Metrostudy Releases Q2 2015 Residential Remodeling Index (RRI) — RRI Beats Previous Expectations, Reaches Full Recovery in Second Quarter

Posted in In The News, National Housing Market | Posted on 08-18-2015 | Written by Metrostudy News

WASHINGTON, D.C. (August 18, 2015) — Metrostudy, a Hanley Wood company, announced today the release of its second quarter 2015 Residential Remodeling Index (RRI) detailing activity in the remodeling and replacement industry.

The national RRI Activity Index beat previous expectations by reaching full recovery (a reading of 100.0 or more) in second quarter 2015. The index grew by a strong 5.5 percent year-over-year to reach 100.8 in second quarter. This bested previous calls for recovery of the remodeling and replacement industry to occur in third quarter 2015, and demonstrates the continued firming of demand fundamentals across the country. The RRI has now posted thirteen consecutive quarters of positive year-over-year gains since the industry hit bottom at the end of 2011.

Second quarter’s RRI measure also showed a gain of 1.5 percent over first quarter’s revised reading of 99.3, which now represents fourteen consecutive quarter-to-quarter increases. Additionally, the near term forecast for remodeling activity has strengthened over forecasts made in previous RRI releases.

“We saw a really good uptick in the Residential Remodeling Index in second quarter 2015. Not only did the index beat previous estimates for reaching a point of recovery in the remodeling industry, but growth through the first two quarters of 2015 is much stronger than what was observed in 2014, when the overall housing market had cooled,” says Brad Hunter, Chief Economist at Metrostudy. “A big driver of recent remodeling activity has been solid job gains, but the industry stands to benefit even more over the next year from existing home sales hitting an eight-and-a-half year high at the end of second quarter. Stronger resales benefits remodeling activity, as recent homebuyers typically spend more on home improvements than other homeowners. Continued home price appreciation is also encouraging people to put money into their homes.”

Metrostudy produces the RRI to provide the industry visibility into local market remodeling activity, forecasted future activity, and potential demand.  According to the company’s second quarter report, 355 out of 381 Metropolitan Statistical Areas are expected to see year-over-year growth in remodeling and replacement projects in 2015, with average growth of 5 percent.

For more information on accessing the full quarterly report, please email RRI@hanleywood.com.

About the Residential Remodeling Index

The RRI is a quarterly measure of the level of remodeling activity in 381 metropolitan statistical areas (MSA) in the U.S., with the national composite reflecting the national level of activity. “Activity” includes home improvement and replacement projects, but does not include maintenance or projects of less than $1000. The seasonally adjusted index shows the relative level of activity in the geography specified (MSA or national composite) compared to 2007 (the baseline year). A number above 100 indicates a level of remodeling activity higher than the level of activity at the beginning of 2007, which was the peak of remodeling activity in the prior decade.

The index is produced through a statistical model that leverages detailed data on remodeling activity, including household level remodeling permits, and consumer-reported remodeling and replacement projects. Quarterly historical results for the national composite and for each of the 381 Metropolitan Statistical Areas in the U.S. are available back to 2004. In addition, Metrostudy also produces annual estimates of project counts and expenditures as well as forecasts of the quarterly RRI and annual projects and expenditures.

About Metrostudy

Metrostudy, a Hanley Wood company, is the largest provider of comprehensive research and insight for the real estate industry. Builders, developers, banks, manufacturers, retailers and many other industries all rely on Metrostudy’s data and analytics to support strategic business decisions at the local, regional and national market level. www.Metrostudy.com

About Hanley Wood

Hanley Wood is the premier information, media, event, and strategic marketing services company serving the residential, commercial design and construction industries. Utilizing the largest editorial- and analytics-driven construction market database, the company produces powerful market data and insights; award-winning publications, newsletters and websites; high-profile executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.

Metrostudy Releases Q2 2015 Home Building Outlook — Total U.S. Housing Starts Projected to hit 1.07 Million in 2015

Posted in In The News, National Housing Market | Posted on 08-04-2015 | Written by Metrostudy News

WASHINGTON, D.C. (August 5, 2015) — Metrostudy, a Hanley Wood company, announced today the release of its second quarter 2015 Home Building Outlook detailing housing construction trends nationwide.  The Home Building Outlook is the platform for Metrostudy’s national and local forecasts, spotlighting the Top 100 Housing Markets across the United States.

