2023 Began With A Boom

Mortgage applications rose during the first weeks of 2023 and the housing market was still going strong. It was reported by the Mortgage Bankers Association (MBA) that the week ending January 13, 2023 mortgage applications rose 27.9% from the week before. This is still 35% below the levels that were reported in January 2022.

“Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall. As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers,” says MBA chief economist Mike Fratantoni.

The end of 2022 the housing market was slowing down due to high home prices and rising mortgage rates that have doubled since 2021. “We’re seeing decade-low readings for just about every index that you can imagine for housing,” says NAHB chief economist Robert Dietz.

The lack of inventory is causing the market to slow and experts say that the months ahead will slow down even more. This is a great time to get out there and purchase a home. Choose a realtor who can help you from start to finish and help find your dream home.

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A Rise In The Number of Women In Construction

 In 2020 the Bureau of Labor Statistics reported 10.9% of the construction workforce were women. The number has since risen to 11% reported last year by the Bureau but only 4% of these workers are involved in skilled trades. Most of the women in the industry are in office and administrative positions.

The National Association of Home Builders’ Professional Women in Building (PWB) Week is coming up. This is an annual event that celebrates women in the residential construction industry. This is a time when the work done in the industry is highlighted as well as the good-paying careers that are available. There is a shortage overall of skilled trade workers in the industry and Tradeswoman Tuesday is the perfect time to reflect on this.

September 13, 2022, there will be an online webinar that can be joined for free. Leading tradeswomen will discuss how women can successfully be a part of the construction industry. They will discuss women in the industry and ideas on how to attract more women to the industry. Kristi Allen, UTAH PWB member and owner of Woodcastle Homes will be the moderator. Joining Allen will be Merideth Balmforth, a master electrician and Katy Higgins an experienced HVAC professional.

There will also be a PWB Week Toolkit which will have other activities to do throughout the day. One of these activities is reading The House that She Built book to children. This book was written and based on real-life tradeswomen that are featured in the webinar. The home she built is in Utah and is the home the book is based on.

“Now is the perfect time for women to explore the construction industry. There is a need for the unique talents and dedication that women bring to any field – including strategies for working smarter, not harder, and for giving their all to whatever they set their minds to. The demand for women in residential construction and service has also never been greater, and the opportunities are there to enter a career that promises great quality of life, earning a good living, having value in the work you do and pride in being a builder and contributor, ” said Balmforth.

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 Natural disasters are becoming more common as climate risks increase. Homes and neighborhoods all around the country are being affected by the record, wildfires, floods, and other natural disasters. Unfortunately because of these increasing risks, a good many insurance companies are decreasing their options, increasing premiums, and even not offering insurance in certain areas. Homeowners and home builders are feeling the effects as seen in the huge gap between insured and uninsured losses.

Because of this growing issue, the National Association of Home Builders (NAHB) began the Climate Change Insurance Task Force in 2021. The task force's purpose was to study these issues and provide a recommended roadmap for the home building industry, focused on identifying gaps and challenges in current insurance products available to homeowners to cover losses from wildfires, flooding, earthquakes, extreme heat, and other climate-related losses and, identified alternatives and recommended next steps to ensure our members and their customers have access to appropriate insurance products.  Their final report was given to the Senior Officers in April 2022 and included introducing more options for multi-state insurance and looking into Congress forming an all-disaster reinsurance policy. This policy would then be supported by the federal government.

Due to the outcome of the study, NAHB will now start meeting with insurance trade groups to see how they stand with the NAHB's high-priority recommendations. They will also develop resources and keep members at the Spring Leadership Meetings aware of any updates.

Through the communication and updates, NAHB is striving to resolve the insurance challenges. They will continually address the changing natural disasters and how they are affecting housing stock in the country. Their goal is to consistently explore the options that will help with these rising concerns at the local, state, and federal government levels.

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Suburban and Exubran Communities See The Fastest Home Building Activity

 

The pandemic has not only changed buyers' perspectives on what they want in a home but also where they want their home to be located. More and more buyers are searching in the suburbs away from crowded urban areas. Surprisingly the multifamily sector is seeing more new home starts in the suburbs and lower-cost markets.

According to the NAHB's current Home Building Geography Index (HBGI) multifamily construction saw double-digit percentage gains in suburban areas in the second quarter of 2021. Large metro areas saw a decline in multifamily new starts. Multifamily residential construction rose 14.3% in small metro urban cores and 25.5% in small metro suburban areas while large metro core areas saw a 0.5% decline.

“The trend of construction shifting from high-density metro areas to more affordable regions, which accelerated at the beginning of the pandemic early last year, appears to be continuing,” said NAHB Chairman Chuck Fowke. “Lower land and labor costs, and lower regulatory burdens in suburban and exurban markets make it more appealing to build in these communities. And workers are increasingly flocking to these areas due to expanded teleworking practices and lower housing costs.”

If you are in the market to purchase a home, now is the time. Get in touch with a Realtor in your local community who can help you with the process.

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A Positive Employment Report for August

The NAHB Eye on Housing reported an increase in nonfarm payroll employment from July to August this year. Nonfarm payroll employment increased to 31 states in August with 235,000. This was at a slower rate than seen in July with an increase of 1,053,000.

August saw a strong increase on a month-over-month basis in California where 104,300 jobs were created, in Texas 39,300 and New York 23,500 were created. Nineteen of the states and the District of Columbia saw a decline with a loss of 64,100 jobs.

Out of the 48 states which reported construction sector job information, 24 of those states saw an increase in both residential and non-residential construction jobs. Colorado, South Dakota and Utah saw no changes while Nevada added 3,000 construction jobs. There was a 4.4% increase in New Hampshire but a 3.7% in Kansas between July and August.

The construction sector jobs also saw an increase of 2.7% by 193,000 jobs on a year-over-year basis. California again came in at the top with 35,900 construction sector jobs while New York lost the most at 11,700 jobs. In percentage comparisons, Rhode Island had the highest growth at 13.9 which Wyoming at the worst at a decline of 7.7%.

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Patios Are Now Built on Over Half of New Homes

The National Association of Home Builders reported that over 60% of new homes built in 2020 have patios. This is the first time since the Census Bureau's 2005 survey that patios have been on over 50% of new homes. There were around 990,000 single-family homes started in 2020 and 61.4% of these homes had patios.

The shares of new homes with patios started to dip in 2007 from 50.4% in 2006 to 48.8% in 2007. The shares did not begin on the upwards trend again until 2011. The big increase from 2019 at 59.6% to 2020 at 61.4% was due to buyers' change in desires in what they want in a home. The pandemic caused us to rethink what is important when it comes to a home. Having a private place to spend outdoors became very important.

The nine US Census divisions also saw a drastic change across the board. Surprisingly the Mountain division was the highest at 74%, next was West South Central at 73%, the South Atlantic at 67%, and the Pacific at 59% all at over 50%. The remaining regions were all under 50% with the East North Central coming in at 47%, the West North Central and East South Central at 41%, New England at 21% and Middle Atlantic at 19%.

As for the construction and size of patios, those also differ. The majority of the patios across the board are constructed of poured concrete, followed closely by concrete and brick pavers. The average size across the board for a patio on a new single-family home was reported to be about 278 square feet. The largest were over 350 square feet in the Mid Atlantic, East North Central and Pacific divisions. The smallest which were under 200 square feet were found in the East South Central division.

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