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52 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA The Health of Housing Examining the state of housing authorizations and their impact on the overall market. S ingle-family housing authorizations, mainte- nance, and remodeling volumes have decreased, according to the BuildFax Hous- ing Health Report, which found declines in all three categories for the second consecutive month in December. While single-family housing authorizations decreased by 3.76 percent year over year, mainte- nance volumes for existing homes declined 10.71 percent over the same period. The remodel volume of existing homes also dipped by 15.64 percent year over year, ac- cording to the report. However, in a nod to 2018's high material and labor costs remodel spend, a consistently volatile sub- section, increased 5.97 percent in December. These higher costs resulted from increased tariffs and the effects of recent natural disas- ters, the report indicated. The U.S. Census Bureau and the U.S. Department of Housing and Urban Development publish a joint report on new residential construc- tion every month. But the report has been delayed this month due to the government shutdown. If the current trend of declines across these three categories persists, the report noted that the probability of recession could double between 2019 and 2020, the report said. "The potential for an economic downturn has been highly dis- cussed over the past few months as more signals of a recession come into alignment," said Holly Tachovsky, CEO, BuildFax. "While this is only the second consecu- tive month of declining indicators, this shift is in stark contrast to the white-hot housing market that the U.S. has experienced since 2013." According to the report, single- family housing authorizations are among the earliest and most predictive indicators of a reces- sion and can provide a leading indicator of the health of the economy. The report found that U.S. housing authorization activity had one of the highest correlations with each economic downturn between 1961 and 2018. "Under current conditions, we anticipate single-family housing authorizations to be a must-watch indicator in 2019 and as we move into 2020. However, more than a few critical economic factors must align before a recession is im- minent," said Jonathan Kanarek, COO BuildFax. Affordability for First- Time Buyers Buying a home is an easier task for some than for others. W hat is the dif- ference between first-time buyers who bought a home and those who didn't? According to an analysis by RealEstate.com, it could well be $30,000—the median income difference be- tween those first- time buyers who could afford a home and those who couldn't. The analysis said that the typi- cal first-time buy- er earned more than the median household income that helped them towards affording a home. The analysis revealed that the median income for a first-time buyer is $72,500, compared with the national median household income of $60,700. The difference in income for first-time buyers is more pronounced when compared with their peers who didn't buy, who have a median income of $42,500. The analysis found that while most buyers relied on savings as well as proceeds from the sale of a home to finance the down payment on a new property, first- time buyers didn't have the same resources. This is where a higher income came into play to help them save for a down payment. "Buying a home, especially for the first time, is a major step in a lot of people's lives," said Justin LaJoie, General Manager at RealEstate.com. "But with home prices climbing ever higher, and inventory yet to see sustained increases, getting a foot in the door is incredibly difficult for new buyers who can't rely on selling another home to come up with a down pay- ment." Looking at the down payment that first-time buyers could af- ford, the analysis revealed that this group of home- buyers usually put down slightly smaller down payments. The median down payment for first- time buyers ac- cording to Zillow was 14.5 percent of a home price compared to the traditional 20 percent down. Fifty- eight percent of repeat buyers, on the other hand, put down at least 20 percent down payment. With this smaller down pay- ment, the analysis indicated, first-time buyers, earning a median income could afford to buy a $338,000 home, meaning they could buy about 68 percent of available homes. "The potential for an economic downturn has been highly discussed over the past few months as more signals of a recession come into alignment." —Holly Tachovsky, CEO, BuildFax "With home prices climbing ever higher, and inventory yet to see sustained increases, getting a foot in the door is incredibly difficult for new buyers who can't rely on selling another home to come up with a down payment." —Justin LaJoie, General Manager, RealEstate.com