NEW HOMES: Coming out of the winter conventions and markets there was a great deal of talk about the housing market and how it should continue to improve in nearly all areas. Some of the latest numbers out seem to bear this optimism. For instance, according to data from HUD and the U.S. Census Bureau, permits for new-home construction rose 1.8% to 925,000 units in January—the quickest pace since mid-2008. Along these same lines the February National Association of Home Builders/First American Improving Markets Index (IMI) showed the number of improving housing markets expanded for a sixth consecutive month to a total of 259 metropolitan areas. All 50 states now have at least one metro on the list.
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REACTION: Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C., said, having every state represented on the IMI index “shows the housing recovery has substantial momentum and continues to expand from one market to the next.” In addition, “Steady demand for new homes is prompting builders to put more construction crews back to work in order to replenish thin supplies of completed product. We expect this progress to continue through the spring buying season and beyond.” Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., said, “The continued expansion of improving housing markets in February should help convince those who have been considering a home purchase that now is the time to go forward with those plans.”
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EXISTING HOMES: It is not just the new home market that is doing well, sales of existing homes are gaining momentum. According to the National Association of Realtors (NAR) existing home sales for 2012 were 4.94 million units—the second-highest rate of sales since November 2009, when sales were lifted by a federal tax credit. In addition, the inventory of existing homes for sale fell to their lowest since January 2001. At the current pace of sales of existing homes, inventories would be exhausted in 4.4 months, the lowest rate since May 2005. The affect of these can be seen in NAHB’s Remodeling Market Index (RMI), which increased five points, while future market indicators increased seven points.
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MORE REACTION: David Crowe, NAHB’s chief economist, said with existing home sales up, the increase in the RMI “partially reflects the remodeling work new home owners undertake when they move in. Consumers are gaining confidence in the economy and feeling more comfortable pulling the trigger on large and small renovations.” He added, residential remodeling has returned to previously normal levels and remodeling activity is expected to post a 2.4% increase in 2013. Bill Shaw, a remodeler from Houston and NAHB’s remodelers chairman, added, “Remodelers are optimistic [as they] reported more work from large and small projects as well as overall home repair.” Patrick Newport, an economist at IHS Global Insight in Lexington, Mass., probably summed up all the data the best, saying, “The outlook for housing is better this year than last year.”
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WOOD DATA: On a green note, the amount of wood certified by the Forest Stewardship Council (FSC) continues to grow in North America. Corey Brinkema, president, said over the past year, the organization reports more than 20 million new acres of forest have been certified to its standards in the U.S. and Canada. Today, more than 170 million acres of forest are certified to FSC standards in the U.S. and Canada, more than one third of the worldwide total. Of the new land, FSC notes the majority of those acres are in Canada, but much of the wood and fiber is flowing to the U.S.