FHB Logo Facebook LinkedIn Email Pinterest Twitter Instagram Tiktok YouTube Plus Icon Close Icon Navigation Search Icon Navigation Search Icon Arrow Down Icon Video Guide Icon Article Guide Icon Modal Close Icon Guide Search Icon Skip to content
Subscribe
Log In
  • How-To
  • Design
  • Tools & Materials
  • Videos
  • Blogs
  • Forum
  • Magazine
  • Members
  • FHB House
  • Podcast
Log In
Building Business

Housing and Construction Economic Update

Self-Taught MBA: News and stats about the good, not so bad, and not too ugly economic conditions for our industry at present and into the near future.

By Fernando Pagés Ruiz

Here’s a round-up of news and statistics about the good, not so bad, and not too ugly economic conditions for our industry at present and into the near future. We all know these are the good old days for the construction industry, and it seems the status quo will hold for a bit longer. As always, some clouds loom in the horizon, none too big or gray. Our source for most of these stat is economist, Elliot F. Eisenberg, Ph.D.

Awesome Abodes 

New home sales in September came in at a seasonally adjusted annual rate of 667,000, the highest level since 10/07! Sales were up 18.9% from August, the largest monthly percentage gain in almost 28 years. While some of the 26% sales rise in the South to 405,000, representing 61% of all new home sales, was hurricane related, and this is a volatile series, sales are up a decent 8.6% YTD.

Consumer Confidence  

As Measured by the Conference Board, October consumer confidence came in at 125.9, the highest reading since 12/00. This elevated level is a result of rising equity and home prices and an unemployment rate of just 4.2%, its best level since 2/01. A similar measure put out by the University of Michigan is at its best level since early 2004, and Bloomberg’s Consumer Comfort index is near its post-recession high. That’s good news for the economy in general.

Fed Figure

For the first time since 1978, a first-term president hasn’t reappointed the incumbent Fed chair. Instead, President Trump will appoint existing Fed governor Powell. He will continue the process of gradual rate rises established by outgoing chair Yellen, but offer a lighter regulatory touch. As Yellen’s term as a Fed governor doesn’t end until 2024, I sincerely hope she stays. It would be the first time that’s happened since 1948. As usual with this administration, unchartered waters ahead.

Poor Pendings 

Pending home sales were flat in September and that was the highlight of the report. The index is at its lowest level since 1/15, and has declined Y-o-Y in five of the last six months. Moreover, in the Northeast the index is down 2.4% Y-o-Y, and is down 2.5% Y-o-Y in the Midwest. In the South, pending sales are off 5% Y-o-Y, and out West they are 2.9% weaker Y-o-Y. In general terms, while housing has performed very well, it’s not doing quite as well as the rest of the economy.

Solid Sweat  

October’s 261,000 net new jobs was good, as were upward revisions to August and September totaling 90,000. Unemployment fell to 4.1%, its lowest level since 12/00, the broadest measure of unemployment fell to 7.9%, tops since 12/06, and job growth over the past three months has averaged a solid 162,000. But, wage growth was zero and Y-o-Y wages increases are an anemic 2.4%. Nonetheless, rates rise a quarter-point in December. Mixed economic signals, full employment and stagnate wages. Interest rates hikes looming. Always a cooling influence on housing.

Double Deduction  

The standard deduction in 2017, if married is $12,700; $6,350 if single. Trump proposes doubling it. This will eliminate itemizing for married households with deductions between $12,701 and $25,400. Based on 2015 data, the average itemizing household with AGI of between $50,000 and $100,000 has $22,872 in deductions, including $7,007 in mortgage interest. These households will stop itemizing, enjoying lower taxes but not benefiting from any deductions including mortgage interest. A proposed curb on the mortgage deduction and property tax caps are important reasons why the National Homebuilders Association (NAHB) has been in a panic about the Trump Tax proposal.

Trulia Tests the Trump Touch

In a recent economic analysis run by Trulia, the residential real estate internet site, the Trump Bump has not touched the housing market. In fact, according to Trulia, housing markets have performed slightly worse under Trump’s first year than Obama’s final four. They write, “The ‘Trump Bump’ is missing from the housing market. When looking at our aggregate housing market index (described below), just 1,021 counties have improved over the past year, while 1,299 are doing at least slightly worse.” So, we’re doing well, although not as well as we were. Hopefully, the NAHB concerns will prove overwrought, and we have a few more years of prosperity ahead.

Now you’re up to date.

Sign up for eletters today and get the latest how-to from Fine Homebuilding, plus special offers.

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters
See all newsletters
×

Get home building tips, offers, and expert advice in your inbox

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters
See all newsletters

New Feature

Fine Homebuilding Forums

Ask questions, offer advice, and share your work

Log in or create an account to post a comment.

Sign up Log in

Become a member and get full access to FineHomebuilding.com

More Building Business

View All
  • Best Practices for Home-Building Project Communication
  • Healthy Cash-Flow Management
  • Tools for Managing Home-Building Financials
  • How to Hire and Retain Good Tradespeople
View All

Up Next

Video Shorts

Featured Story

The Story of Habitable Attics

Before turning an attic into livable space, learn the code requirements specific to attics.

Featured Video

Micro-Adjust Deck-Baluster Spacing for an Eye-Deceiving Layout

No math, no measuring—just a simple jig made from an elastic band is all you need to lay out a good-looking deck railing.

