Economics

NAHB’s Economics team provides in-depth economic analysis of the most significant issues and latest trends driving the housing industry. In addition to national housing market data, this section includes state and local data for the Western region.

Housing Market Snapshot

* Seasonally Adjusted Annual Rate; Arrows indicate the direction from the previous month for starts and sales and year for prices.

NAHB/Wells Fargo Housing Market Index: The index, which measures builder confidence in the market for newly built single-family homes, rose four points to 48 in February from a reading of 44 in January. Any number below 50 indicates that more builders view sales conditions as poor than good.

NAHB Chief Economist Dr. Robert Dietz’s analysis

• With future expectations of Fed rate cuts in the latter half of 2024, NAHB is forecasting that single-family starts will rise about 5% this year.
• But as builders break ground on more homes, lot availability is expected to be a growing concern, along with persistent labor shortages and an anticipated rise in building material costs, particularly for lumber.
• And as a further reminder that the recovery will not be smooth as buyers remain sensitive to interest rate and construction cost changes, mortgage rates increased from about 6.6% to 6.9% by the end of February per Freddie Mac.
• This indicates that even with rates expected to moderate in the months ahead, it could be a bumpy path forward.

Labor and Workforce Data

• Employment by State and Metro Areas: Access the latest data from the Bureau of Labor Statistics about overall employment and construction employees in your state and local metro areas.
• Western Region Workforce Data: Find the construction trades wage data for the 13 states comprising the Western region of the United States.

Young Adults Living with Parents

• Young adults ages 25-34 continued the post-pandemic trend of moving out of parental homes with the share of those living with parents or parents-in-law dropping to 19.1% in 2022.
• While the national average share declined to 19.2%, more than a quarter of young adults ages 25-34 remain in parental homes in Hawaii (28.1%), California (26.2%) and New Jersey (25.9%).
• The elevated shares of young adults living with parents in high-cost coastal areas point to prohibitively expensive housing costs as one of the reasons for keeping young adults in parental homes.

Read more in this Eye on Housing blog post.