The BuildFax Housing Health Report for November showed signs that the housing market might be slowing. Overall the report found that the year-over-year rate of single-family housing authorizations, maintenance and remodeling have all decreased.
This is the first time since 2011 that all three categories have decreased in the same month, pointing to a potential market slowdown. The report, which leverages U.S. property condition and history data to deliver macroeconomic, as well as more granular trends, also demonstrated that eight of the past 10 instances of blanket declines occurred during the recession and its recovery in 2008 and 2009.
A few of the highlights from the report:
- Single-family housing authorizations decreased by 0.86% year over year.
- Maintenance volume decreased by 5.85%.
- Remodel volume decreased by 12%.
Note that the report also looked at commercial construction, which showed decreases this month were in line with similar residential declines. However, commercial construction over the past five years has seen steady increases, primarily in construction spending. BuildFax data suggest there are disproportional increases between construction cost and volume, which imply a labor shortage in the market.
Jonathan Kanarek, BuildFax’s chief operating officer, commented:
More so now than in years prior, the compounding effects of natural disasters, scarcity in the construction labor market and recent tariffs have impacted housing growth – not to mention systemic factors, like rising mortgage rates, that influence consumer behavior. While it’s natural to see some leveling off after steep growth, the next few months will be telling; whether a downturn is on the horizon or the market is simply softening is yet to be seen.