Current Report – April 2017

Executive Summary

  • The national housing market showed modest weakening this month as the April Housing Tides Index fell to 72.4 from 73.5 in March.[1] This marks the lowest Index value in the last six months, though the Index is little changed from a value of 72.5 in April 2016.
  • The construction unemployment rate rose to 9.4% in January, up considerably from a 4.5% rate in June 2016.[2] It’s difficult to reconcile the reported construction unemployment rate with the tales of labor scarcity coming from the industry in recent years, though part of the disconnect may be due to the grouping of workers into the larger construction supersector.
  • Median asking rents for two-bedroom units increased nationally in January to $1,536 per month, contributing in part to the fall in this month’s Index value.[3] Moreover, asking rents increased in 37 of the 41 major metropolitan areas covered by Housing Tides.
  • Housing inventory remains below our healthy target of six months of supply, and with just 678k homes on the market in February this represents just four months of supply at the current sales rate.[4] For-sale inventory is down 12.9% from February 2016 when there were over 100k more homes on the market.
  • The U.S. unemployment rate fell to 4.9% in February after increasing to 5.1% in January.[5] We interpret this level of unemployment as balanced between supporting wage growth while enabling employers to find needed workers.

[1] March Housing Tides Index downwardly revised from 73.6 to 73.5 [2] Bureau of Labor Statistics; Retrieved and aggregated by Dr. Bernard Markstein for Associated Builders and Contractors, Inc. [3] Zillow [4] Redfin [5] Bureau of Labor Statistics

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February 2017

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