Last month, a BuildFax report stated that the housing construction slowdown may be easing up. Based on both single-family housing authorizations and remodel activity from September to October, it appears that this forecast held up.
At the time of the October report, BuildFax’s COO, Jonathan Kanarek, stated, “If housing continues showing the promise of growth, or even a leveling off, this activity has the potential to stimulate the larger economy.”
A month later, the company reports growth. According to the BuildFax’s report released on Monday, single-family housing authorizations increased by 0.24% from September to October 2019. This marked a 2.33% increase year over year – the first year-over-year bump since September of 2018.
“Last November, housing activity experienced the first instance of blanket declines since 2011, when the economy was still recovering from the 2008 recession,” said Jonathan Kanarek, managing director of Buildfax. “Almost a year following November’s declines, we’re now seeing blanket increases.”
“In light of the recent upswing in housing activity, it’s likely the 2019 housing slide was a stabilization of a white-hot market,” he said. “This is, of course, further bolstered by a strengthening economy that recently experienced interest rate cuts, steady wage growth, and a reversion in the yield curve.”
The blanket increase Kanarek noted also applies to activity within the existing housing supply. BuildFax refers to existing housing maintenance as “a gauge of consumer confidence.” Since the beginning of September, the company has been reporting increases in that index. The trend continues as existing maintenance volume and spending gained 6.08% and 12.67% year over year, respectively. According to BuildFax, maintenance activity has now increased for more than a full quarter.
“Additionally, remodel volume and spend—a subset of maintenance that includes renovations, additions, and alterations—increased 6.83% and 9.18%, respectively,” the report states. ”Year-over-year remodeling activity has started to outpace maintenance activity, increasing at a faster rate since June. This suggests homeowner project size and scope have likely been higher over the past few months.”