County Level Permit Activity

June 12, 2014

The Census Bureau recently released annual estimates of building permits issued at the county level. In 2013, 1,807 counties and county equivalents saw an increase in the number of single family permits issued over the prior year while 858 saw a decrease. County equivalents include the 64 parishes in Louisiana, 16 boroughs in Alaska, and 42 independent cities.

The map below provides a visual of the change in annual permit estimates in 2013 for single family units. Counties in blue saw an increase in the number of permits issued for single family housing units while the counties in red saw a decrease in the number of permits issued for single family housing units. Counties that saw no change, no permit activity, or with insufficient data are white.

Chart_1

In 2013, 820 counties and county equivalents saw an increase in the number of multifamily permits issued over the prior year while 675 saw a decrease. One thousand four hundred and seventy-nine counties saw no multifamily permit activity in 2012 and 2013.

The map below provides a visual of the change in annual permit estimates in 2013 for multifamily units. Again, counties in blue saw an increase in the number of permits issued for multifamily housing units while the counties in red saw a decrease in the number of permits issued for single-family housing units. Counties that saw no change, no permit activity, or with insufficient data are white.

Chart_2

The issuance of housing permits is a key metric for the housing industry. The number of housing permits issued has risen in recent months and are over one million for the third consecutive month.

The Census Bureau collects data on building permits issued for new privately-owned residential housing units. The statistics are compiled through the Building Permit Survey (BPS) which is sent to permit-issuing jurisdictions. NAHB makes the most recent data available to the public for the states, the District of Columbia, and metropolitan statistical areas in the Construction Statistics section of NAHB.org.


Single-Family Built for Rent Market Remains Off Recent Market Highs

May 26, 2014

Single-family starts built-for-rent were effectively unchanged at 4,000 starts for the first quarter of 2014. While the market share of built-for-rent single-family units remains elevated, the share and count of starts appear to be declining off post-Great Recession highs.

According to data from the Census Bureau’s Quarterly Starts and Completions by Purpose and Design and NAHB analysis, the market share of single-family homes built-for-rent, as measured on a one-year moving average, stands at 3.3% for the first quarter of 2014. This remains higher than the historical average of 2.8% but is down from the 5.8% registered a year ago.

SF built for rent_May 14

With the onset of the Great Recession, the share of built-for-rent homes rose, with a dip in the percentage during the homebuyer tax credit period.

Despite the elevated market concentration, the total number of single-family starts built-for-rent remains fairly low – only 20,000 homes started during the last four quarters. It appears the market is returning to historical averages after recent peaks in this form of construction.

Of course, the built-for-rent share of single-family homes is considerably smaller than the single-family home portion of the rental housing stock, which is 29% according to the 2011 American Community Survey. The reason for this is that as single-family homes age, they often transition to the rental housing stock.


Mortgage Delinquency Rates Fall

May 20, 2014

Data released by the Mortgage Bankers Association (MBA) indicates that the delinquency rate for mortgage loans on one-to-four-unit residential properties, considered single-family properties, decreased to a not seasonally adjusted rate of 5.69% of all loans outstanding at the end of the first quarter of 2014, 106 basis points below the 6.75% delinquency rate recorded in the first quarter of 2013. This level represents the lowest level since the first quarter of 2008.

According to MBA’s National Delinquency Survey, the four-quarter decrease in the delinquency rate reflected a decline across each stage of delinquency. In addition, the foreclosure inventory also fell. As Figure 1 below illustrates, the percentage of all loans past due fell by 106 basis points over the past four quarters. Loans 30-59 days past due fell by 45 basis points, loans 60-89 days past due fell by 15 basis points, and loans 90 or more days past due decreased by 45 basis points. The foreclosure inventory fell by 90 basis points over the past four quarters. In sum, the serious delinquency rate, the portion of loans either 90 or more days late or in the foreclosure inventory decreased by 135 basis points over the past year.

Presentation1

The recent four-quarter decline in the portion of loans that are seriously delinquent furthers a trend in place since 2010. Figure 2 compares the share of loans that became seriously delinquent based on their origination year with the annual average serious delinquency rate. According to this illustration, the share of single-family loans considered seriously delinquent peaked in 2010 at 9.0%. Since 2010, the proportion of seriously delinquent mortgages has fallen to 5.8%.

The extended decline in the percentage of loans considered seriously delinquent partially reflects a decrease in serious delinquency among loans originated in more recent years. According to the figure below, an average of 4.0% of loans originated in 2005 became seriously delinquent. However, 10.6% of loans originated in 2006, 11.5% of loans originated in 2007, and 6.4% of loans originated in 2008 ultimately became seriously delinquent. In contrast, 1.0% of loans originated in 2009 became seriously delinquent. Since 2010, less than 1.0% of originated loans have become seriously delinquent.

Presentation2


Concentration of Single-Family Housing 2005 to 2012

May 5, 2014

In a series of posts, NAHB examined key housing statistics from the 2012 American Community Survey (ACS) for metro areas in the United States. One statistic that drew interest was the share of homeowners living in single-family detached housing. This post expands that analysis by looking at the share of total housing units (owned and rented) from 2005 to 2012.

The share of single-family detached housing is calculated by taking the total number of single-family detached units divided by the total number of housing units. The share of single-family detached housing or single-family concentration gives a snapshot of the housing stock for a specified geography.

At the national level the single-family concentration has changed very little in recent years. According to the ACS, in 2012 the concentration was 61.6% compared 61.1% in 2005.

Chart_1

The small movement in the single-family concentration at the national level is not surprising. The U.S housing stock is aging. According to the latest data from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of an owner-occupied home was 35 years in 2011. The median age reported in the 1985 AHS was only 23 years.