The second quarter update indicates U.S. Housing Starts are expected to advance gradually to hit 1.07 million this year, with 691,000 of those being single family homes as defined by the Commerce Department.  Multi-family housing starts are expected to increase to 379,000 as the rental market continues to exhibit strength.  Metrostudy’s proprietary survey database, which consists of data from over 100 CBSAs and consists of hand-counted lots and newly occupied homes, indicates move-ins were 9% higher in the second quarter of 2015 than a year earlier, while new housing starts rose 11%.

Nationwide new home sales as defined by the Commerce Department are expected to increase 22.4% to 535,000 this year, up from 437,000 in 2014.  New home sales saw a sharper peak-to-trough decline than overall housing starts, and from trough to 2014 have not increased as much, resulting in a statistical catch-up this year.

The best overall new home markets are Denver, Austin, and San Antonio in terms of health and local new home sales forecast.  The southern U.S. dominates in terms of sales volume, with the largest new home markets expected to be Houston, Dallas, and Atlanta.

“The U.S. housing market continues to gradually expand,” says Brad Hunter, Chief Economist of Metrostudy.  “While some in our industry are eager to see more rapid growth, a steady and sustainable rate of increase will be beneficial in the long run.  Demand factors should continue to improve, and as rising rents eventually hit the pain point, more people will begin to consider home ownership.”

Metrostudy produces the Home Building Outlook to provide the building industry with visibility into local residential construction activity as well as official national forecasts.

About Metrostudy

Metrostudy is the leading provider of primary and secondary market information to the housing and residential construction industry. Metrostudy’s actionable business intelligence informs investment decisions that mitigate risk and grow revenue for builders, developers, lenders, suppliers, retailers and manufacturers. It’s the construction industry’s only integrated data intelligence solution supported by the most extensive U.S. geographic coverage. Learn more at Metrostudy.com.

About Hanley Wood

Hanley Wood is the premier company serving the information, media, and marketing needs of the residential, commercial design and construction industry.  Utilizing the largest analytics-and editorially-driven Construction Industry Database, the company provides business intelligence and data driven services. The company produces award-winning media, both digital and print, high-profile executive events, and strategic marketing solutions.  To learn more, visit hanleywood.com.

Builders Expect Steady Increase in Starts in Next 12 to 24 Months

Posted in National Housing Market | Posted on 07-17-2015 | Written by Brad Hunter

Housing starts rose 9.8% in June, driven by the continued upswing in apartment construction (up 28.6%, and remaining volatile).

Single-family construction remained fairly flat (down 0.9%) by comparison. That said, builders are clearly expecting a steady increase in starts in the next 12 to 24 months, based upon the investments that are being made in land and lots.  Single-family lot development is up 21.5% compared with a year ago, based on Metrostudy’s latest national research.

Part of the reason the number of single-family housing starts (a measure of production, not demand) is sluggish is the depletion of lot supplies in many of the most coveted locations around the country.  The supply of new homes is still barely keeping up with demand.  Finished new-home inventory is still at 2.5 months of supply, which is in the historically normal range, but somewhat low for a market that is starting to revive rapidly.  This explains the high rate of price increases on new homes.  As mentioned, builders and developers are pushing hard right now to get more home sites ready for construction in the months ahead.

Here are some of the markets that we have found are increasing single-family home production the most.  You will notice that the former “bubble” markets figure prominently in this list, reflecting the fact that they had fallen so far during the downturn.

  • Northern California         +46.3%
  • Reno                              +44.9%
  • Las Vegas                      +36.5%
  • Naples/Ft. Myers            +27.4%
  • Tampa                           +15.4%
  • Atlanta                           +15.0%
  • Denver/Co. Springs       +14.9%

(all quarterly data, construction of single-family detached homes, versus four quarters ago)

Today’s government release also showed that permitting is up for single-family as well as multifamily construction, which promises further increases in housing production in the last half of the year.  Job growth is strengthening, mortgage rates remain low, and household formation rates are starting to increase.  All of these bode very positively for increased housing demand for the remainder of this year and into 2016.

Brad Hunter is Chief Economist of Metrostudy.

