Housing Market Experiences Declines Across Key Indicators for the Second Consecutive Month, According to BuildFax’s Housing Health Report

Posted on Jan 16 2019
Type Blog

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 showed continued declines across new and existing housing activity, following blanket declines in November. Furthermore, the trailing three-month outlook for single-family housing authorizations was negative, contrasting last month’s positive outlook.

New Housing Supply Activity, December 2018

  • Single-family housing authorizations decreased 3.76 percent year over year.
  • Single-family housing authorizations decreased by 0.95 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 and maintenance volume on a year-over-year basis indicate consumer confidence may be wavering. It’s more important than ever before to track the health of the existing housing stock to ensure properties are maintained and kept whole, especially with heightening weather activity.

Existing Housing Supply Activity, December 2018

  • Existing housing maintenance volume decreased 10.71 percent year over year.
  • Existing housing remodel volume decreased 15.64 percent year over year.

Comparative Analysis of Single-Family Housing Authorizations

It’s a commonly accepted that declines in the housing market are particularly indicative of a coming recession. In order to better illustrate this point, BuildFax, the leading source of property condition and history data, performed an analysis across 10 economic indicators to understand their correlation for predicting recessions between 1961 and 2018. This analysis confirmed single-family housing authorizations are the strongest predictor of economic recessions of the indicators analyzed. See the full analysis here.

Simulation: The Probability of a U.S. Economic Recession

The potential for an economic downturn has been a hot topic over the past few months. Following recent declines in single-family housing authorizations, a highly predictive indicator of economic recessions, BuildFax dug further. Is a U.S. economic recession on the horizon? According to our simulation, the probability of a recession may double between 2019 and 2020 – assuming certain factors trend as projected. While the results suggest a recession is not imminent, monitoring housing indicators – among other factors – is critical to understand how the market will fare over the next 12-months.

For more insight on the health of the U.S. housing market and whether a recession is on the horizon, download the December 2018 report

Leave a reply

Your email address will not be published. Required fields marked (*)

Apr 1 2019

Housing Wire’s 6th annual Tech100 awards recognized BuildFax as one of the most cutting-edge tech companies in the housing sector. This marks the second year BuildFax has made the list. BuildFax first made the list in 2017. Since then, the company has almost doubled in size and grown at double-digit CAGR – a true testament … Continued

Mar 27 2019

Hurricane-related insured losses have skyrocketed over the past two years. Heading into 2019’s hurricane season, carriers face the challenging task of responding swiftly to claims, while also controlling loss creep, mitigating fraud, and managing property risk and exposure. It’s a tall order, but the right advanced data services can support these initiatives. Carriers who leverage … Continued