City-Level Housing Activity Counters National Downward Trends, BuildFax February Housing Health Report Reveals

The February BuildFax Housing Health Report (BHHR), which delivers a comprehensive view of macro- and microeconomic trends affecting the U.S. housing market, revealed gaps between national and city-level trends. The February report confirmed the housing market slowdown persists amidst repeat declines in key housing indicators. However, on the metro-level, some cities are still experiencing steady increases in housing activity.

New and Existing Housing Supply

On a national level, single-family housing authorizations, maintenance and remodel volumes were down for the fourth consecutive month. It’s important to monitor decreases in single-family housing authorizations, which are correlated to historical recessions; as well as maintenance and remodel activity, an indicator of the health of the existing housing stock. Spend experienced increases across both maintenance and remodels, which may be a product of recent spikes in U.S. construction labor costs.

New Housing Supply Activity, February 2019

  • Single-family housing authorizations decreased 5.75 percent year over year.
  • Single-family housing authorizations decreased 4.24 percent month over month.

Existing Housing Supply Activity, February 2019

  • Existing housing maintenance volume decreased 5.53 percent year over year.
  • Existing housing remodel volume decreased 10.07 percent year over year.

In-Depth: A Metro-Level View of Housing Activity

BuildFax analyzed new construction and maintenance activity across the 10 largest metro areas, where a majority saw at least one indicator decrease year over year. New construction, which encompasses single- and multi-family housing authorizations, provides a lens into whether a city’s housing market will experience increased investment. Meanwhile, maintenance activity reveals how the health of the existing housing stock is faring. This is particularly notable for insurance carriers, as increased maintenance activity is correlated with increased risk on their book of business.

See the full analysis here.

Four Major Cities See Notably Varied Activity

Of the 10 metro areas analyzed, just four saw increases in new construction and maintenance activity: Chicago, New York City, Washington D.C. and Dallas. Chicago experienced the greatest growth in both indicators. Maintenance activity at the city-level increased 19.51 percent year over year, while new construction rose 60.15 percent.

For more insight on the health of the U.S. housing market and the broader economy, download the February 2019 report.