About Metrostudy

Metrostudy, a Hanley Wood company, is the largest provider of comprehensive research and insight for the real estate industry. Builders, developers, banks, manufacturers, retailers and many other industries all rely on Metrostudy’s data and analytics to support strategic business decisions at the local, regional and national market level. To learn more, visit www.Metrostudy.com

About Hanley Wood

Hanley Wood is the premier information, media, event, and strategic marketing services company serving the residential, commercial design and construction industries. Utilizing the largest editorial- and analytics-driven construction market database, the company produces powerful market data and insights; award-winning publications, newsletters and websites; high-profile executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.

Don’t Be Misled by the “Drop” in Housing Starts: Some Markets are Showing Large Increases in Homebuilding

Posted in Economy, National Housing Market | Posted on 06-16-2015 | Written by Metrostudy News

June 16, 2015 – The government’s June report on housing starts showed an 11.1% decline, but that was on the heels of an incredibly strong report the previous month.   

We at Metrostudy have just completed another complete count of builder activity and new-home supply in markets all around the nation, and it provides strong quantitative evidence that the demand for new homes is still recovering, albeit slowly.  Furthermore, builders in most markets are confident that this slow-motion rebound will continue.  That is why builder confidence has improved and lot development is up 21.5% compared with a year ago (from the latest Metrostudy research).

The supply of new homes remains tight.  Finished new-home inventory is still at 2.5 months of supply, which is in the historically normal range, but somewhat low for a market that is starting to revive rapidly.  This explains the high rate of price increases on new homes.

There is much more detail available in Metrostudy’s research than is evident in the government data; some markets are actually showing very strong increases in homebuilding.  Here are some of the markets that we have found are increasing home production the most.  The former “bubble” markets figure prominently in this list, reflecting the fact that they had fallen so far during the downturn.

Recently-reported Metrostudy quarterly data, construction of single-family detached homes, versus four quarters ago.

  • Northern California                         +46.3%
  • Reno                                                     +44.9%
  • Las Vegas                                            +36.5%
  • Naples/Ft. Myers                             +27.4%
  • Tampa                                                  +15.4%
  • Atlanta                                                 +15.0%
  • Denver/Co. Springs                         +14.9%

Brad Hunter is Chief Economist of Metrostudy.

About Metrostudy

Metrostudy, a Hanley Wood company, is the largest provider of comprehensive research and insight for the real estate industry. Builders, developers, banks, manufacturers, retailers and many other industries all rely on Metrostudy’s data and analytics to support strategic business decisions at the local, regional and national market level.  www.Metrostudy.com

About Hanley Wood

Hanley Wood is the premier information, media, event, and strategic marketing services company serving the residential, commercial design and construction industries. Utilizing the largest editorial- and analytics-driven construction market database, the company produces powerful market data and insights; award-winning publications, newsletters and websites; high-profile executive events; and strategic marketing solutions. To learn more, visithanleywood.com.

 

Homeownership Still Correcting: An Analysis by Age Group

Posted in Economy, National Housing Market | Posted on 05-26-2015 | Written by Metrostudy News

  • We are in the strongest period of renter growth going back to the 1960s, when the Census began tracking rent vs. own.
  • Each of the three younger age segments have experienced a shrinking number of home-owning households, totaling a decline of 6.85 million over the last ten years.
  • The 55 to 64 group is unique in that the homeownership rate has shrunk (82 percent to 76 percent), yet the strong growth in the number of households allowed the number of homeowners to grow by 3.9 million.

MAY 2015 – Have you ever taken your temperature and been relieved to find out you had a fever? You say to yourself, “No wonder I feel so bad.” I had a similar moment while researching national homeownership trends, which dropped to a 25-year low of 63.7 percent in 1Q15. What is less often reported is that the number of households has grown steadily during this time from just under 93 million in 1989 to over 123 million in 2014. Furthermore, even though the percentage of homeowners is unchanged compared to 25 years ago, because of overall household growth there are now nearly 20 million more home-owning households in the U.S. compared to 1989.

