General recession weakens residential market
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RSS FeedApartment demand is dropping quickly with rising layoffs and greater concern with job security. The residential remodeling market has also weakened sharply with the stall in consumer real income growth. Also, single family and condo demand is slipping lower in a weaker economy. Nonetheless, the housing market will recover before the rest of construction because the credit bubble problems have been wrung out of the market long ago and speculative buying of deeply discounted properties has now begun.
Congress will soon provide additional funds for reducing mortgage payments as well as require lenders (and through them those who insured the repayment of mortgage bonds) to absorb some reduction in mortgage payments. This will prevent some foreclosures and prevent lenders from having to make to make as large additional write-offs of their mortgage assets. It will also provide a small boost to residential remodeling.
U.S. Residential Building Construction
(thousands of units)
| Monthly Figures (1) (latest actual values) |
Annual Figures | ||||||
| Actual | Forecast | ||||||
| Sept-08 | Oct-08 | 2006 | 2007 | 2008 | 2009 | 2010 | |
| Northeast (% change is period versus same period, previous year) |
113 | 78 | 171 | 143 | 137 | 135 | 155 |
| -21.0% | -51.6% | -9.6% | -16.7% | -3.9% | -1.6% | 7.5% | |
| Midwest | 146 | 126 | 285 | 206 | 140 | 129 | 163 |
| -14.1% | -38.2% | -20.2% | -27.7% | -31.8% | -8.5% | 25.40% | |
| South | 410 | 416 | 912 | 675 | 460 | 393 | 505 |
| -31.3% | -33.9% | -8.9% | -26.0% | -31.8% | -14.7% | 28.6% | |
| West | 159 | 171 | 444 | 317 | 199 | 158 | 218 |
| -42.2% | -39.1% | -19.4% | -28.5% | -37.2% | -20.9% | 36.8% | |
| Total | 828 | 791 | 1,811 | 1,341 | 936 | 814 | 1041 |
| -30.1% | -38.0% | -12.6% | -26.0% | -30.2% | -13.1% | 26.0% | |
| Total Single-family | 549 | 0 | 1,474 | 1,034 | 636 | 558 | 726 |
| -41.3% | -100.0% | -14.3% | -29.8% | -38.5% | -12.4% | 28.6% | |
| Total Multi-family | 279 | 260 | 338 | 307 | 300 | 256 | 315 |
| 12.0% | -33.5% | -4.7% | -9.2% | -2.2% | -14.5% | 20.6% | |
| New Home Sales (2) | 457 | 433 | 1,049 | 764 | 493 | 451 | 546 |
| -34.1% | -40.1% | -18.0% | -27.2% | -35.5% | -8.4% | 21.1% | |
| Manufactured Home Shipments | 81 | 77 | 118 | 96 | 84 | 72 | 80 |
| -15.6% | -18.1% | -20.0% | -19.3% | -12.3% | -14.0% | 10.8% | |
(1) Monthly figures are seasonally adjusted at annual rates (SAAR figures).
(2) Based on a survey of homebuilders; excludes homes built under contract and multi-family rental units).
Actuals: U.S. Department of Commerce, National Association of Realtors, Freddie Mac.
Forecasts and table: Reed Construction Data.
Mfg. home shipment data for Aug. and Sept.
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