Posted on 08/16/2022 2:55:43 AM PDT by EBH
National Association of Home Builders Discusses Economics and Housing Policy
Builder confidence fell for the eighth straight month in August as elevated interest rates, ongoing supply chain problems and high home prices continue to exacerbate housing affordability challenges. In another sign that a declining housing market has failed to bottom out, builder confidence in the market for newly built single-family homes fell six points in August to 49, marking the first time since May 2020 that the index fell below the key break-even measure of 50, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).
The August buyer traffic number in the builder survey was 32, the lowest level since April 2014 with the exception of the spring of 2020 when the pandemic first hit. Tighter monetary policy from the Federal Reserve and persistently elevated construction costs has brought on a housing recession. The total volume of single-family starts will post a decline in 2022, the first such decrease since 2011. However, as signs grow that the rate of inflation is near peaking, long-term interest rates have stabilized, which will provide some stability for the demand-side of the market in the coming months.
Roughly one-in-five (19%) home builders in the HMI survey reported reducing prices in the past month to increase sales or limit cancellations. The median price reduction was 5% for those reporting using such incentives. Meanwhile, 69% of builders reported higher interest rates as the reason behind falling housing demand, the top impact cited in the survey.
Derived from a monthly survey that NAHB has been conducting for more than 35 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
All three HMI components posted declines in August and each fell to their lowest level since May 2020. Current sales conditions dropped seven points to 57, sales expectations in the next six months declined two points to 47 and traffic of prospective buyers fell five points to 32.
Looking at the three-month moving averages for regional HMI scores, the Northeast fell nine points to 56, the Midwest dropped three points to 49, the South fell seven points to 63 and the West posted an 11-point decline to 51.
The HMI tables can be found at nahb.org/hmi.
Joe is in the WH--illegally.
The Deep State is launching full-scale attacks on Trump...and they will not stop until he decides not to run again.
The economy is dicey at best.
Because of zoom calls, employees can live anywhere...so where do you build?
Cities are threatened with COVID and Monkeypox lockdowns.
Other than that, things look pretty darned good.
(Builder confidence fell for the eighth straight month in August)
Build Back Better
This AND
Higher gas ⛽ prices
Higher food prices
War - talk of nuclear war
Vote Democrat and keep it going!
Failure is starting to show. Can the media keep people believing everything is happy and great?
I do not believe so. I belong to a small business women’s group and a few members in the LUXERY services area are reporting a drop of over 60% in sales. These ladies have never been through a recession, let alone a recession. Trying to explain to them to raise rates to exclusive service levels and repackage or remove loss leaders is a tough sell.
COVID lockdowns let people get a taste of what life could be working away from the office. And while it isn't perfect, it saves a lot of time, gas, and headaches. And for employers, it saves a lot of office-related expenses (though many managers will have to adapt to a lack of eyes-on control).
On top of that, people realize that there are a lot of silly expenses they can do without.
All said, the biggest problem Americans faces is meddling by an incompetent government, both elected and permanent. The Deep State (which put Joe Biden in place over the wishes of the voters) is in a very dangerous place. It feels threatened by Trump and his supporters (and rightly so) and, at the same time, believes it should take over the country in autocratic style.
I don't worry about recession so much as just uncertainty. The future is always difficult to predict, but, right now, making accurate predictions is impossible.
The US has been in a shift away from the cities ever since ANTIFA riots. Covid gave people another reason to move to the country. The ability to work from home was the third.
The issue is from 2008-2018 we UNDER BUILT housing units based on the need for a population of 330 million. Houses on average only last for 75 years. They need to be replaced. That is why there are so few houses, even here in NH that still exist from the 1700s. They burn down. Get flooded. They get torn down and replaced.
The millenials(20 somethings) and generation X (30 somethings) were happy living in an apartment until the last two years. Now, many have finally decided to buy a single family home.
The other major demographic shift is that those GenX people are not having kids like older past generations did. If they do choose to have kids, they are waiting until they are older. Having children is one of the main reasons people move out of an apartment to the suburbs. They want to be some place where the schools are better and the Golden Doogle can crap in the back yard.
The other major demographic change is that the end of the BABY BOOMERS are getting to retirement stage(me 1963). So, people like me are thinking we no longer need a 2800 sq ft house. There are not more baby boomers after me. So, there are going to be LESS of a percentage of people that need a big house. So, we are going to INCREASE the percentage of MULTI FAMILY housing units. We are going to DECREASE the percentage of SINGLE FAMILY stand alone houses because there will not be the demand for dingle family that there has been for the last 50 years.
Cannot be true. Joe Biden went on a week long vacation after saying 0% inflation in July and he spent 5 hours at the White before leaving for another vacation in Delaware.
He would not leave if there were any problems....
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