Owning A Home Is Not Only Smarter Than Renting, It Is Also Cheaper

 Even though house prices are on the rise and mortgage rates are starting to increase, buying a home is still a smart move. ATTOM Data found that owning a home in 2022 is more affordable than renting across most of the country.

“. . . Owning a median-priced home is more affordable than the average rent on a three-bedroom property in 666, or 58 percent, of the 1,154 U.S. counties analyzed for the report. That means major homeownership expenses consume a smaller portion of average local wages than renting.”

Not everyone is in agreement with ATTOM Data. CoreLogic's Single-Family Rent Index revealed that single-family rent saw a huge growth year-over-year. Single-family rent growth hit its sixth consecutive record high. . . . Annual rent growth . . . was more than three times that of a year earlier.

Remember even if the house prices are rising along with rent prices, you benefit from owning. When you rent the increased monthly payments go directly into your landlord's pocket. A monthly mortgage payment is a form of savings in a sense. You are building equity which you will get back once you sell your home. Homeownership also takes up a smaller portion of your paycheck.

If you are in the market to purchase a home, now is a great time. Contact a Realtor who can help you through this process. Having a trusted advisor on your side is the smart way to go.

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Single-Family and Multifamily Ends 2021 With Strong Demand for New Construction

 

The U.S. Department of Housing and Urban Development and the U.S. Census Bureau reported that both single-family and multifamily production increased 11.8% to an annual rate of 1.68 million units. The strong production stems from the high demand for new construction in the housing industry.

This means that 1.68 million homes will be started in the development stage if this pace kept up for the next year. Separated out, single-family increased to 11.3% to 1.17 million seasonally adjusted annual rate and multifamily increased 12.9% at a 506,000 seasonally adjusted annual rate.

Compared to the same time frame of 2020, on a regional and year-to-date basis (January through November of 2021 compared to that same time frame a year ago), combined single-family and multifamily starts are 24.4% higher in the Northeast, 9.6% higher in the Midwest, 15.4% higher in the South and 19.4% higher in the West.

As far as permits, they increased 3.6% to 1.17 million. Single-family permits rose 2.7% to 1.10 million and multifamily increased 5.2% to 609,000 annual paces.

“Mirroring gains in the HMI reading of builder sentiment, single-family housing starts accelerated near the end of 2021 and are up 15.2% year-to-date as demand for new construction remains strong due to a lean inventory of resale housing,” said NAHB Chairman Chuck Fowke. “Policymakers need to help alleviate ongoing building material supply chain bottlenecks that are preventing builders from keeping up with buyer demand.”

“Breaking an eight-year trend, in recent months there have been more single-family homes under construction than multifamily units,” said NAHB Chief Economist Robert Dietz. “Moreover, despite some cooling earlier this year, the continued strength of single-family construction in 2021 means there are now 28% more single-family homes under construction than a year ago. These gains mean single-family completions will increase in 2022, bringing more inventory to market despite a 19% year-over-year rise in construction material costs and longer construction times.”

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Reports Show an Increase in Steel Prices While Lumber and Concrete Prices Fall

 

Good news in the residential construction industry. Both lumber and concrete products have dipped in price. This has caused prices paid for goods used in residential construction ex-energy decreased 0.8% in September (not seasonally adjusted), according to the latest Producer Price Index (PPI) report released by the Bureau of Labor Statistics. The price index of services input to residential construction also saw a dip in pricing in September. This was caused by smaller gross profit margins of building materials retailers.

Even with the decrease in pricing, building materials are still 13% higher than a year earlier and 11.3 higher than reported this January 2021. Service inputs also are up but did not increase as much. There was only a 9.5% increase in the first nine months of 2021 which dropped from the 11.9% increase in the first nine months of 2020.

The Producer Price Index (PPI) for softwood lumber shown seasonally adjusted went down 3.5% in September. This is calculated by taking a survey of the prices paid for goods shipped during the month. The industry leaders predict there will be an increase in softwood lumber prices due to the FLCP (Random Lengths Framing Lumber Composite Price) rising 36% since August 2021.

As for ready-mix concrete (RMC), the PPI went down slightly to 0.5% in September. This is the first decline seen since January 2021. Over the past 12 months, RMC has increased 3% and year-to-date 4.1% in September 2021. The largest decline was seen in the West at 2%, in the Northeast and South at 1% and increased 0.2 in the Midwest.

Gypsum products rose 1% in September making it the seventh consecutive monthly increase. The PPI year-to-date in 2021 increased 16.6% and 22.6% over the past 12 months in September. Gypsum products did see a decrease last year between January and September 2020 of 2.8%.

Steel products rose in pricing 5% in September which followed a 5.1% in August 2021. The monthly change in the steel mill products PPI increased by more than 10% only three times (in 1947, 1948, and 2008) over the 80-year period ending in 2020. Monthly increases have exceeded that mark four times in 2021.

Luckily the prices of services declined 2.7% in September which followed a decrease of 5.7% in August 2021. The monthly decline of 3.7% in trade services input pushed this decline.

If you are in the market for a new construction single-family home now is a good time to contact a local Realtor or local custom builder who can help you with your needs. Leave it to a professional as they are able to navigate this boisterous current housing market.

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U.S. Regions Sees April Single-Family Permit on the Rise

 

The housing market is still booming, the first four months of 2021 the total number of single-family permits that were issued year-to-date among the country rose to 384,196. This makes a 35.6% increase over April 2020's number.

Year-to-date ending April 2021 there was an increase in all U.S. regions in single-family permits. The Midwest had the highest at 49.8%, the Northeast 48.6%, the West 37.7% and the South 30.9%. Multifamily permits were also very healthy. The highest in the Northeast with 45.8%, South 27.7%, West 34.4% and the Midwest 18.4%.

Within the 50 states and the District of Columbia, the increase from April 2020 YTD and April 2021 YTD in single-family permits were seen across the board. The highest rate came in at 332.1% in the District of Columbia. The jump was from 28 single-family permits in April 2020 to 121 single-family permits in April 2021. The ten highest states combined made up 62% of the total single-family permits issued were Alaska, South Dakota, Pennsylvania, Michigan, Minnesota, Vermont, Maine, New York, Wyoming and Utah.

The top 10 local metro areas in both single-family permits and multifamily permits were different. Single-family permits were the highest in Houston, Tx, Dallas-Fort Worth-Arlington, Tx, Phoenix-Mesa-Scottsdale, Az, Atlanta-Sandy Springs-Roswell, Ga, Austin-Round Rock, Tx, Tampa-St. Petersburg-Clearwater, Fl, Charlotte-Concord-Gastonia, Nc-Sc, Nashville-Davidson-Murfreesboro-Franklin, Tn, Orlando-Kissimmee-Sanford, Fl and Jacksonville, Fl. Multifamily permits were the highest in New York-Newark-Jersey City, Ny-Nj-Pa, Austin-Round Rock, Tx, Dallas-Forth Work-Arlington, Tx, Los Angeles-Long Beach-Anaheim, Ca, Seattle-Tacoma-Bellevue, Wa, Washington-Arlington-Alexandria, Dc-Va-Md-Wv, Philadelphia-Camden-Wilmington, Pa-Nj-De-Md, Minneapolis-St. Paul-Bloomington, Mn-Wi, Houston-The Woodlands-Sugar Land, Tx and Denver-Aurora-Lakewood, Co.

Now is a great time to purchase a home. If you are in the market for a new home, contact a local Realtor today.

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