The December BuildFax Housing Health Report (BHHR) revealed another increase in year-over-year single-family housing authorizations, which grew 4.82% this month after climbing 7.09% in November. However, month over month, single-family housing authorizations declined 2.61%. After declining for a majority of 2019, the rolling three-month outlook rounded out the year on a positive note, increasing 5.77%.
Existing housing activity, which encompasses maintenance and remodeling, also increased this month. The substantial increases in December may be a result of prospective or current homeowners’ feeling unable to buy a new property. Even though mortgage rates are low and the economy is strong, there’s increased competition in the housing market, propelled by a tight housing stock.
New and Existing Housing Supply
Repeated increases across major housing indices, including single-family housing authorizations, maintenance, and remodeling, suggest housing activity might be stabilizing heading into 2020.
New and Existing Housing Supply Activity, December 2019
- Single-family housing authorizations increased 4.82% year over year.
- Existing housing maintenance volume increased 7.26% year over year.
- Existing housing remodel volume increased 4.60% year over year.
U.S. Domestic Migration May Decrease Relative to Maintenance
This year, the United States experienced the lowest rate of mobility, which monitors the pace at which people in the U.S. move domestically, since this metric was first tracked in 1947. Just 9.8% of U.S. residents moved in 2019. However, as people decide to stay put for longer periods of time, it’s possible they’ll spend additional capital on their existing properties (for instance, larger maintenance projects).
BuildFax explored the relationship between a decrease in mobility and an increase in maintenance activity. An analysis found that between 2010 and 2017, based on the three-year rolling correlations, there was a strong negative correlation—meaning as one variable (mobility) decreases, the other (maintenance activity) increases. In the past two years, this correlation has changed, however, as the relationship between the two rates grows increasingly disparate.
Download the full report for an analysis of how housing activity affects the U.S. economy.