are out of style, require expensive tailoring, that don’t look good on you, or are duplicates,” says Cynthia Kienzle, aka New York’s The Clutter Whisperer. You could end up eliminating a large swath of your wardrobe, yet feel you have more clothes since everything you pull out is something you’ll actually wear!
Save space in your closet
After purging, set up simple systems and maintain them. One of Kienzle’s favorite inexpensive closet organizing tools is Ikea’s $5 hanging shoe bags. She calls them “the best organizing bargain around.” She also likes the Container Store’s Elfa door rack system—secured inside of closet doors—to hold scarves, gloves, and belts. For about $75, it’s an “inexpensive investment relative to the enormous value they provide. And they look so nice!” Finally, skinny Huggable hangers can triple your closet space, plus the felt keeps clothes from sliding off.
It’s time to unload those old catalogs, coupons, junk mail, and tax support documents (after all, you don’t need to keep your tax documents forever—for most states it’s only the past seven years). If you need to shred but dread the prospect of feeding a small home shredder all weekend, she recommends using Staples or FedEx Office shredding services. Easier still, you can hire a shredding truck to come to your apartment building or home.