Today, BuildFax published its Housing Health Report (BHHR), which delivers a macro view of the economic trends affecting the U.S. housing market. The January report showed decreases for the third consecutive in year-over-year housing activity. The continuation of year-over-year housing declines are notable given the high correlation between decreases in single-family housing authorizations and historical recessions.
New and Existing Housing Supply
New Housing Supply Activity, January 2019
- Single-family housing authorizations decreased 3.48 percent year over year.
- There was a slight uptick in activity between December and January with a 1.23 percent increase month over month.
Meanwhile, maintenance and remodel activity were also down year over year. As key indicators of economic health, maintenance and remodels are particularly important to watch as the U.S. housing stock ages.
Existing Housing Supply Activity, January 2019
- Existing housing maintenance volume decreased 6.47 percent year over year.
- Existing housing remodel volume decreased 10.85 percent year over year.
A State-Level View of Housing Activity
Maintenance activity has a high correlation to consumer confidence. Trends show that homeowners are more reluctant to embark on substantial construction projects if they are uneasy about the state of the economy. Additionally, when maintenance activity is on the decline, property insurance carriers see adverse effects, primarily from increased frequency of claims.
“Consistent property maintenance across existing U.S. structures is important for sustaining the health of the housing stock,” said BuildFax VP of Customer Operations Sefton Patton. “BuildFax studies conducted in conjunction with insurance carriers have found regular home maintenance lowers property risk over time and decreases the frequency and severity of claims. With consistent decreases in maintenance, it’s increasingly important that carriers closely monitor their books.”
See the full analysis here.
Spotlight: Demolition Activity
Similar to how maintenance activity reflects consumer confidence, demolition activity often leads to reinvestment in a region. Only three states experienced increases in demolition activity last year – California, Florida and Michigan. California and Florida frequently top the list of states that see increased demolition activity. Michigan is a new contender with a 258.81 percent increase in demolitions between 2017 and 2018. Detroit’s growing demolitions program is one of the largest in the U.S. and a driver of the uptick in activity.
For more insight on the health of the U.S. housing market, economic trends and whether a recession is on the horizon, download the January 2019 report.