September Sees Gains in Single-Family Permits

 September 2020 brought a 10.2% increase over September 2019 in single-family permits issued year-to-date (YTD) according to the U.S. Census Building Permits. In fact, the report shows that over the first nine months of this year, the total nationwide climbed to 713,286.

As for each region of the country, the year-to-date ending in September varied. For single-family permits the Southeast saw the highest increase at 12.4%, the Midwest came in at the second-highest

with a 10% increase, the West had a 6.3% increase and the Northeast saw the smallest increase at 6.2%. Multifamily permits did not fair so great. Every region saw a decline with the biggest decline in the West at -9.4%, the Northeast had a decline of -7.5%, the South at -5.6% and Midwest had a decline of -2.7%.

Among the states, only 42 states had a growth in single-family permits while the remaining 8 states and the District of Columbia resulted in a decline. The record highest growth was seen in South Dakota from 2,186 to 2,885 making this a 32% increase. The District of Columbia saw the steepest decline with a 22.2% drop from 126 to 98.

The multi-family sector was not so lucky. YTD only 18 states showed growth while the remaining 32 states and the District of Columbia showed a decline. Mississippi had the biggest increase from 246 to 588 while New Hampshire had the largest decline from 1,148 to 386.

The top 10 metro areas with the highest number of single-family permits were:

Metropolitan Statistical Area	Single-family Permits: Sep (Units #YTD, NSA)
Houston-The Woodlands-Sugar Land, TX	35,309
Dallas-Fort Worth-Arlington, TX	31,631
Phoenix-Mesa-Scottsdale, AZ	22,566
Atlanta-Sandy Springs-Roswell, GA	20,013
Austin-Round Rock, TX	15,327
Charlotte-Concord-Gastonia, NC-SC	13,258
Tampa-St. Petersburg-Clearwater, FL	11,683
Orlando-Kissimmee-Sanford, FL	11,367
Nashville-Davidson-Murfreesboro-Franklin, TN	10,429
Washington-Arlington-Alexandria, DC-VA-MD-WV	9,933

The top 10 metro areas with the highest number of multifamily permits were:

Metropolitan Statistical Area	Multifamily Permits: Sep (Units #YTD, NSA)
New York-Newark-Jersey City, NY-NJ-PA	31,160
Houston-The Woodlands-Sugar Land, TX	15,967
Austin-Round Rock, TX	15,294
Los Angeles-Long Beach-Anaheim, CA	12,095
Miami-Fort Lauderdale-West Palm Beach, FL	11,994
Dallas-Fort Worth-Arlington, TX	11,862
Phoenix-Mesa-Scottsdale, AZ	10,717
Seattle-Tacoma-Bellevue, WA	10,580
Nashville-Davidson–Murfreesboro–Franklin, TN	8,256
Minneapolis-St. Paul-Bloomington, MN-WI	7,881

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NAHB’s Analysis Shows Gain in Custom Home Building for 2019

Low Mortgage interest rates have supported a surge in custom home building in the fourth quarter of 2019. The NAHB’s analysis of Census Data from the Quarterly Starts and Completions by Purpose and Design survey revealed that custom home building increased at the end of 2019.

The US Census Bureau’s Survey of Construction (SOC) is a survey conducted by the US Census Bureau and partially funded by HUD (Department of Housing and Urban Development). The SOC reports up to date national and regional data on housing starts, completions and characteristics of all residential housing. The data which is collected includes the start date, completion date, sales date, sales price (single-family houses only), and physical characteristics of each housing unit, such as

square footage and number of bedrooms. The Quarterly Starts and Completions by Purpose and Design is based on the Building Permits Survey and from the Survey of Construction (SOC).

The National Association of Home Builder’s analysis shows 44,000 total custom building starts during the fourth quarter of 2019. This is a 16% gain over the same quarter in 2018 which totaled to 38,000 total custom building starts. Data shows a solid gain occurred during the last four quarters with custom housing starts totaling to 177,000.

The custom home building market will continue to expand with demand from both owner and contractor built homes. The low mortgage interest rates will protect the custom home building market thus maintaining the positive custom home building outlook.

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A 4.1% Rise From November 2018 In Construction Spending

The Census Bureau reported the November 2019 U.S. spending rate for U.S. construction is 4.1% above 2018’s rate for last November. According to the report construction spending amounted to a seasonally adjusted annual rate of $1.324 trillion.

