Multifamily Market Outlook: October 2017 Data

Multifamily Vacancy Index and Rental Vacancy Rate through 2017 Quarter 2

Residential Construction Employment

NAHB calculations based on employment data from the Bureau of Labor Statistics (BLS) show that the number of residential construction jobs declined by 0.1% in September to 2.7 million on a seasonally adjusted basis. Over the past year, the number of residential construction jobs has risen by 3.1%. Relative to the average number of residential construction jobs between 2001 and 2003 – 2.71 million – the current number of jobs is 99% of that level.

Nationally, however, builders are recovering more slowly than specialty trade contractors. In September, there were 757,000 residential builder jobs, 0.5% less than last month and 1.4% above the September 2016 level. The current number is about 94% of its 2001-2003 average level of 808,000.

Meanwhile, the number of residential specialty trade contractor jobs totaled 1.94 million in September, reflecting the unchanged monthly growth and an annual increase of 3.7%. 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 increased by 0.2% to $1,015 in August. Over the past year, it increased by 3.4%. Average weekly earnings paid to specialty trade contractors remained at $1,073 in August, and rose by 2.6% over the past year. 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 August, residential builders’ earnings, on average, worked out to $28.11 per hour while specialty trade contractors averaged $27.94 per hour. Meanwhile, residential builders averaged 36.1 work hours per week while specialty trade contractors averaged 38.4 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 $4.1 billion in August. That is 27% less than the volume in July – $5.6 billion – and 16% less than the volume in August 2016. Over the first eight months of 2017, Fannie Mae’s monthly new business volume totaled $40.4 billion – 21% greater than the $33.5 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 September 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.