Posts Tagged ‘national association of home builders’

Mortgage News Daily has written much content in recent months concerning the growth of the rental market and the difficulties communities are facing in keeping up with affordable rental housing needs.  The latest release of the National Association of Home Builders' Multifamily Production Index (MPI) indicates developers are beginning to notice opportunities in the rental market and are stepping up production of multi-family housing.  However, a second index embedded in the report, the Multifamily Vacancy Index (MVI), which measures the multifamily housing industry's perceptions of vacancies, may indicate a growing misalignment between who needs  rental housing and who it's being produced for....

The MPI, which tracks multifamily housing industry sentiment, provides a measure of construction activity in three sectors - low-rent units, market-rent units, and "for sale" units.  Each of the three components can achieve a score of 0 to 100, the MPI is a composite score of all three.  Any score over 50 indicates that more respondents see the market(s) improving than the number who see it getting worse.

The MPI composite increased from 40.8 in the fourth quarter of 2010 to 41.7 in the first quarter of 2011. This was its third consecutive quarterly increase. Improvement, however, was restricted to the pricier market rate rental units.  That component of the index rose from 51.7 in the fourth quarter to 61.5 in the first quarter of 2011 while the index for low-rent units dropped 3 percentage points to 45.7 and the "for sale" component was down 1.3 percentage points to 23.4. Expectations for production in six months dropped four percentage points for low-rent and ten percentage points for both market rate and "for sale" units from the perceptions held in the previous quarter.  Unfortunately it is in the low-rent sector where needs are greatest.

  In a detailed analysis of the American Housing Survey the Department of Housing and Urban Development (HUD) found that 7.1 million households fell into the "worst case" category where over one-half of the monthly income is spent on housing.   A recent study by Harvard's Joint Center on Housing found nearly three-quarters of all renters have incomes below the median income for all households including 41 percent in the bottom quartile and 30 percent in the lower-middle one.  Only about 10 percent of renters are in the highest income quartile.

The Multifamily Vacancy Index (MVI) measures the multifamily housing industry's perception of vacancies in Class A, Class B, and Class C units; the lower the number on a scale of 0 to 100, the fewer the vacancies.  The MBI increased slightly from 33.3 in the fourth quarter to 35.0.  Dropping vacancies were concentrated in the lower two sectors with Class C (the lowest priced) apartments increasing from 38.0 to 40.2, Class B jumping to 33.6 from 28.3 while the index for Class A apartments declined from 37.3 to 34.3.

Looking forward six months, respondents saw a tightening market in all three segments, but especially in Class B apartments where the index rose from 24.8 to 33.4.

"Both the Multifamily Production Index and the Multifamily Vacancy Index have emerged as leading indicators that provide information about the likely movement of Census Bureau statistics of multifamily starts and vacancy rates about one to three quarters in advance," NASHB Chief Economist David Crowe said. "Even though we saw a slight increase in the vacancy index in the first quarter, the long-term trend is downward. Given the demographics of demand, we expect that trend to continue.

"Although the increase is cause for optimism, the multifamily market still faces significant challenges, Crowe said. "There is considerable pent-up demand, but the ongoing crisis in funding for new construction means that developers are limited in their ability to meet that demand."  

Related MND comments....

READ MORE:  HUD Focused on Rebuilding America's Dilapidated Housing Inventory

READ MORE:  Affordable Housing Units Needed for Low Income Renters

READ MORE: The Dearth of Affordable Rental Housing

READ MORE:  Gimme Shelter: Homelessness Rate Climbing. Low Income Rental Units Needed

"With so many foreclosed properties sitting empty on the market we can expect remodeling and rehabbing to be a leading indicator of a bottom in the housing market", says MND's Managing Editor Adam Quinones. "We already know there is dearth of affordable rental housing available to low income renters. From that perspective, FHA should open its 203(k) program to investors if they want to accomplish their affordable housing goals."

Builders who specialize in home remodeling are seeing a better market than they have in years according to the National Association of Home Builders' (NAHB) Remodeling Market Index (RMI) released on Friday.  The index rose to 46.5 in the first quarter of the year from 41.5 in the fourth quarter of 2010.  The current RMI is the highest the index has been since the fourth quarter of 2006.

The RMI is based on builders' perceptions of current remodeling activity and on indicators of future activity such as calls for bids.  In addition to the RMI there is an index reflecting each of its two components.  Any score of less than 50 indicates more respondents view the market activity as lower (compared to the prior quarter) than report that it is higher.

Current market conditions increased from 43.3 in the fourth quarter to 46.1 while future market indicators jumped to 46.8 from 39.7.  

"Remodelers report a jump in activity so far this year and have been receiving more calls for work and appointments," said NAHB Remodelers Chairman Bob Peterson. "However, many home owners are still slow to commit to remodeling due to feeling uncertain about the economic recovery and difficulty obtaining loans."