The problem has to do with trends in the last 9 years. During this time the number of households has grown by nearly 10 million (plus 9 percent), yet the number of home-owning households has grown by only 660,000, which is less than 1 percent growth. Conversely, the number of rental households has grown by 9.2 million or plus 26 percent. This certainly explains why the apartment market has been so robust. Currently, multi-family permits (mostly apartments) account for 36 percent of all permits, compared to an average of 19 percent from 2000 to 2006. This is the strongest period of renter growth going back to the 1960s, when the Census began tracking rent vs. own.

55 Plus

That is one step to understanding the lack of strength in homebuilding, but it doesn’t totally explain the problem. Therefore I analyzed homeownership by age group, particularly over the last 10 years. First of all, in households where the head of household is below 35 years of age, overall household growth has been very flat. This is expected to change as echo boomers (children of baby boomers) age into this category, but for now the household count is very steady. Unfortunately, the number of home-owning households is shrinking, a decline of 1.85 million compared to 2004. This demographic is saddled with student loans, and they appear to value the benefits of renting … for now.

The 35 to 44 age range was easily the most devastated by the Great Recession. Not only is this a shrinking demographic (baby busters), but homeownership has shrunk from 70 percent to 59 percent in the last ten years. The combination of these two forces resulted in a decline of 3.8 million home-owning households in the last ten years. Many of these households may be inclined to own, but they need to repair their credit and get on firmer financial footing. This is also true to some extent of the next older category, 45 to 54, where the number of home-owning households has declined by 1.2 million since 2004. That means each of the three younger age segments have experienced a shrinking number of home-owning households, totaling a decline of 6.85 million over the last ten years.

Below 55

The 55 to 64 group is unique in that the homeownership rate has shrunk (82 percent to 76 percent), yet the strong growth in the number of households allowed the number of homeowners to grow by 3.9 million. These are the baby boomers, and they have driven the move-up market and kept the homebuilding industry off the mat. The oldest demographic at age 65+ is the largest group, nearly 29 million strong as of 2014. The homeownership rate is flat at 80 percent, and the number of home-owning households has grown the most – plus 4.3 million. This group will continue to grow as Americans live longer and as baby-boomers age into this segment. Combined, the two older household segments have contributed 8.2 million new homeowners in the last ten years.

Even though homeownership has continued to decline well after the end of the Great Recession, forces should begin to push the homeownership rate modestly higher in the coming years. When this happens, it will signify an important shift for our industry. This shift combined with a growing economy (hopefully), will fuel a stronger homebuilding market and begin to take away some of the energy that has been dedicated to apartments. This will be the aspirin we need to shed the low-grade temperature we’ve been running as an industry over the last few years.

Ben Sage, Director of Metrostudy’s Mid-Atlantic Region, has been researching and analyzing housing markets since 1994. He regularly meets and consults with many of the top homebuilders in the country as well as with lenders, developers, investors, and utilities concerning trends in the local economy and their effect on the real estate market. Ben can be reached at bsage@metrostudy.com. For more information, visit www.metrostudy.com.

 

 

NATIONAL HOUSING MARKET: Metrostudy Releases 1Q15 Home Building Outlook

Posted in In The News, National Housing Market | Posted on 05-11-2015 | Written by Metrostudy News

Total U.S. Housing Starts Projected to hit 1.1 Million in 2015

 

WASHINGTON, D.C. (May 11, 2015) — Metrostudy, a Hanley Wood company, announced today the release of its first quarter 2015 Home Building Outlook detailing housing construction trends nationwide.  The Home Building Outlook is the platform for Metrostudy’s national and local forecasts, spotlighting the Top 100 Housing Markets across the United States.

The first quarter update indicates U.S. Housing Starts are expected to advance gradually to hit 1.1 million this year, with 715,000 of those being single family homes as defined by the Commerce Department.  Multi-family housing starts are expected to increase to 385,000 as the rental market continues to exhibit strength.

New Home Sales are expected to increase 18.8% to 519,000 this year, up from 437,000 in 2014.  The best overall new home markets are Denver, Austin, and The Villages (FL) in terms of health and local new home sales forecast.  The southern U.S. dominates in terms of sales volume, with the largest new home markets expected to be Houston, Dallas, and Atlanta.

“We continue to forecast a gradual recovery in construction,” says Brad Hunter, Chief Economist of Metrostudy.  “Our forecast of eventual rising new home demand is founded on a reversion to long-standing typical behavior patterns.   One of these relates to the “doubling-up” of households during and after an extended recession.  But we are now seeing some evidence that those households are beginning to split apart once again, increasing demand for housing.  As rising rents eventually hit the pain point, more people will begin to consider home ownership again.”

