U.S. Housing Starts Rose to Fastest Pace Since 2006 in December

March 1, 2021
Reade Pickert - Bloomberg

U.S. home construction starts rose in December to the best pace since late 2006 as builders responded to the robust demand for single-family housing.

Residential starts climbed by 5.8% to a 1.67 million annualized rate, according to government data released Thursday. That topped all estimates in a Bloomberg survey of economists that had a median forecast of 1.56 million and compared with an upwardly revised 1.58 million rate in November.

The Housing Market Boom Gets Another Boost From Biden

February 22, 2021
Conor Sen - Bloomberg

For years following the Great Recession, households faced a number of financial hurdles hindering their ability to buy a home. The three biggest were: a weak labor market that didn't give workers enough income to purchase a house; elevated levels of student loan debt; and high apartment rents that prevented prospective buyers from saving money for a down payment.

Mr. Sen may be contacted at csen9@bloomberg.net

This Chart Should Assuage Fears of a Housing Bubble

February 15, 2021
Peter Coy - Bloomberg

American housing is often lumped in with Bitcoin and Tesla Inc. as a bubble market. True, prices have risen sharply. The median sales price of a previously owned single-family house in the U.S. reached $314,300 in December, up 93% in 11 years, according to the National Association of Realtors. But this chart shows that the force behind the price rise is a supply shortage, not a speculative frenzy.

Congress Establishes the 4% Floor to Support Affordable Housing

February 8, 2021
Kimberly C. Moore - Gravel2Gavel Construction & Real Estate Law Blog

Legislation signed into law on December 27, 2020, fixed the rate for the 30% present value low-income housing tax credit (LIHTC), which had dropped to a historic low of 3.07 in 2020, at 4% (the 4% Floor). Congress hopes that the 4% Floor will increase the supply of affordable rental housing in 2021 and beyond by reducing the need for other types of financing and subsidies for qualified LIHTC projects.

The LIHTC program, which was enacted as part of the 1986 Tax Reform Act, subsidizes the acquisition, construction and rehabilitation of affordable rental housing for low- and moderate-income tenants. The program accounts for approximately 90% of all such housing created in the United States today. According to HUD, an average of almost 1,400 projects and 106,000 units were completed annually between 1995 and 2018. The LIHTC program is by far the largest federal program supporting the creation of affordable rental housing.

Ms. Moore may be contacted at kimberly.moore@pillsburylaw.com

Biggest U.K. Home Builder Says Housing Market Is Resilient

February 1, 2021
Olivia Konotey-Ahulu - Bloomberg

Persimmon Plc, the U.K.’s biggest housebuilder, said the long-term outlook for the country’s housing market remained resilient despite the economic gloom and latest national lockdown.

The firm delivered its upbeat assessment as it reported full-year revenue of 3.33 billion pounds ($4.6 billion) in a trading update Wednesday. While that was slightly down on a year earlier, it beat analyst estimates in a Bloomberg survey.

Why Finding Workers Is Getting Harder for U.S. Homebuilders

January 25, 2021
Arianne Cohen - Bloomberg

As industries go, residential construction in America has largely weathered the pandemic thanks to steady demand and low interest rates. Worksites nationwide are humming with good, paying jobs at a time when 1 in 8 workers are receiving unemployment checks. So why on earth are some construction firms complaining of a labor shortage?

U.S. construction is sprawling, employing roughly 5% of the nation’s workforce (7.3 million employees) at some 680,000 firms, according to the Bureau of Labor Statistics (BLS). The industry is essentially its own economy, building hundreds of billions of dollars worth of structures each month. It’s true that many parts of the sector are hurting because of the pandemic. But in others, there’s actually too much work to go around.

Lennar Targets 2 Billion for Major Single-Family Rental Push

January 18, 2021
Patrick Clark - Bloomberg

The U.S. homebuilder Lennar Corp. is making a big push into single-family rentals, targeting a new set of customers at a time when surging prices threaten to push homeownership out of reach for many.

The Miami-based company is laying the groundwork to develop thousands of rental houses, according to people with knowledge of the matter. The firm is seeking to raise $2 billion for the initiative, said one of the people, who asked not to be named because the matter is private.

U.S. Homebuilder Confidence Eases From Record, Remains Robust

January 11, 2021
Henry Ren - Bloomberg

U.S. homebuilder confidence eased slightly in December to the second-best level on record following the prior month’s peak, signaling that low mortgage rates are still giving the industry a major boost.

A gauge of builder sentiment slipped to 86 from November’s reading of 90 that was the highest in records back to 1985, according to the National Association of Home Builders/Wells Fargo Housing Market Index released Wednesday. The figure was below the median forecast of 88 in Bloomberg’s survey of economists.

