by Rob Dietz, Chief Economist, National Association of Home Builders
The most serious headwind facing housing markets today is the escalation of framing lumber prices—up 59% since the start of 2017. Recent NAHB surveys suggest the price for lumber has overtaken the availability of labor as the primary business challenge for home builders. Since the beginning of last year, rising lumber prices have added more than $7,000 to the price of a typical new home and more than $2,000 to the price of a typical apartment.
There are a number of reasons why lumber prices have jumped, including a rail car shortage in Canada, but the primary factor is the 21% effective tariff rate placed on Canadian softwood lumber. The ongoing concerns over trade wars represent a macroeconomic risk to the gains resulting from the recent tax legislation, and lumber is a prime example.
Nonetheless, builder confidence remains strong, despite total housing starts falling 3.7% in April. Though multifamily starts declined 11% last month, that market is up 10% year-to-date, outperforming our forecast. And single-family starts are 8% above their year-to-date totals from a year ago. However, recent data show a gain in average new-home size, which is an early indicator of weakness in the entry-level market due to rising input costs.
The Home Builders Association of Greenville are your neighbors and community leaders providing education and support for building industry professionals. We create jobs, encourage homeownership, and promote responsible growth throughout the upstate of South Carolina.
Wednesday, June 13, 2018
U.S. House Price Index: Prices Rose 1.7 percent in the first quarter
U.S. house prices rose 1.7 percent in the first quarter of 2018 according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI). House prices rose 6.9 percent from the first quarter of 2017 to the first quarter of 2018. FHFA's seasonally adjusted monthly index for March was up 0.1 percent from February.
The HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.
See video for the first quarter featuring Dr. Doerner.
Significant Findings
Home prices rose in all 50 states and the District of Columbia between the first quarter of 2017 and the first quarter of 2018. The top five areas in annual appreciation were: 1) Nevada 13.7 percent; 2) Washington 13.1 percent; 3) Idaho 11.1 percent; 4) Colorado 10.6 percent; and 5) Utah 9.9 percent.
Home prices rose in each of the 100 largest metropolitan areas in the U.S. over the last four quarters. Annual price increases were greatest in Las Vegas-Henderson-Paradise, NV, where prices increased by 17.1 percent. Prices were weakest in Tulsa, OK where they rose 0.8 percent.
Of the nine census divisions, the Pacific division experienced the strongest four quarter appreciation, posting a 9.5 percent gain between the first quarters of 2017 and 2018 and a 2.6 percent increase in the first quarter of 2018. Annual house price appreciation was weakest in the East South Central division, where prices rose 5.3 percent between the first quarters of 2017 and 2018.
The HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.
See video for the first quarter featuring Dr. Doerner.
Significant Findings
Home prices rose in all 50 states and the District of Columbia between the first quarter of 2017 and the first quarter of 2018. The top five areas in annual appreciation were: 1) Nevada 13.7 percent; 2) Washington 13.1 percent; 3) Idaho 11.1 percent; 4) Colorado 10.6 percent; and 5) Utah 9.9 percent.
Home prices rose in each of the 100 largest metropolitan areas in the U.S. over the last four quarters. Annual price increases were greatest in Las Vegas-Henderson-Paradise, NV, where prices increased by 17.1 percent. Prices were weakest in Tulsa, OK where they rose 0.8 percent.
Of the nine census divisions, the Pacific division experienced the strongest four quarter appreciation, posting a 9.5 percent gain between the first quarters of 2017 and 2018 and a 2.6 percent increase in the first quarter of 2018. Annual house price appreciation was weakest in the East South Central division, where prices rose 5.3 percent between the first quarters of 2017 and 2018.
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