Related Stories

  • Lydia Crowder, Drywaller
  • 4 Types of Residential Project Delivery Methods
  • Podcast 596: Members-only Aftershow — The State of Home Building
  • Podcast 595: Members-only Aftershow—Building and Remodeling Contracts

Discussion Forum

Recent Posts and Replies

  • |
  • |
  • |
  • |
  • |
  • |
View More Create Post

Highlights

Fine Homebuilding All Access
Fine Homebuilding Podcast
Tool Tech
Plus, get an extra 20% off with code GIFT20

"I have learned so much thanks to the searchable articles on the FHB website. I can confidently say that I expect to be a life-long subscriber." - M.K.

Get home building tips, offers, and expert advice in your inbox

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters
See all newsletters

Video

View All Videos
  • Podcast 596: Members-only Aftershow — The State of Home Building
  • Podcast 595: Members-only Aftershow—Building and Remodeling Contracts
  • Podcast 594: PRO TALK with Contractor Andy Steele and Student Jude Griffin
  • Podcast 592: PRO TALK With Insurance Adjuster Josh Zoller
View All

Business

View All Business Articles
  • Podcast 591: Members-only Aftershow—Hidden Costs of Construction
  • Podcast 588: PRO TALK With FHB House 2023 Builder Jon Beer
  • Podcast 586: PRO TALK With Timber Framer Will Gusakov
  • Podcast 584: PRO TALK With Consultants John Lenker and Assaf Arie, Part 2
View All Business Articles

BOOKS, DVDs, & MERCH

Shop the Store
  • 2022 Fine Homebuilding Archive
    Buy Now
  • Pretty Good House
    Buy Now
  • Code Check Complete 3rd Edition
    Buy Now
  • 2023 Tool Guide
    Buy Now
  • Shop the Store

Fine Homebuilding Magazine

  • Issue 318 - October 2023
    • Make Mudsills Square and Level
    • Turn Up the Heat With Induction Cooktops
    • The Fine Homebuilding Interview: Lloyd Alter
  • Issue 317 - Aug/Sept 2023
    • Finishing Drywall With Seamless Results
    • A Flat Roof in a Cold Climate
    • Compact Cordless Shop Vacs
  • Issue 316 - July 2023
    • Timber-Framed Solar Canopies
    • Build a Transom Above a Stock Door
    • Understanding Toilet Design and Efficiency
  • Issue 315 - June 2023
    • How to Craft a Copper Roof
    • 5 Lessons from Building in a Cold Climate
    • The Advantages of Cellular PVC Siding
  • Issue 314 - April/May 2023
    • 7 Options for Countertops
    • Tool Test: Wood-Boring Bits
    • Critical Details for Ductless Heat Pumps

Fine Homebuilding

Follow

  • YouTube
  • instagram
  • facebook
  • pinterest
  • Tiktok
  • twitter

Newsletter

Get home building tips, offers, and expert advice in your inbox

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters
See all newsletters

Membership & Magazine

  • Online Archive
  • Start Free Trial
  • Magazine Subscription
  • Magazine Renewal
  • Gift a Subscription
  • Customer Support
  • Privacy Preferences

Taunton Network

  • Green Building Advisor
  • Fine Woodworking
  • Fine Gardening
  • Threads
  • About
  • Contact
  • Advertise
  • Careers
  • Copyright
  • Terms of Use
  • Site Map
  • Do not sell or share my information
  • Privacy Policy
  • Accessibility
  • California Privacy Rights

© 2023 The Taunton Press, Inc. All rights reserved.

X
X
This is a dialog window which overlays the main content of the page. The modal window is a 'site map' of the most critical areas of the site. Pressing the Escape (ESC) button will close the modal and bring you back to where you were on the page.

Main Menu

  • How-To
  • Design
  • Tools & Materials
  • Video
  • Blogs
  • Forum
  • Reader Projects
  • Magazine
  • Members
  • FHB House

Podcasts

  • FHB Podcast
  • ProTalk

Webinars

  • Upcoming and On-Demand

Podcasts

  • FHB Podcast
  • ProTalk

Webinars

  • Upcoming and On-Demand

Popular Topics

  • Kitchens
  • Business
  • Bedrooms
  • Roofs
  • Architecture and Design
  • Green Building
  • Decks
  • Framing
  • Safety
  • Remodeling
  • Bathrooms
  • Windows
  • Tilework
  • Ceilings
  • HVAC

Magazine

  • Current Issue
  • Past Issues
  • Magazine Index
  • Subscribe
  • Online Archive
  • Author Guidelines

All Access

  • Member Home
  • Start Free Trial
  • Gift Membership

Shop the Store

  • Books
  • DVDs
  • Taunton Workshops

More

  • FHB Ambassadors
  • Reader Projects
  • Podcast
  • FHB House
  • Customer Support

Account

  • Log In
  • Join

Newsletter

Get home building tips, offers, and expert advice in your inbox

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters
See all newsletters

Follow

  • YouTube
  • instagram
  • facebook
  • pinterest
  • Tiktok
  • twitter

Join All Access

Become a member and get instant access to thousands of videos, how-tos, tool reviews, and design features.

Start Your Free Trial

Subscribe

FHB Magazine

Start your subscription today and save up to 70%

Subscribe

We hope you’ve enjoyed your free articles. To keep reading, become a member today.

Get complete site access to expert advice, how-to videos, Code Check, and more, plus the print magazine.

Start your FREE trial

Already a member? Log in