Friday, October 31, 2014

BuilderBytes' MetroIntelligence Economic Update for 10/31/14

Please click here to see the edition of BuilderBytes for 10/31/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • 3Q 2014 GDP rose by 3.5 percent in advance estimate
  • Federal Reserve ends QEIII, will now focus on interest rates
  • Initial unemployment claims rise by 3,000 in latest report
  • Mortgage applications dip 6.6 percent in latest survey, interest rates up slightly 
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Thursday, October 30, 2014

Where are the first-time homebuyers? Demographic shifts point to delayed milestones.

During the month of September, while both new and existing home sales rose slightly, there was one group which continues to remain somewhat on the sidelines:  the first-time buyer.  According to the National Association of Realtors®, in September the share of first-time buyers was 29 percent for the third straight month. 

Since historically the share of first-time buyers has been closer to 40 percent, given that these buyers have represented less than 30 percent of the market in 17 of the last 18 months, it’s almost certain that this change will have an impact on the housing market in the future.  So just where have these first-time buyers gone, and what are their plans for their housing needs?

For now, most are choosing to rent:  according to the Census Bureau, the share of households age 25 to 29 who owned their own homes fell from nearly 41 percent in 2007 to 34 percent by 2013, which is great for landlords but not for the neighborhood stability which accompanies higher percentages of homeownership.

Not surprisingly, the primary reason they’re choosing to rent for now is economic:  according to the non-profit group Generation Opportunity, unemployment rates for millennials (those born between 1980 and 1995) remain higher than for other age groups.  Even when they do find employment, many jobs are either part-time or offer low, entry-level wages which wouldn’t help them qualify for mortgages.

Considering that the average worker today doesn’t earn the national median salary until age 30 – versus age 26 in 1980 – a four- or five-year delay in reaching traditional milestones such as getting married, starting families and buying homes seems to mirror the temporary disappearance of many first-time homebuyers.  Consequently, if the median age for a first-time homebuyer has been about 31 -- and 47 for a move-up buyer -- any delays in grabbing the first rung of that homeownership ladder are likely to have an impact on future purchases.

In addition, other factors have also been at play here, including tougher mortgage loan standards, a lack of entry-level home inventory, and student loan debt that often must be paid down before buyers can qualify for a mortgage.  Meanwhile, young adults trying to save for down payments must also contend with rising housing costs, with many households paying 30 percent – and much higher in high-cost cities – of their incomes on rent.

Fortunately, despite these considerable headwinds facing young adults, the ongoing speculation that millennials won’t embrace homeownership as much as previous generations simply isn’t true:  It’s simply being delayed.   In fact, according to recent research from Zillow, the dip in first-time home buyers has been much more about long-term changes in family structures that it is about current economic conditions.

If anything, young adults are simply trying to navigate a mortgage system that simply hasn’t kept up with the times.  Given that 90 percent of today’s mortgages are supported by various government programs (up from 40 percent a decade ago), another reason for fewer first-time buyers could simply be a lack of mortgage options which would open up the lending spigot.

Indeed, for married, dual-income couples, the homeownership rate is actually above pre-recession historical levels, whereas it has dropped for the increasingly rare, traditional family structure of two parents who live on a single full-time income.  For young singles, although the rate of homeownership has been mostly flat over the last decade, this rate still seriously lags those of married couples.  Consequently, if the rate of marriage for young adults today stands at about 26 percent – compared with 36 percent of Gen Xers, 48 percent of baby boomers and 65 percent of the Silent Generation at the same age – we certainly shouldn’t be surprised at their delay in settling down and buying homes.

For builders, the challenge is to offer homes today that millennials want, and that means more urban-oriented projects close to transit centers that can effectively compete with upscale rental projects which continue to offer more compelling amenities.

As for the millennials themselves, the future job market is already pivoting towards them, as many of them sat out the poor labor market of the recession by improving their education.  Last year, 34 percent of those aged 25 to 29 held some type of college degree, making them the best-educated cohort since 1968.  With their comfort of the latest technologies and awareness of current cultural tastes, for many employers the combination of these factors at a lower salary than older, more seasoned candidates will prove hard to resist.

BuilderBytes' MetroIntelligence Economic Update for 10/30/14

Please click here to see the edition of BuilderBytes for 10/30/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Case-Shiller Indices show continued deceleration in home gains through August
  • Consumer confidence rebounds in October
  • Durable goods orders slumped in September after busy summer
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Tuesday, October 28, 2014

BuilderBytes' MetroIntelligence Economic Update for 10/28/14

Please click here to see the edition of BuilderBytes for 10/28/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • September new home sales rose to six-year high
  • Pending home sales rose in September to second-highest level over last year
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Friday, October 24, 2014

October column for Green Home Builder magazine now online

My column for the October 2014 issue of Green Home Builder magazine is now posted online.

For this issue, entitled "The Driverless Car's Impact on Land Use," I did some (quite fascinating) research on just what kind of changes in land use patterns we can expect in the future from the driverless (or self-driving) car. An excerpt:
So just what does this mean for land use and real estate development?  Firstly, the very act of decoupling parking requirements from obtaining project approvals will have an enormous impact on how we design office buildings, retail centers, high-density multi-family projects and even the traditional single-family home...

Secondly, driverless cars could make long commutes more bearable due to both the improved efficiencies of an interactive fleet which constantly coordinate with real-time traffic information, as well as the ability to free up riders to be more productive during hours which are otherwise wasted...

