Housing Authorizations Edge Up, But Still Down from Last Year
According to property database BuildFax, May 2019 showed a month-over-month single-family housing authorization increase of 0.46%--but a year-over-year decrease of 3.50%.
The trailing three-month outlook (March to May 2019) decreased 4.76% – the sixth consecutive month of declining activity. This is in stark contrast to May 2018, when the trailing three-month outlook increased 7.78%.
"The combination of declining mortgage rates, moderating home prices and peak home-buying season should help to buoy the housing market, but so far this hasn’t happened," said Jonathan Kranarak, chief operating officer of BuildFax.
"Continued declines in year-over-year maintenance and single-family housing authorizations further reinforce the ongoing housing slowdown. As we near six months of declining activity, the question remains, how long will this slump persist?"
According to the report, existing housing maintenance volumes declined 1%, but maintenance spend rose 4.48%. This seemingly contrasting data is likely due to labor shortages in the construction industry and other economic factors, including the impact of recent increased tariffs on building material.
BuildFax noted that remodeling increased in five of the top 10 metropolitan statistical areas – Los Angeles, Miami Washington, Philadelphia and Chicago, with the most significant increases in Philadelphia and Chicago at 15.20% and 5.06% respectively.
Remodeling activity gives insight into the regions where homeowners are reinvesting in their properties—an important factor amidst a housing slowdown as it can show where the U.S. housing stock is riskiest while also highlighting cities with an active housing market.
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