Out of the total construction spending, spending on private construction was 1.6% above November

2018’s and is at a seasonally adjusted annual rate of $985.5 billion. Residential construction spending came in at a seasonally adjusted annual rate of $536.1 in November making it 2.7% up from a year ago.

“Single-family builders are currently reporting ongoing positive conditions, spurred in part by low mortgage rates and continued job growth,” NAHB Chairman Greg Ugalde said. “In a further sign of solid demand, this is the fourth consecutive month where at least half of all builders surveyed have reported positive buyer traffic conditions.

Homebuilders are confident in the current housing market. The National Association of Home Builders and Wells Fargo suggest the sentiment levels are at 70 points making the rate the second-highest level in 2019. The points are 10 points higher than reported this time in 2018.

The positive housing market is expected to continue in 2020. This forecast is based upon the number of applications for new building permits which were at the highest level in November 2019 than they have been in a decade.

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Reasons Why the Biggest Housing Boom in History Is Just Beginning

The year 2006 brought one of the most profitable side jobs for Americans, flipping houses. In fact, that year, it was reported that one in over ten homes purchased were to flip. In 2008, it all came crashing down. Many went bankrupt because they were stuck with owning flips that were on the fast pace to a dramatic depreciation in value. The housing crash not only affected the housing market, but also caused Americans to lose their jobs and businesses. Fortunately things are turning around for the housing market. Today, housing stocks are one of the best investments out there.

According to Forbes.com housing stocks are currently booming. NVR Inc., a homebuilder, is a slam dunk. It was reported that in February 2019, NVR stocks were at a 45% gain beating the S&P 500 at 10%. Those that purchased the stock back in February have made a lot of money. According to the site’s research, housing stocks will be the way to go for years to come.

Another two stocks to invest in are Vulcan Materials (VMC) and Martin Marietta Materials (MLM). Both companies sell concrete and gravel which is used a lot in the house building industry. Homebuilders use both for housing

foundations, roads and sidewalks. According to the chart, these two stocks have rocketed in the past year. Revenues in the company are rising and hitting all-time highs.

Housing expert Barry Habib, founder and CEO of MBS Highway, has the insider knowledge from the top players in the US housing market. The biggest issue he sees is supply and demand. Since 2009, only 900,000 homes have been built per year. Habib says this is the lowest inventory since the 1950’s. This is one of the biggest

housing shortages we have had. He says that with existing inventory, it would take under six months to sell everything currently on the market.

“The most important driver of home prices is supply and demand. And right now, there is a chronic undersupply of homes in America,” Habib stated.

Habib believes the market is about to be flooded with homebuyers. Millennials have been recorded to be the biggest generation the country has seen. The National Association of Realtors states that one in three homebuyers today is a Millennial.

“On average, folks buy their first home at age 33. Guess what the median age of Millennials is right now? 34. In the past year or two, the first wave of young homebuyers came into the market. But every year for the next decade, tens of millions of Millennials will hit home-buying age.”

This flood will definitely play an important role in the prices of homes. Supply and demand is the most important driver for home prices. With such a tight supply in inventory the housing market will continue to boom.

What does that mean for homebuilders? They will have job security for a while to come. This fall, new home starts rose to their highest level since the summer of 2007 and building permits are at the highest level since the spring of 2007. Habib believes “the American housing boom has years to run.”

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Good News for Residents of St. Tammany Parish

Even though the 10-year statistical snapshot for the parish of St. Tammany includes 2006, a “boom” year for the parish, the snapshot revealed some very good news for residents of St. Tammany Parish, as well as home buyers looking to move into the parish. A report by the St. Tammany Parish

Economic Development Foundations shows a 10-year overview of the population, employment, wages, income, housing, and much more.

According to the report, the population increased 26% from 223,062 to 253,603 from 2006 to 2016. The really good news was that total wages increased by nearly 63% from $2.4 billion in 2006 to $3.9 billion in 2016.  Most of the job growth was seen in the science and technology sector, which saw a 40% increase.  Overall, household income increased from $75,016 to $88,614 during the 10-year period, which is an 18% increase.  Science and technology job wages grew from $163 million to $293 million in 10 years, with an average wage of $62,400.

“I think the biggest impact, to me, is knowing the opportunities and wages for science and technology jobs increased so much,” said Brenda Bertus, the foundation’s chief executive officer. “That tells me

there are more of those jobs here. Those are really good jobs,” Bertus said.

