The Housing Chronicles Blog: 11/1/14 - 12/1/14

Thursday, November 27, 2014

Happy Thanksgiving 2014

Happy Thanksgiving from MetroIntelligence and Housing Chronicles! Think you know everything about Thanksgiving from what you learned long ago in elementary school?  It’s actually a bit more complicated than you might’ve thought.

In the United States, the modern Thanksgiving holiday tradition traces its origins to a 1621 celebration at Plymouth in present-day Massachusetts.   However, there is also evidence for an earlier harvest celebration on the continent by Spanish explorers in Florida during 1565, as well as thanksgiving feasts in the Virgina Colony.

The initial thanksgiving observance at Virginia in 1619 was prompted by the colonists’ leaders on the anniversary of the settlement. The 1621 Plymouth feast and thanksgiving was prompted by a good harvest. In later years, the tradition was continued by civil leaders such as Gov. Bradford, who planned a thanksgiving celebration and fast in 1623. While initially the Plymouth colony did not have enough food to feed half of the 102 colonists, the Wampanoag Native Americans helped the Pilgrims by providing seeds and teaching them how to fish.   Still, the practice of holding an annual harvest festival like this did not become a regular affair in New England until the late 1660s.

According to historian Jeremy Bangs, director of the Leiden American Pilgrim Museum, the Pilgrims may have been influenced by watching the annual services of Thanksgiving for the relief of the siege of Leiden, The Netherlands, in 1574, while they were staying in Leiden.

Thanksgiving in North America had originated from a mix of European and Native traditions.Typically in Europe, festivals were held before and after the harvest cycles to give thanks for a good harvest, and to rejoice together after much hard work with the rest of the community.  At the time, Native Americans had also celebrated the end of a harvest season.

When Europeans first arrived to the Americas, they brought with them their own harvest festival traditions from Europe, celebrating their safe voyage, peace and good harvest.Though the origins of the holiday in both Canada and the United States are similar, Americans do not typically celebrate the contributions made in Newfoundland, while Canadians do not celebrate the contributions made in Plymouth, Massachusetts.
Thanksgiving in the United States, much like in Canada, was observed on various dates throughout history. 

The dates of Thanksgiving in the era of the Founding Fathers until the time of Lincoln had been decided by each state on various dates. The first Thanksgiving celebrated on the same date by all states was in 1863 by presidential proclamation. The final Thursday in November had become the customary date of Thanksgiving in most U.S. states by the beginning of the 20th century.

And so, in an effort by President Abraham Lincoln (influenced by the campaigning of author Sarah Josepha Hale who wrote letters to politicians for around 40 years trying to make it an official holiday), to foster a sense of American unity between the Northern and Southern states, proclaimed the date to be the final Thursday in November.

It was not until December 26, 1941, that the unified date changed to the fourth Thursday (and not always final) in November -- this time by federal legislation. President Franklin D. Roosevelt, after two years earlier offering his own proclamation to move the date earlier, with the reason of giving the country an economic boost, agreed to sign a bill into law with Congress, making Thanksgiving a national holiday on the fourth (not final) Thursday in November.

Source:  Wikipedia

Tuesday, November 25, 2014

BuilderBytes' MetroIntelligence Economic Update for 11/25/14

Please click here to see the edition of BuilderBytes for 11/25/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Philadelphia Fed Business Outlook Survey increased notably in November
  • Mortgage applications rise by nearly five percent as rates remain mostly stable in latest survey
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Monday, November 24, 2014

2014 in Review: A Slow, Gradual Return to Normal

Last year, I wrote about a housing rebound that seemed to finally have solid legs after a few false starts since the Great Recession.  The good news for 2014 is that both the economy and the housing market have continued their slow yet gradual climb back to normal.

Indeed, the NAHB’s Leading Markets Index, which measures how well metropolitan areas are performing relative to their last ‘normal’ market, rose to .90 in the third quarter of 2014.  This means that the combination of permits, prices and employment levels are back to 90 percent of where they should be at a national level, although most of this rebound has been due to new permits and rising prices more than robust, uniform employment gains.

Still, the national job market continues to improve strongly, adding well over 200,000 jobs per month for most of the year, thereby bringing the official unemployment rate down to 5.8 percent.  Since this rate of growth is about double the pace required to reduce unemployment and under-employment, wages could soon come under pressure to rise after years of being stuck near neutral, which could counter-act the impact of future interest rate hikes and higher housing prices.