There were indications of market growth in three of the four regions.  The RMI rose from 38.8 to 46.1 in the Northeast and from 39.7 to 46.1 in the West.  The South had a marginal rise from 45.8 to 46.1 and the Midwest, while still scoring higher than the other regions dropped substantially from 54.3 in Q4 to 47.1.

All current indicators of types of remodeling increased: major additions to 50.3 from 48.6, minor additions to 48.0 from 43.9, and maintenance and repair to 39.5 from 37.0. Future market indicators also improved across the board: calls for bids rose to from 47.2 to 53.1, appointments for proposals to 52.4 from 43.1, backlog of remodeling jobs to 49.7 from 42.6, and amount of work committed for the next three months to 32.1 from 25.9.

NAHB asked an additional special question of remodelers in this survey cycle: why did they think prospective customers are holding back from remodeling their homes?  Ninety-percent of the builders cited the difficulty of obtaining financing while 81 percent noted that customers had lost equity in their homes and 74 percent mentioned economic uncertainty.  Other reasons given by builders include their reluctance to invest in a home that might not hold its value (67 percent), negative information from the media (62 percent) and inaccurate appraisals which leading to difficulty in getting financing (54 percent.)

"Home remodeling continues to slowly increase and continued growth through the year is expected." said NAHB Chief Economist David Crowe. "The fact that some indicators are breaking 50 means remodelers are seeing improving activity in their markets. While credit scarcity and economic uncertainty continue to weigh down remodeling, signs of increasing consumer interest are promising."

Builders who specialize in home remodeling are seeing a better market than they have in years according to the National Association of Home Builders' (NAHB) Remodeling Market Index (RMI) released on Friday.  The index rose to 46.5 in the first quarter of the year from 41.5 in the fourth quarter of 2010.  The current RMI is the highest the index has been since the fourth quarter of 2006.

The RMI is based on builders' perceptions of current remodeling activity and on indicators of future activity such as calls for bids.  In addition to the RMI there is an index reflecting each of its two components.  Any score of less than 50 indicates more respondents view the market activity as lower (compared to the prior quarter) than report that it is higher.

Current market conditions increased from 43.3 in the fourth quarter to 46.1 while future market indicators jumped to 46.8 from 39.7.  

"Remodelers report a jump in activity so far this year and have been receiving more calls for work and appointments," said NAHB Remodelers Chairman Bob Peterson. "However, many home owners are still slow to commit to remodeling due to feeling uncertain about the economic recovery and difficulty obtaining loans."

There were indications of market growth in three of the four regions.  The RMI rose from 38.8 to 46.1 in the Northeast and from 39.7 to 46.1 in the West.  The South had a marginal rise from 45.8 to 46.1 and the Midwest, while still scoring higher than the other regions dropped substantially from 54.3 in Q4 to 47.1.

All current indicators of types of remodeling increased: major additions to 50.3 from 48.6, minor additions to 48.0 from 43.9, and maintenance and repair to 39.5 from 37.0. Future market indicators also improved across the board: calls for bids rose to from 47.2 to 53.1, appointments for proposals to 52.4 from 43.1, backlog of remodeling jobs to 49.7 from 42.6, and amount of work committed for the next three months to 32.1 from 25.9.

NAHB asked an additional special question of remodelers in this survey cycle: why did they think prospective customers are holding back from remodeling their homes?  Ninety-percent of the builders cited the difficulty of obtaining financing while 81 percent noted that customers had lost equity in their homes and 74 percent mentioned economic uncertainty.  Other reasons given by builders include their reluctance to invest in a home that might not hold its value (67 percent), negative information from the media (62 percent) and inaccurate appraisals which leading to difficulty in getting financing (54 percent.)

"Home remodeling continues to slowly increase and continued growth through the year is expected." said NAHB Chief Economist David Crowe. "The fact that some indicators are breaking 50 means remodelers are seeing improving activity in their markets. While credit scarcity and economic uncertainty continue to weigh down remodeling, signs of increasing consumer interest are promising."

For the first time in four months builders showed increased confidence in their responses to the monthly National Association of Home Builders (NAHB)/Wells Fargo Housing Market Survey.  The Housing Market Index (HMI) derived from that survey bumped up one point from its previously static position to 17 in March.   This is the highest score for the HMI since May 2010, a time when builders were feeling the effects of the home buyer tax credit program.

The component gauging current sales conditions scored 17, unchanged from the previous month and the index measuring traffic of prospective buyers was 12, also unchanged. Builders, however, expressed optimism about sales in the next six months, driving that component to 27, the highest level since May 2010 and two points higher than the February figure.

The Survey, which NAHB has conducted for over 20 years, asks builders to rate current single-family homes sales and their expectations for those sales in 6 months, both on a scale of "good," "fair," or "poor," and the traffic of prospective buyers as "high to very high," "average" or "low to very low."  Each question results in a component score and the three components are used to calculate a seasonally adjusted index - the HMI - where any number over 50 indicates that more builders view sales conditions as good than poor.