Market Continues Impressive Resilience
A surge in multi-family housing starts, as well as an increase in single-family starts, were among the highlights of the latest round of positive housing market statistics, the National Association of Home Builders reported. Noting that residential fixed investment grew at a rate of 7.4% in the second quarter, the NAHB reported that, in July 2001, the actual number of housing units started 155,400 was greater than for any calendar month since the summer of 1998. The association added that it is "quite likely" that single-family starts for all of 2001 will be greater than the annual total of 1.231 million in 2000. New-home sales, which remain "robust," will easily exceed the record of 885,000 in 1998, the NAHB predicted.
Even with homeownership rates continuing at near-record levels most Americans think it's a good time to buy a home, compared to a year ago. According to the 10th annual Fannie Mae National Housing Survey, 29% of those surveyed thought that now is a very good time to buy a home. Only 19% shared those feelings when the survey was conducted in 2000. One in four respondents said they were very likely to buy a home in the next three years, while 43% of renters said it was likely they would purchase a home in the next three years. "Down payment and closing costs are perceived as less of an obstacle to homeownership than in the past," observed the National Association of Realtors.
Survey: Remodeling Market 'Holding Steady'
The remodeling market "remained steady" for the first two quarters of 2001, but is starting to show signs of slowing down, according to a new survey conducted by the National Association of Home Builders.
The survey, based on the responses of some 1,500 remodelers, forms the basis of the NAHB's Remodeling Market Index (RMI), a new quarterly economic index created to measure current and future activity in the remodeling market. Remodeling activity currently accounts for about 2% of the nation's Gross Domestic Product (GDP), and roughly 60% of total spending on housing, the NAHB observed. The association is forecasting that remodeling expenditures will exceed $159 billion this year, and rise to more than $167 billion in 2002 (see graph above).
The RMI for current market conditions for the first two quarters of this year remained steady, with a 55 rating, the NAHB said. Future expectations for remodeling remained virtually flat, at a rating of 57 for this same time period.
The current remodeling index is based on responses regarding the
existing demand for remodeling compared to three months earlier.
The future expectations index is based on questions that ask for
the volume of "calls for bid," the amount of work committed for the
next three months, the backlog of remodeling jobs and the number of
proposals for future work.
Between the first and second quarter of this year, the ratings for current market conditions declined in three of the Census regions of the country, except for the Midwest, where the rating increased from 53.3 to 55.6. The largest drop occurred in the Northeast, where the rating fell from 63.2 to 58.1.
Ratings for future remodeling market expectations declined from the first quarter to the second quarter during the first half of the year by more than four points in the Northeast, from 66.4 to 62.0, and by nearly five points in the West, from 59.2 to 54.4. Ratings for the Midwest increased from 54.2 to 58.1, while they increased for the South from 55.7 to 56.7 for this same time period.