At the same time, the economic rebound has not been consistent across the country, with much stronger job growth in those states which have benefitted from the domestic energy boom, military or agricultural spending, or include small college towns.   Conversely, those states with weaker labor markets – such as Arizona, Nevada, Rhode Island or New Jersey – also continue to exhibit weaker housing fundamentals.

Nonetheless, from a confidence standpoint, both builders and consumers have been reporting positive attitudes, with the NAHB Housing Market Index rising four points in November to 58, with even stronger gains for the index measuring current sales conditions.  Consumer sentiment has recently been even stronger, rising in November to more than a seven-year high even though respondents don’t expect future income gains to keep up with inflation.

While overall housing starts did take an unexpected but small dip in October from the previous month, they still rose by nearly eight percent year-over-year.  At the same time, starts for single-family homes were still up by just over four percent between September and October to the highest rate since November of 2013.   But it was really building permits – often a forward-looking indicator of market activity – which revealed gradually building strength for housing, rising by nearly five percent in October to the highest level in nearly 6.5 years.

New home sales have also continued to climb, rising by 17 percent between September of 2013 and 2014 to an annual rate of 467,000 units, which would take 5.3 months to sell at current sales rates, down from 5.5 months the previous year.  New home median prices, however, fell to $259,000 from $269,800 during that same time period, most likely due to a higher percentage of sales in the South.

For existing homes, sales rose in October for the second straight month after a challenging spring and relatively flat summer, reaching their highest annual rate since September of 2013 as well as being above year-over-year levels for the first time in over a year.  At the same time, inventory levels fell to a 5.1-month supply, which was the lowest supply timeline since last March.  Existing home prices reached $208,300 in October, up by 5.5 percent over the same month of 2013 and marking the 32nd straight month of year-over-year price gains.

The remodeling market is also strong, with the NAHB Remodeling Market Index matching its record high of 57 in the third quarter of 2014 even after a dip in activity earlier in the year due to an unusually harsh winter.

Looking ahead to 2015, forecasts are generally calling for continuing expansion for both the U.S. economy and its housing market.  U.S. GDP is expected to sustain its 3.0 percent growth rate due to ongoing fiscal stimulus, lower energy costs (especially for gasoline), slowly easing credit conditions and more positive business and consumer confidence.  However, a stronger dollar will likely dampen exports, and the Fed will probably start boosting its Federal funds rate sometime in 2015.

As for housing, look for housing starts to rise by another 20 percent in 2015, with most of that increase noted for single-family homes built to fulfill a large supply of pent-up supply over the past few years.  Still, as household formations increase in 2015, look for the rental market in urban markets to remain tight as rent growth exceeds inflation.

Friday, November 21, 2014

BuilderBytes' MetroIntelligence Economic Update for 11/21/14

Please click here to see the edition of BuilderBytes for 11/21/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Existing home sales rose in October to highest annual rate in over a year
  • Leading Economic Index rose sharply in October as economic expansion continues
  • CPI unchanged in October, up by 1.7 percent over previous 12 months
  • Initial unemployment claims fall by 2,000 in latest report
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Thursday, November 20, 2014

BuilderBytes' MetroIntelligence Economic Update for 11/20/14

Please click here to see the edition of BuilderBytes for 11/20/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Builder confidence rises four points in November to 58
  • Overall housing starts dipped in October even as single-family starts rose four percent 
  • Building permits rose sharply in October to six-year high
  • Producer Price Index up by 0.2 percent in October and just 1.5 percent over previous 12 months
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Friday, November 14, 2014

November column for Builder & Developer magazine now online

My column for the November 2014 issue of Builder and Developer magazine is now posted online.

For this issue, entitled "Where are the First-Tme Homebuyers?" I was struck by the decline in first-time homebuyers in recent months and wanted to investigate further.  An excerpt:
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 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...
To read the entire column, click here.

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

BuilderBytes' MetroIntelligence Economic Update for 11/14/14

Please click here to see the edition of BuilderBytes for 11/14/14 on the Web.


In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Initial unemployment claims rise by 12,000 in latest report
  • Job openings declined to 4.7 million in September even as quits rate rose
  • Wholesale inventories rose more than expected in September
  • Mortgage applications fall 0.9 percent in latest survey as rates rebounds slightly
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Thursday, November 13, 2014

BuilderBytes' MetroIntelligence Economic Update for 11/13/14

Please click here to see the edition of BuilderBytes for 11/13/14 on the Web.

In a 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.

