Each month, BuildFax releases its Housing Health Report (BHHR), which delivers a macro view of the economic trends affecting the U.S. housing market. This month’s report discovered, for the first time since 2011, there were declines across new and existing housing supply. The data reveals a decrease in seasonally adjusted, year-over-year single-family housing authorizations, remodeling and maintenance spend and volume. Commercial construction activity also saw similar declines. These factors suggest the hot real estate market may start to see a softening in the coming months.
New Housing Supply Activity, November 2018
- Single-family housing authorizations decreased 0.86 percent year over year.
- Single-family housing authorizations decreased by 0.58 percent month over month.
Existing Housing Supply
Maintenance and remodel activity are key indicators of economic health, particularly as the U.S. housing stock ages. Decreases in remodeling (12 percent) and maintenance volume (5.85 percent) on a year-over-year basis suggest a slowing of construction activity on existing structures. Maintenance and remodel spend also decreased at 15.39 percent and 1.15 percent, respectively.
Existing Housing Supply Activity, November 2018
- Existing maintenance volume decreased 5.85 percent year over year.
- Existing remodel volume decreased 12 percent year over year.
Housing Market Declines
Over the past decade, BuildFax has found 10 instances where the volume and spend of single-family housing authorizations, maintenance and remodels declined year over year – eight of the 10 occurred in 2008 at the height of the Great Recession. The blanket declines last month were the first since 2011, a time when the economy was still in a period of recovery from the crash, and could indicate a potential housing market slowdown on the horizon.
Spotlight: Commercial Construction Trends
The commercial construction market also saw decreases across new and existing supply – a downturn that signals a shift from the last five years. Since 2013, commercial construction has been increasing steadily with new construction rising 28.42 percent in the past five years while maintenance to structures increased 22.21 percent in that same time frame.
For more insight on the health of the U.S. housing market and commercial construction trends, download the November 2018 report.