Huge Breakthroughs for Housing Industry

Declining multifamily vacancy rates are a hopeful sign for future multifamily market expansion, which is consistent with NAHB Indices for New and Existing Apartments Continue to Improve" improving responses reported in NAHB multifamily surveys.

Finally, we’ve got some news that builders and contractors can be excited about. Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 681,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development.

This is 5.7 percent above the revised October rate of 644,000 and is 20.7 percent above the November 2010 estimate of 564,000.

Privately-owned housing starts in November were at a seasonally adjusted annual rate of 685,000. This is 9.3 percent (±13.1 percent) above the revised October estimate of 627,000 and is 24.3 percent (±20.1 percent) above the November 2010 rate of 551,000.

Privately-owned housing completions in November were at a seasonally adjusted annual rate of 542,000. This is 5.6 percent (±11.5 percent) below the revised October estimate of 574,000 and is 1.6 percent (±15.8 percent) below the November 2010 rate of 551,000.

Hope for the Multifamily Market
NAHB’s Multifamily Production Index improved for the fifth consecutive quarter. The index increased from 44.4 in the second quarter to 47.3 in the third quarter—the highest reading since the fourth quarter of 2005.

Credit for Builders Remains Tight
Among the various ways lenders can tighten, the ones most commonly cited by builders and developers were:

• reducing the amount they are willing to lend (77 percent)
  
• lowering the allowable loan-to cost ratio (75 percent)
  
• simply not making new AD&C loans (66 percent)
  
• requiring personal guarantees or collateral not related to the project (63 percent).

Residential Construction Spending Rises in October
Spending on private residential construction projects jumped 3.4% during October. The initial estimate for September was also revised higher, shifting from a gain of 0.2 percent up to 0.6 percent.

Even with these recent improvements, total private residential construction spending has failed to gain any considerable forward momentum in the past year, with modest growth of only 1.7 percent rate versus October 2010.

Multifamily construction spending took a step back for the second consecutive month, posting a 0.8 percent decline in October after recording a 4.2 percent drop during September. Nevertheless, multifamily construction spending is 6.7 percent above its year-ago level.
?EUR??,,????'??? Courtesy of NAHB

Consumer Confidence Improves in November, but Remains Weak
Both the Conference Board’s Consumer Confidence Index and University of Michigan Consumer Sentiment Survey revealed a healthy increase in consumer confidence during the month of November. The reports indicated consumers view current conditions more favorably and were more optimistic about the future.

Pending Home Sales Bounced Back Strongly

• 10.4 percent increase in October, rising to 93.3
  
• Decrease of 4.6 percent in September
  
• Declines in July (1.2 percent) and August (1.3 percent)
  
• Up 24.1 percent in the Midwest
  
• Up 17.7 percent in Northeast
  
• Up 8.6 percent in South
  
• Down 0.3 percent in West
  - Courtesy of Mortgage News Daily, NAHB

Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 681,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development. This is 5.7 percent above the revised October rate of 644,000 and is 20.7 percent above the November 2010 estimate of 564,000.