Tuesday, November 11, 2014

BuilderBytes' MetroIntelligence Economic Update for 11/11/14

Please click here to see the edition of BuilderBytes for 11/11/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicator:
  • Employment rose by 214,000 in October as unemployment edged down to 5.8 percent
In addition, there was also the following release:


Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Friday, November 7, 2014

Employment rose by 214,000 in October as unemployment rate edged down to 5.8 percent

It looks like the trend towards continued strong job growth continued in October.  From today's press release:
Total nonfarm payroll employment rose by 214,000 in October, and the unemployment rate edged down to 5.8 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in food services and drinking places, retail trade, and health care...

Since the beginning of the year, the unemployment rate and the number of unemployed persons have declined by 0.8 percentage point and 1.2 million, respectively.

Among the major worker groups, the unemployment rate for whites declined to 4.8 percent in October. The rates for adult men (5.1 percent), adult women (5.4 percent), teenagers (18.6 percent), blacks (10.9 percent), and Hispanics (6.8 percent) changed little over the month. The jobless rate for Asians was 5.0 percent (not seasonally adjusted), little changed from a year earlier.

In October, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 2.9 million. These individuals accounted for 32.0 percent of the unemployed. Over the past 12 months, the number of long-term unemployed has declined by 1.1 million.

The civilian labor force participation rate was little changed at 62.8 percent in October and has been essentially flat since April. The employment-population ratio increased to 59.2 percent in October... 

Employment also continued to trend up in transportation and warehousing (+13,000) and construction (+12,000)...

Over the year, average hourly earnings have risen by 2.0 percent...

BuilderBytes' MetroIntelligence Economic Update for 11/7/14

Please click here to see the edition of BuilderBytes for 11/7/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Planned job cuts rose sharply in October
  • Initial unemployment claims dip by 10,000 in latest report
  • Productivity rose by 2.0 percent in 3Q 2014 as output rose faster than hours worked
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Thursday, November 6, 2014

BuilderBytes' MetroIntelligence Economic Update for 11/6/14

Please click here to see the edition of BuilderBytes for 11/6/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • ADP Employment Report shows 230,000 new jobs from September to October
  • Manufacturing sector index continued to expand in September for 17th straight month
  • Service sector economy continued to grow in September, but rate of expansion slowing down
  • Durable goods orders fell for second straight month in September; decline likely to be temporary
  • Mortgage applications fall by 2.6 percent in latest survey as rates rise slightly
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Wednesday, November 5, 2014

NAHB: Single-Family Production Poised to Take Off in 2015

According to the NAHB's 2014 Fall Construction Forecast Webinar on October 31st, "a growing economy, rising household formations, low mortgage rates and pent-up demand will help single-family housing production to rev up in 2015 while a growth in renters will keep the multifamily market at cruising altitude or higher."

From the press release:
NAHB is forecasting 991,000 total housing starts in 2014, up 6.6 percent from 930,000 units last year. Single-family production is expected to rise 2.5 percent this year to 637,000 units, increase an additional 26 percent next year to 802,000 and reach 1.1 million in 2016.

Setting the 2000-2003 period as a benchmark for normal housing activity when single-family production averaged 1.3 million units annually, single-family starts are expected to steadily rise from 48 percent of what is considered a typical market in the third quarter of 2014 to 90 percent of normal by the fourth quarter of 2016.
Multifamily starts, which NAHB Chief Economist David Crowe said are now at a normal level of production, are projected to increase 15 percent in 2014 to 356,000 units and hold steady next year.

Meanwhile, the NAHB Remodeling Market Index, which averages ratings of current remodeling activity with indicators of future activity, matched its all-time high of 57 in the third quarter of 2014 and has been above 50 for six consecutive quarters. A reading above 50 indicates that more remodelers report market activity is higher (compared to the prior quarter) than report it is lower.

NAHB is forecasting that residential remodeling will post a 3.4 percent decline in 2014 over last year, due in large part to slow activity in the first quarter caused by an unusual harsh winter throughout much of the nation. Residential remodeling activity is expected to rise 2.7 percent in 2015 and an additional 1.3 percent in 2016."

Tuesday, November 4, 2014

BuilderBytes' MetroIntelligence Economic Update for 11/4/14

Please click here to see the edition of BuilderBytes for 11/4/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Construction spending fell for second straight month in September, but August decline revised lower
  • Consumer confidence rises again in October to highest level since July 2007
  • Personal income rose 0.2 percent in September as consumer spending fell by similar amount
  • Chicago Business Barometer rose to one-year high in October
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.