Despite National Growth, New Construction Activity Is Sluggish in Major Metros

The January BuildFax Housing Health Report (BHHR) revealed healthy growth across new and existing housing activity. Single-family housing authorizations increased 6.03% year over year but decreased 0.41% month over month, remaining relatively flat.

Existing housing activity, which encompasses maintenance and remodeling, which is a subset of maintenance that includes renovations, additions, and alterations, experienced moderate growth in January. This suggests that U.S. property risk is improving after slowing for a majority of 2019.

New and Existing Housing Supply

Continued increases across new and existing construction further confirm that 2019 may have been a correction from a white-hot market and now housing activity will stabilize in 2020.

New and Existing Housing Supply Activity, January 2020

  • Single-family housing authorizations increased 6.03% year over year.
  • Existing housing maintenance volume increased 5.67% year over year.
  • Existing housing remodel volume increased 2.02% year over year. 

Learn more about January 2020 housing activity.

Metro Trend: Maintenance Rises While New Construction Falls

At the national level, housing activity has started out on strong footing. However, a deep dive into the top 10 most populous metro areas in the U.S. tells a more nuanced story. On a 12-month rolling basis, new construction, which encompasses both single- and multifamily housing authorizations, decreased across almost all ten major metros year over year.

In that same time period, however, metros also experienced substantial increases in maintenance. While the increases in maintenance may be attributed in part to homeowners feeling locked into their properties, this activity could also suggest homeowners are prepping their property for resale. Only two cities—Miami and Houston—experienced decreases, at 10.86% and 3.44%, respectively. These decreases may be a lingering effect of 2017’s Hurricanes Irma and Harvey, when property rebuilding lasted around a year on average.

Download the full report for a deep dive into metro-level housing activity and its implications for the 2020 housing market.