U.S. Housing Starts Rose For a Third-Straight Month in November

January 4, 2021
Olivia Rockeman - Bloomberg

U.S. new home construction rose more than forecast to a nine-month high in November, highlighting the strength of a residential housing market that’s been supported by strong demand amid low interest rates.

Residential starts rose 1.2% to a 1.547 million annualized rate from an downwardly revised 1.528 million a month earlier, according to government report released Thursday. The median estimate in a Bloomberg survey of economists called for a 1.535 million pace.

Million-Dollar Homebuying Soars With U.S. Rich on Shopping Binge

December 29, 2020
Prashant Gopal - Bloomberg

Wealthy Americans, largely untouched by the recession and eager for more living space, have been on a homebuying binge.

Demand for million-dollar homes is growing faster than any other price tier in the pandemic-driven U.S. housing boom. In October, applications for mortgages larger than $766,000 jumped 59%, the biggest gain for all segments measured by the Mortgage Bankers Association. By comparison, the increase for mortgages from $150,000 to $300,000 was 13%.

Toll Brothers’ Home Orders Soar in Rally for Luxury Sales

December 21, 2020
Prashant Gopal - Bloomberg

Toll Brothers Inc. reported better-than-expected order growth, a sign that homebuyers rushing to the suburbs during the pandemic are fueling a boom in luxury sales.

  • Purchase contracts for the three months through October, jumped 68% from a year earlier to 3,407, the builder said in a statement Monday. The average estimate of analysts surveyed by Bloomberg was 3,237. It wasn’t enough for investors, however -- the shares fell in late trading.

World’s Top Lumber Firm Sees Homebuilding Surge Going Strong

December 14, 2020
Marcy Nicholson - Bloomberg

Strong homebuilding activity in North America will mean tight wood supply and demand for several more years, according to the top executive of the world’s largest lumber producer.

“In the next five years, we see housing starts continuing to be strong and an industry that will be working hard to keep up with demand,” West Fraser Timber Co. Ltd. Chief Executive Officer Ray Ferris said Wednesday in a phone interview.

Homebuilder Confidence Hits Another Record on U.S. Buying Boom

December 7, 2020
Prashant Gopal - Bloomberg

Homebuilder confidence in the U.S. jumped in November, hitting another record high as buyers swarmed sales offices to take advantage of the lowest mortgage rates in history.

The gauge of builder sentiment rose to 90, the highest in data going back to 1985 and up from 85 in October, according to the National Association of Home Builders/Wells Fargo Market index released Tuesday. It was third straight month of record-high readings and beat the median forecast of 85 in a Bloomberg survey of economists.

U.S. Existing-Home Sales Unexpectedly Rise to Highest Since 2005

November 30, 2020
Henry Ren - Bloomberg

Sales of previously owned U.S. homes unexpectedly rose in October to the highest level in almost 15 years, extending a housing market boom fueled by record-low mortgage rates and buyers’ desire for properties in the suburbs.

Contract closings increased 4.3% from the prior month to an annualized 6.85 million, the strongest pace since November 2005, according to National Association of Realtors data released Thursday. The October rate exceeded all economists’ forecasts in a Bloomberg survey, which had a median estimate of 6.47 million.

U.S. Housing Starts Increased More Than Forecast in October

November 23, 2020
Henry Ren - Bloomberg

U.S. new home construction rose in October by more than forecast to the fastest pace since February, highlighting a robust residential real estate market that’s helping spur the economy.

Residential starts increased 4.9% to a 1.53 million annualized rate from an upwardly revised 1.46 million a month earlier, according to a government report released Wednesday. The median forecast in a Bloomberg survey of economists called for a 1.46 million pace.

U.S. Existing Home Sales Rise to 14-Year High, Exceed Forecast

November 16, 2020
Reade Pickert - Bloomberg

Sales of previously owned U.S. homes rose more than expected in September to the highest level in 14 years as a desire for more space and record-low mortgage rates continue to support demand.

Contract closings increased 9.4% from the prior month to an annualized 6.54 million, the fastest pace since May 2006, after a downwardly revised 5.98 million in August, according to National Association of Realtors data released Thursday. The median forecast in a Bloomberg survey of economists called for a 6.3 million rate in September. Single-family home sales outpaced purchases of condominiums.

Homebuyers’ Wallets Hammered as Prices for Plywood Substitute Spike

November 9, 2020
Marcy Nicholson - Bloomberg

Americans are coughing up $4,600 more on average to buy their dream home than six months ago -- thanks to a record run-up in prices for a once-cheap plywood substitute.

Prices are on a tear for those bonded wood-chip sheets commonly used as sheathing for walls, floors and roofs in new home construction. Oriented Strand Board, or OSB, has long been used as a low-cost alternative to plywood, but the product now fetches a higher price as increased demand and tight supplies lead to delivery delays and elevated construction costs in the U.S. and Canada.