Therefore, if the single-family concentration is not effected in large order by removing housing units, changes are instead the result of the growth in new construction of single-family housing relative multifamily housing. For example, an increase in the single-family concentration is the result of more single-family housing being added than multifamily housing. Conversely, a decrease in the single-family concentration is the result of fewer single-family housing being added than multifamily housing.

Although the single-family concentration showed little movement from 2005 to 2012 at the national level, several metro areas did experience noticeable change. Metro areas with the largest percentage point increase in the single-family concentration from 2005 to 2012 are shown below.

Chart_2

One trait shared by the metro areas in the top ten was above average population growth. From 2005 to 2012, all metro areas in the top ten with the exception of Yakima, WA experienced double digit population growth. The population growth in Auburn-Opelika, AL during the time period was over 24%.

Population growth alone cannot explain the large increases in the single-family concentration. Land use regulation and availability also play a role.  Higher concentrations are typical of locations with less dense developments.

MSAs with the largest percentage point decrease in the single-family concentration from 2005 to 2012 are shown below.

Chart_3

The metro areas in the bottom ten do not share the trait of average population growth. It is worth keeping in mind that population growth can produce a falling single-family concentration, if the growth results in apartments rather than single-family homes. For example for the list above, Greenville, NC experienced population growth over 25% while Victoria, TX experienced population growth of only 1%. Thus, land use regulation and availability play leading roles. Lower concentrations are typical of locations with denser developments.

Although the national figures saw little movement from 2005 to 2012, certain metro areas saw noticeable movement. These figures allow us to examine the relative growth in single-family and multifamily housing units for each metro area.


Jobs Created in the U.S. When a Home is Built

May 2, 2014

In an article published the first day of this month, NAHB released new estimates of the impact that building single-family and multifamily homes has on the U.S. economy. The new estimates show that building an average single-family home generates 2.97 jobs, measured in full-time equivalents (enough work to keep one worker employed for a year).

A substantial share of this is employment for construction workers. But also included is employment in firms that manufacture building products, transport and sell products, and provide professional services to home builders and buyers (e.g., architects and real estate agents). A breakdown by industry is shown below, along with the wages and business profits generated in the process.Single-familyWages and profits are subject to a variety of taxes and fees. The national impacts of building an average single-family home include $74,354 in federal taxes and $36,603 in state and local fees and taxes, for a total of $110,957 in revenue for governments at all levels.

The article also shows equivalent estimates for building an average rental apartment, including 1.13 (full-time equivalent) jobs, with a breakdown by industry as shown below.MultifamilyEstimates of wages and jobs garner the most attention, but in industries like construction and real estate it can also be worthwhile to look at profits generated for business proprietors. Included in this category are many construction subcontractors and real estate brokers with relatively modest incomes, who are organized as independent contractors and therefore not technically counted as having jobs—although casual observers no doubt tend to think of them that way.

The impacts of building an average rental apartment include $28,375 in federal taxes and $14,008 in state and local fees and taxes, for a total of $42,383 in revenue for governments at all levels. For more details and assumptions used to produce the above estimates, consult the full article.

And keep in mind that these are national estimates, designed for use when the impacts on suppliers of goods and services across the country are of interest. Avoid trying to use national estimates to say something about impacts at the state or local level.  For that, keep referring to NAHB’s Local Economic Impact web page.


Average Size of New Single-Family Homes at the End of 2013

March 4, 2014

The size of a typical new single-family home declined slightly for the final quarter of 2013, although the trend for the year was one of increasing size. The trend is likely due to an atypical mix of buyers.

According to fourth quarter 2013 data from the Census the Quarterly Starts and Completions by Purpose and Design survey, the average single-family square footage decreased from 2,701 to 2,656, while the median fell from 2,491 to 2,475.

SF home size_4q13

On a less volatile one-year moving average, the trend of increasing size during the post-recession period is clear. Since cycle lows and on a moving average basis, the average size has increased 13% to 2,673 square feet, while the median size has increased more than 17% to 2,471 square feet.

As noted in NAHB’s analysis of 2012 Census construction data, the recent rise in single-family home sizes is consistent with the historical pattern coming out of recessions. Home sizes fall into the recession as some homebuyers cut back, and then sizes rise as high-end homebuyers, who face fewer credit constraints, return to the housing market in relatively greater proportions.


Home Building Impact Fees: State Averages

January 24, 2014

A national survey of 271 jurisdictions conducted by Duncan Associates in 2012 reveals wide cross-country differences in impact fees that individual jurisdictions charge. The map below presents state averages for standardized single-family units (three-bedroom, 2,000 square-foot units, at density of 4 units per acre and value of $200,000). These averages are for communities that actually charge impact fees and include all categories of impacts (utility, schools, roads, parks and so forth).

Jurisdictions in California charge the highest impact fees in the nation by far, on average $31,014 per standardized single-family unit. Maryland and Oregon are distant second and third with the state averages of $16,557 and $15,550, respectively. The map below only reports averages for states represented within the survey.

impact_fees
Jurisdictions in Florida, Washington, Maryland, Vermont and West Virginia (only 1 jurisdiction in WV was surveyed) report substantial school impact fees. California’s school fees are also common but are capped by state law. In states where school fees are not charged, utility, road, and park fees are the largest and most common components of total impact fees. Impact fees charged for fire, police, and library are typically smaller and less common.

For details and more information about the composition of the fees and the fees for other land use types see: Clancy Mullen, Duncan Associates, National Impact Fee Survey: 2012, August 2012 (http://www.impactfees.com/publications%20pdf/2012_survey.pdf).


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