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.

* 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, fell eight points to 38 in October from a reading of 46 in September. This marks the 10th consecutive month that the HMI has declined and it is now at half the level it was just six months ago. Any number under 50 indicates that more builders view sales conditions as poor than good.

NAHB Chief Economist Robert Dietz’s analysis

“High mortgage rates approaching 7% have significantly weakened demand, particularly for first-time and first-generation prospective home buyers. Declining affordability conditions also mirrors weakness for single-family builder sentiment, which has now declined for 10 straight months and stands at half the level of a year ago. This will be the first year since 2011 to see a decline for single-family starts. And given expectations for ongoing elevated interest rates due to actions by the Federal Reserve, 2023 is forecasted to see additional single-family building declines as the housing contraction continues. In 2024, a housing rebound is projected as interest rates fall back and demand returns from the sidelines.”

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.

Spec Square Foot Prices Skyrocket in 2021 

• Median square foot prices (excluding record-high improved lot values) for new for-sale single-family detached (SFD) homes started in 2021 increased 19%, according to NAHB’s analysis of the latest Survey of Construction data. Increases for square foot prices in new custom SFD homes were more moderate, averaging 5%.
• Median sale and contract prices per square foot of floor area went up across all US regions, undoubtedly, reflecting skyrocketing building materials prices and fast rising labor costs that pummeled home building in 2021.
• In the for-sale market, the Pacific and New England divisions registered the highest median prices. Half of new for-sale single-family detached homes started in these divisions in 2021 were sold at prices exceeding $206 and $198 per square foot of floor area, respectively, paid on top of the most expensive lot values in the nation. 

Read more in this Eye on Housing blog post.