Construction authorizations for single-family homes continue falling
Steady interest rates could lift the housing market going forward, but for now there is an ongoing slump in single-family home construction authorizations along with maintenance and remodeling activity, according to BuildFax.
March was the fifth consecutive month of year-over-year declines in all three categories.
There was an 8.39% year-over-year decline in single-family authorizations, compared with a 5.75% drop in February. The month-to-month decrease from February was 2.56%.
"The downward trend in housing activity has led to increased focus on the sector," said BuildFax Chief Operating Officer Jonathan Kanarek in a press release. "In March, the Fed signaled no additional rate increases in 2019, which could boost investment in the housing market.
"The announcement is good news for consumers heading into the spring home buying season. We may see some relief across maintenance and remodeling indicators, as home sales typically facilitate investment into the existing housing stock."
Existing-home maintenance volume fell 5.07% compared with March 2017, versus a 5.53% year-over-year decline in February.
The remodel volume, a subset of the maintenance category, which included housing renovations, additions and alterations, decreased by 9.76% year-over-year in March. In February, the decline was 10.07%.
Going forward, maintenance activity is likely to rise in states that are subject to natural disasters like hurricanes and hail storms.
"North Carolina continues to see elevated maintenance activity as the state rebuilds from Hurricane Florence," the BuildFax March report said. "Recovery is expected to last at least seven months for major repairs such as roof, plumbing, electrical and mechanical." North Carolina was the state with the third-largest increase in maintenance activity, at 7.54% year-over-year, behind only New Mexico (11.3%) and New York (11.07%), and ahead of Ohio (6.53%).
"Additionally, maintenance growth in Colorado (ranked fifth a 5.93% year-over-year increase) could be attributed, in part, to preventive maintenance ahead of potential 2019 hail storms. The state has experienced substantial damage from back-to-back storms over the past couple years," the report said.