Metrostudy produces the Home Building Outlook to provide the building industry with visibility into local residential construction activity as well as official national forecasts. 

About Metrostudy

Metrostudy, a Hanley Wood company, is the largest provider of comprehensive research and insight for the real estate industry. Builders, developers, banks, manufacturers, retailers and many other industries all rely on Metrostudy’s data and analytics to support strategic business decisions at the local, regional and national market level.  www.Metrostudy.com

About Hanley Wood

Hanley Wood is the premier information, media, event, and strategic marketing services company serving the residential, commercial design and construction industries. Utilizing the largest editorial- and analytics-driven construction market database, the company produces powerful market data and insights; award-winning publications, newsletters and websites; high-profile executive events; and strategic marketing solutions. To learn more, visithanleywood.com.

See more at: http://www.hanleywood.com/pressroom/metrostudy-releases-q1-2015-home-building-outlook#sthash.IQIEeAnF.dpuf

Single-Family New Home Sales Up Year-Over-Year in January

Posted in National Housing Market | Posted on 02-25-2015 | Written by Metrostudy News

Sales of new single-family houses in January were at a seasonally adjusted annual rate of 481,000, according to estimates released today by the U.S. Census Bureau. This is 0.2% below the revised December rate of 482,000, but is 5.3 percent above the January 2014 estimate of 457,000. Metrostudy’s Brad Hunter breaks down sales expectations for 2015.

 

Sales of new single-family houses in January 2015 were at a seasonally adjusted annual rate of 481,000, according to estimates released today by the U.S. Census Bureau.  This is 0.2% (±22.2%)* below the revised December rate of 482,000, but is 5.3% (±22.1%)* above the January 2014 estimate of 457,000.

nhs jan

Read the Full Article on Builder 

 

 

In Tepid Housing Market, Builders Cater to Desires of Well-Off

Posted in National Housing Market | Posted on 02-25-2015 | Written by Metrostudy News

25million1-web-superJumbo

NEWTOWN SQUARE, Pa. — Lisa Gray spent a few months searching for a home that would span the generations, one where her two sons would want to bring friends throughout their teenage years and that her aging parents could navigate with ease.

She settled on a two-story house here tailored to include a game room for the boys and a first-floor guest bedroom to avoid the need for climbing stairs. The cost of most homes in this new development? Roughly $1 million — and up.

“I thought I would just build and make it exactly like I want,” said Ms. Gray, a managing partner at a venture capital firm, who moved into her gray-speckled-stone home three months ago.

Read Full Article from The New York Times

Rocky Mountain Way: Four Markets Climbing to New Heights

Posted in National Housing Market | Posted on 02-19-2015 | Written by Metrostudy News

Most of the Rocky Mountain Region didn’t have an end-of-year sales slump. In fact, after a strong fourth-quarter in most of the area, the Rockies are ready for consistent demand through 2015. So what’s their secret?

The cold can’t keep buyers away in the Rockies. The Boise, Denver, Salt Lake City, and St. George markets collectively saw significant closings in the new home market throughout 2014, and while some of the Nation’s hottest metros had a slower end to the year, the area kept a steady sales pace in the fourth-quarter with promise of continued momentum into this year. While prices have spiked enormously in markets seeing similar demand nationwide, most of the Rocky Mountain region held price points somewhat steady throughout the year. What’s the secret to the four metros set-up for solid sales numbers in 2014? Here are some of the trends.

bdms rri

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Single-Family Starts Down in January, Up Year-Over-Year

Posted in National Housing Market | Posted on 02-18-2015 | Written by Metrostudy News

The Department of Commerce reported today that single-family starts fell 6.7% in January, but Metrostudy predicts builders are gearing up for more production in 2015.

The numbers released today by the Department of Commerce show that single-family housing starts fell in January by 6.7% (plus or minus 10.6%) compared with the previous month (seasonally-adjusted).  Multifamily construction meanwhile continued to rise, up 12.1% on the month (plus or minus 25.4%). Comparing versus a year ago, single-family starts are up 16.3% (plus or minus 12.0%).

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