Local real estate companies as well as the U.S. Census & U.S. Bureau of Economic Analysis contributed to the statistical data about the residents and economic information in St. Tammany Parish.  They also reported on building and business permits, housing prices, apartment rent, and sales taxes.

After the initial boost of buildling permits just after Hurricane Katrina in 2006, the report showed that housing sales increased around 42% over the last 5 years, and the average rent for apartments went up 38%. Business numbers increased from 6,728 in 2006 to 7,900 in 2016, which is approximately a 17% increase.
Access the Full 10-Year Report Here.
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St. Tammany Parish Homeowners & Businesses Receive Financial Relief

Good news for St. Tammany Parish homeowners and business owners is that they won’t have to “jump through hoops” in order to get their repair and renovation construction off the ground following the historic flood that hit Covington, Louisiana, inundating the city with water from 3

different river sources and shutting down roads and businesses for several days.  The City of Covington has waived the requirement for building permit fees under an ordinance approved by the City Council.

Mayor Mike Cooper said most of the floodwaters had receded by Tuesday and residents were in clean up mode.
“Things are moving,” Cooper said. “The city is doing what it can to help.”

With 100 total structures and counting being reported with flood damage, not only would the fees and requirements be cost prohibitive to the city, but they would hold up the restoration of people’s homes and businesses which would only cause the city to suffer because of the lack of production.

In order to assist homeowners with their repairs, the city is also requiring any contractor or builder working on a flood damaged home who applies for a permit to be a state licensed contractor.  This

should reduce the amount of fraud that happens when huge storms cause damage in the Greater New Orleans area.  Because state licensing requires proof of general liability insurance, homeowners can also breathe easy while the contractor or builder is working on their home.

The main culprits of the flooding were the Bogue Falaya and Little Tchefuncte Rivers in northern Covington.  One of the storm’s casualties was the Bogue Falaya Park in downtown Covington, which will be closed until further notice until the repairs to the wooden pavilion and playground equipment can be done.  St. Tammany Parish is applying for disaster relief for the storm that brought so much damage and it is the mayor of Covington’s hope that this funding will be made available to Covington’s residents who need it.  Parish-wide, so far it has been counted that 615 structures received flood damage in St. Tammany Parish.


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New Home Sales are Still Going Strong

Even though statistics show a lull in new home building permits and starts, new home sales are still going strong. Both May and June have seen a positive outcome for the housing market and new home buyers.

U.S. Department of Housing and Urban Development and the Commerce Department reported that nationwide housing dropped 11.1% in May, but building permits rose 11.8% (the highest it has been since August 2007).  This almost equal fall and rise was predicted by economists because of lack of inventory in the housing market. Current new home starts are down, but building permits are up because builders are getting geared up for a big push because of this lack of inventory.  It has dropped to around a 4-month supply, the lowest it’s been since the Recession. “The uptick in permits shows our builders are optimistic that more consumers are returning to the housing market,” said NAHB Chairman Tom Woods.

June’s readings are the highest since September 2014. NAHB/Wells Fargo Housing Market Index (HMI) reported that single-family homes rose 5 points to a level of 59 (a score of over 50 indicates a good housing market).

“The HMI indices measuring current and future sales expectations are at their highest levels since the last quarter of 2005, indicating a growing optimism among builders that housing will continue to strengthen in the months ahead,” said NAHB Chief Economist David Crowe.
 
The National Builders Association of Home Builders (NAHB) developed the NAHB/Wells Fargo Housing Market Index (HMI) by taking the monthly survey they have been conducting for 30 years and estimate the builder’s insight of the current housing market.  The survey asks the builder to rate the sales expectations and current single -family home sales for the next 6 months as good fair or poor, and the traffic of prospective buyers as high to very high, average or low to very low.  They take these scores and calculate the index.

“Builders are reporting more serious and committed buyers at their job sites and this is reflected in recent government data showing that new-home sales and single-family construction are gaining momentum,” said NAHB Chairman Tom Woods. This is great news for those who are looking to buy a newly built home and for builders who are in the business of new home building or custom home building. This coupled with an increase in pending home sales, new home sales and mortgage applications make it a great time to purchase a new home.

In St. Tammany Parish, in Louisiana, if you are interested in building a new home for your family in Mandeville, Madisonville, Covington, or Abita Springs, Contact Ron Lee Homes to begin discussing designing your floorplan to either build on your lot or buy a lot in an existing subdivision.  At Ron Lee Homes, we strive to make your new, custom home building dreams reality!  Call 985-626-7619 or E-mail Info@RonLeeHomes.com.


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