Thirdly, the mixed-use, pre-WWII walkable community that is returning to favor nationally could become even more prevalent if cities are willing to relax their parking requirements -- if and when the driverless car gains critical mass...
To read the entire column, click here.

To read the entire October 2014 issue in digital format, click here.

BuilderBytes' MetroIntelligence Economic Update for 10/24/14

Please click here to see the edition of BuilderBytes for 10/24/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • August FHFA House Price Index up 4.8 percent over previous 12 months
  • Leading Economic Index rose 0.8 percent in September after no change in August
  • Initial unemployment claims rise 17,000 in latest report but 4-week average still lowest since May 2000
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Thursday, October 23, 2014

BuilderBytes' MetroIntelligence Economic Update for 10/23/14

Please click here to see the edition of BuilderBytes for 10/23/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Existing home sales bounced back in September to highest pace of 2014
  • CPI nearly flat in September, up just 1.7 percent over previous 12 months
  • Mortgage applications rise 11.6 percent in latest survey as rates continue to fall
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Tuesday, October 21, 2014

BuilderBytes' MetroIntelligence Economic Update for 10/21/14

Please click here to see the edition of BuilderBytes for 10/21/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • September housing starts up 6.3 percent from August and 17.8 percent year-over-year, exceeding estimates
  • September building permits up 1.5 percent form August and 2.5 percent year-over-year
  • Consumer sentiment unexpectedly rises in October to highest level since July 2007
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Friday, October 17, 2014

BuilderBytes' MetroIntelligence Economic Update for 10/17/14

Please click here to see the edition of BuilderBytes for 10/17/14 on the Web.


In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Builder confidence falls five points to 54 after four straight months of gains
  • Philadelphia Fed's October Business Outlook Survey growth positive but down from previous month
  • Industrial production rose 1.0 percent in September and 3.2 percent in 3Q 2014
  • Initial unemployment claims dip again to lowest level since 2000
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Tuesday, October 14, 2014

BuilderBytes' MetroIntelligence Economic Update for 10/13/14

Please click here to see the edition of BuilderBytes for 10/13/14 on the Web.

Want to advertise in the newsletter and reach over 130,000 readers?

Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Friday, October 10, 2014

Thursday, October 9, 2014

BuilderBytes' MetroIntelligence Economic Update for 10/9/14

Please click here to see the edition of BuilderBytes for 10/9/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • There were 4.8 job openings on the last business day of August, up from 4.6 million in July
  • Consumer credit use rose in August at slower pace as credit card use declined
  • Mortgage applications rise by 3.8 percent in latest survey as rates decline
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Tuesday, October 7, 2014

BuilderBytes' MetroIntelligence Economic Update for 10/6/14


Please click here to see the edition of BuilderBytes for 10/6/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Payrolls grew by 248,000 in September as unemployment fell below 6.0 percent
  • Job cuts in September fall to lowest level in 14 years
  • Private sector job market reports six straight month of gains over 200,000
  • Initial unemployment claims fall by 8,000 in latest report
  • New factory goods orders plunged in August but were flat minus transportation sector
  • Mortgage applications remain essentially flat in latest report as rates slide
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Friday, October 3, 2014

Job growth rose 248,000 in September as unemployment rate dipped to 5.9 percent

According to the U.S. Bureau of Labor Statistics, total nonfarm payroll employment increased by 248,000 in September, and the unemployment rate declined to 5.9 percent, with most of the gains in professional and business services, retail trade, and health care.

Over the year, the unemployment rate and the number of unemployed persons were down by 1.3 percentage points and 1.9 million, respectively...

The change in total nonfarm payroll employment for July was revised from +212,000 to +243,000, and the change for August was revised from +142,000 to +180,000. With these revisions, employment gains in July and August combined were 69,000 more than previously reported...

Among the major worker groups, unemployment rates declined in September for adult men (5.3 percent), whites (5.1 percent), and Hispanics (6.9 percent). The rates for adult women (5.5 percent), teenagers (20.0 percent), and blacks (11.0 percent) showed little change over the month. The jobless rate for Asians was 4.3 percent (not seasonally adjusted), little changed from a year earlier...

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed in September at 7.1 million. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job...

In September, construction employment continued on an upward trend (+16,000). Within the industry, employment in residential building increased by 6,000. Over the year, construction has added 230,000 jobs...

Average hourly earnings for all employees on private nonfarm payrolls, at $24.53, changed little in September (-1 cent). Over the year, average hourly earnings have risen by 2.0 percent. In September, average hourly earnings of private-sector production and nonsupervisory employees were unchanged at $20.67.

Click here to read the full summary online.

BuilderBytes' MetroIntelligence Economic Update for 10/3/14

Please click here to see the edition of BuilderBytes for 10/3/14 on the Web.


In this separate issue of the MetroIntelligence Economic Update, I covered the following indicators:
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Thursday, October 2, 2014

BuilderBytes' MetroIntelligence Economic Update for 10/2/14

Please click here to see the edition of BuilderBytes for 10/2/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

  • S&P/Case-Shiller Indices show marked slowdown in price increases through July
  • Construction spending falls 0.8 percent in August due to pullback in non-housing and public investments
  • Consumer confidence retreats in September following four months of gains
  • Personal income and spending both rise in August as savings rate dipped
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.