There’s some good news and some bad news for the housing industry. Since we like to focus on the good we’ll start with the positive news first.
Positive #1: According to the Bureau of Labor and Statistics 321,00 jobs (seasonally adjusted) were added to the economy in November. Prior to November, the average monthly gain in jobs had been 233,00. The BLS data also indicated that the average work week and hourly earnings improved. An improving labor market will help support home building in 2015.
Positive #2: Another industry plus has been access to capital. A quarterly NAHB survey on construction lending indicated easing lending conditions during the third quarter. These results mirror a broader Federal Reserve survey showing an improved lending environment for commercial real estate generally.
Positive #3: Census construction spending data reveals that in October, all three components of the residential construction industry showed growth. The pace of single-family spending (put-in-place) was up 1.8%, while multifamily (1%) and improvement spending (0.6%) also posted gains. On a three-month moving average basis, from October 2013, the annualized pace of total private residential construction spending has increased 1.3%.
The Negative: Builder confidence in the market for newly built single-family homes fell one point in December to a level of 57 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
Let’s hope we continue to see more positive news, than negative!
