MReport May 2017

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TH E M R EP O RT | 51 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 LATEST Consumers Harbor Optimism for Housing While overall optimism is up, fewer renters feel it's a good time to buy a home. C onsumer confidence is up across the coun- try, especially in rural and middle America. According to a new consumer survey from the National Asso - ciation of Realtors (NAR), many people believe now is a good time to buy and sell. "Confidence levels generally rise after a presidential election as the nation hopes for the best. Even though it is a highly polarized country, consumers for the most part have upbeat feelings about the economy right now," said NAR Chief Economist Lawrence Yun. "Stronger business and consumer morale typically lead to even more hiring and spending, which in turn encourages more households to make big deci - sions like buying a home. These positive developments would be especially good news for prospec- tive homebuyers in the more affordable Midwest region." Though positive sentiment about the economy is up, rent - ers are less optimistic about homebuying. Fifty-six percent of renters feel that now is a good time to buy a home, which is down from 57 percent last quarter, and down even further from 62 percent a year ago. Comparatively, 80 percent of homeowners feel now is a good time to buy. The biggest concern right now is a low inventory. At the end of January, inventory was at 1.69 million, which is 7.1 percent lower than a year ago. Inventory has fallen year over year for 20 straight months. "You can't buy what's not for sale," said The Collingwood Group Chairman Tim Rood. "Inventory is the lowest that I have ever seen, which is reflected in the disappointing existing home sales number. Home price appreciation rates remain on a tear but will surely slow given ris - ing rates and flat income growth." A notable bump in respon- dents who believe now is a good time to sell could alleviate the inventory concern. NAR President William E. Brown said homeowners looking to sell could find themselves in a tricky spot if they're not careful. "Demand far outpaces supply in many parts of the country right now, which means homeowners will likely sell their home much quicker than the time it takes to buy another," he said. More Home Starts Bring More Construction Jobs Homebuilder and remodeler employment is on the rise. H ome starts and comple- tions jumped 3 percent between January and February. Single-fam- ily building permits also grew 3 percent, and with this increase in construction comes an increase in the need for construction workers. An Eye On Housing blog post from the National Association of Homebuilders (NAHB) in mid- March reported that, according to the BLS Job Opening and Labor Turnover Survey (JOLTS) and NAHB analysis, there were 147,000 open construction sec - tor jobs in January. The open position rate (job openings as a percent of total employment) was 2.1 percent. February 2017 data showed that homebuilder and remodeler employment grew by 18,900. Growth has been a trend since November 2016, after a period of hiring weakness early that year. Overall, the trend for open construction jobs has been increas - ing since the end of the recession. Additional survey data, however, showed that labor is a top business challenge for builders, but recent increases in hiring have reduced the current level of unfilled jobs. December and January saw the highest hiring rates since late 2014, of 5.9 percent and 5.6 percent respectively. Residential construction employment is currently at 2.707 million. This number is divided between 767,000 builders and 1.94 million residential specialty trade contractors. Homebuilders and re - modelers have added 136,000 jobs over the last 12 months, and since the low point of industry employ- ment following the recession, residential construction gained over 724,000 positions. The monthly hiring rate in the construction sector grew to 5.1 percent in January. Layoffs stayed steady, at 2.7 percent, in a range set last fall. Quits, however, have risen to 2.3 percent in January. February data showed the unemployment rate for construc - tion workers to be at 6.5 percent. Unemployment in this sector has declined since February 2010, when the unemployment reached its peak rate of 22 percent and leveled off in the 6 to 10 percent range in 2016. "You can't buy what's not for sale. Inventory is the lowest that I have ever seen, which is reflected in the disappointing existing home sales number." —Tim Rood, Chairman, The Collingwood Group

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