Multifamily Market Outlook January 2018

Multifamily Vacancy Index and Rental Vacancy Rate through 2017 Quarter 4
Multifamily Mortgage New Business Volume

Fannie Mae’s monthly multifamily new business volume, a proxy for the overall multifamily mortgage market, totaled $6.6 billion in November. That is 27% more than the volume in October – $5.2 billion – and 29% more than the volume in November 2016. Over the first eleven months of 2017, Fannie Mae’s monthly new business volume totaled $58.6 billion, 14% greater than the $51.5 billion over the same period in 2016.

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 0.7% in December to 2.8 million on a seasonally adjusted basis. Over the past year, the number of residential construction jobs has risen by 3.2%. Relative to the average number of residential construction jobs between 2001 and 2003 – 2.71 million – the current number of jobs is 102% of that level.

Nationally, however, residential builders are recovering more slowly than residential specialty trade contractors. In December, there were 781,000 residential builder jobs, 1.1% more than last month and 3.6% above its December 2016 level. The current number is about 97% of its 2001-2003 average level of 808,000.

Meanwhile, the number of residential specialty trade contractor jobs totaled 1.97 million in December, 0.5% more than last month and 3.1% above its December 2016 level. The current number is 104% 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 rose by 1.2% to $1,034 in November. Over the past year, their average weekly earnings increased by 5%. Average weekly earnings paid to specialty trade contractors increased by 0.7% to $1,083 in November. Over the past year, their average weekly earnings increased by 2.4%. Currently, residential building employees’ average weekly earnings is 95% 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 November, residential builders’ earnings, on average, worked out to $28.32 per hour while specialty trade averaged $28.06 per hour. Meanwhile, residential builders averaged 36.5 work hours per week while specialty trade contractors averaged 38.6 hours. The data indicates that residential builders had roughly similar hourly earnings to specialty trade contractors, but worked fewer hours – averaging only 95% of the hours that specialty trade contractors worked.

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 November 2017 are listed below. Jing Fu, a NAHB Senior Economist, provides additional coverage of the multifamily housing sector each month for Multi-Housing News. Her latest narrative can be found here.

Mortgage Rates Rise in 2017, but Remain Low – Jan. 17

Apartment and Condominium Absorption Increased in Q2 2017 – Jan. 10

Housing Share of GDP: Third Quarter 2017 – Dec. 21