Multifamily Market Outlook: September 2017 Data

Multifamily Production Index and Starts through 2017 Quarter 2

Residential Construction Employment

NAHB calculations using employment data from the Bureau of Labor Statistics (BLS) indicate that the number of residential construction jobs rose by 0.5% in August to 2.7 million. Over the past year, the number has risen by 4.3%. Relative to the average number of residential construction jobs between 2001 and 2003 – 2.71 million – the current number of jobs is 100% of that level.

Nationally, however, residential builders are recovering more slowly than residential specialty trade contractors. In August, there were 766,000 residential builder jobs, 0.2% more than last month and 3.8% above its August 2016 level. The current number is 95% of its 2001-2003 average level of 808,000.

Meanwhile, the number of residential specialty trade contractor jobs totaled 1.94 million in August, reflecting monthly growth of 0.6% and an annual increase of 4.5%. The current number is 102% of its 2001-2003 average level of 1.9 million.

Residential Construction Average Weekly Earnings

The BLS also reported that residential building employees’ average weekly earnings were little changed at $1,009 in July. Over the past year, their average weekly earnings increased by 2.5%. Average weekly earnings paid to specialty trade contractors remained at $1,073 in July, and increased 2.0% over the past year. Currently, residential building employees’ average weekly earnings is 94% of those paid to specialty trade contractors.

Average weekly earnings reflect the product of average hourly earnings and the number of hours worked in a week. In July, residential builders’ earnings, on average, worked out to $27.95 per hour while specialty trade averaged $27.87 per hour. Meanwhile, residential builders averaged 36.1 work hours per week while specialty trade contractors averaged 38.5 hours. The data indicates that residential builders had roughly similar hourly earnings to specialty trade contractors, but worked fewer hours – averaging only 94% of the hours that specialty trade contractors worked.

Multifamily Mortgage New Business Volume

Fannie Mae’s monthly multifamily new business volume, a proxy for the overall multifamily mortgage market, totaled $5.6 billion in July, 24% more than the volume in June – $4.5 billion – and 3% less than the volume in July 2016. Over the first seven months of 2017, Fannie Mae’s monthly new business volume totaled $36.2 billion, 27% greater than the $28.6 billion over the same period in 2016.

For more housing and industry analysis, be sure to check out the following multifamily-related posts from Eye on Housing, by searching the Multifamily Archive in Eye on Housing. Posts from June 2017 are listed below. Michael Neal, a NAHB Senior Economist, provides additional coverage of the multifamily housing sector each month for Multi-Housing News. His latest narrative can be found here.