U.S. Housing Starts Increase Amid Shift to Single-Family Homes

November 2, 2020
Jarrell Dillard - Bloomberg

U.S. new home starts increased in September on a sharp gain in single-family house construction while building permits climbed, indicating residential building had plenty of momentum at the end of the third quarter.

Residential starts increased 1.9% to a 1.42 million annualized rate from a month earlier, according to a government report released Tuesday. The median forecast in a Bloomberg survey of economists called for a 1.47 million pace. Applications to build, a proxy for future construction, rose 5.2% to a 1.55 million rate, the fastest since 2007 and topping forecasts.

Portland, Ore., Forges Ahead With Ambitious Affordable Housing Construction Goals

October 26, 2020
Oregonian - Engineering News-Record

Portland has committed to building 720 new affordable housing units downtown as part of its ambitious Broadway Corridor redevelopment, but to meet that goal it may have to shift some of that housing to an auxiliary site across the railroad tracks from the main project.
And the city will have to overcome a legacy of failed housing goals at other major redevelopments. Backers say they are cognizant of those setbacks, and are structuring this project differently in hopes of avoiding past missteps.

ENR may be contacted at ENR.com@bnpmedia.com

New Home Construction in Canada Hits Its Highest Since 2007

October 19, 2020
Theophilos Argitis - Bloomberg

Construction on new homes surged to the highest level in more than a decade as Canada’s housing market continues to defy expectations of a slowdown.

Housing starts surged to 262,396 units in August on an annualized basis, up 6.9% from an already elevated 245,425 units a month earlier, Canada Mortgage and Housing Corp. said Wednesday in Ottawa. The highest monthly total since September 2007 was powered by new construction in Toronto and Vancouver, particularly multiple units like condos.

Cities Don’t Need High-Rises to Become Affordable

October 12, 2020
Virginia Postrel - Bloomberg

“Density” is a word only an urban planner could love. To normal people it’s a synonym for “crowded.” It calls to mind canyons of high-rise apartment buildings that block the light and traffic jams that block the roads. It’s the furthest thing from the California dream of a place in the sunshine with a little outdoor space to call your own.

That’s why 75% of the residential lots in Los Angeles are zoned for single-family, detached homes, with an even higher percentage in the San Fernando Valley and on the jobs-rich Westside. For L.A. to become affordable to people who don’t already own homes or make hundreds of thousands of dollars a year, the city needs to put more places to live on that land. It needs to increase the density of its housing. Fortunately, it can do that without giving up sunshine and elbow room.

Builders and Manufacturers Could Lead This Recovery

October 5, 2020
Justin Fox - Bloomberg

Time to Make Some Stuff

The bounce-back from the pandemicession is still pretty tentative, and Friday morning’s jobs report may give us a better sense of just how tentative. But construction and manufacturing are already looking strong, writes Conor Sen, raising the possibility that this will be the first recovery in a long, long time to be led by the goods-producing sectors. That’s welcome news because it could mean big job gains even as other parts of the economy continue to be held back by Covid-19.

The housing market is booming because people who figure they’ll be working from home a lot need more space. With the supply of available houses on the low side even before the pandemic, that’s good news for those who know how to build them. Meanwhile, things are looking up for U.S. manufacturers due to a combination of pent-up consumer demand and a weak dollar. And though that weak dollar is frustrating for policy makers in the euro zone, argue Mark Gilbert and Marcus Ashworth, they need to resist the urge to start a currency war that could derail the global recovery.

Homes Designed to Keep Heat In Are Now Struggling to Cool Down

September 28, 2020
Jess Shankleman - Bloomberg

When it was completed in 2012 for the Summer Olympics, Lydia Yuzva’s housing complex in East London was hailed as a beacon of green design and energy efficiency. The 2,800 units, a mix of apartments and town houses, have floor-to-ceiling windows, lots of insulation, and environmentally friendly heating systems that use waste heat from a nearby power plant fueled with biomass and gas. They were designed for the U.K.’s cold winters, trapping heat to reduce energy bills.

Ex-Colony Executive Seeks $1.2 Billion for Single-Family Rentals

September 21, 2020
Patrick Clark - Bloomberg

ResiBuilt Homes was supposed to raise $250 million to develop single-family rental communities, but the deal was scuttled in March after the Covid-19 pandemic brought the U.S. economy to a halt.

Now, the Atlanta-based builder is out raising money again, and it’s seeking nearly five times the original amount. ResiBuilt is working with New York investment bank Whelan Advisory to raise $400 million in equity and $800 million in debt to build and manage rental houses as it looks to capitalize on demand for larger living spaces and investor appetite for ways to bet on the suburbs.


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