STEEL FRAMING ALLIANCE | FRAMEWORK ONLINE
May 7, 2008

MARKETPLACE

Residential Market May Be Stabilizing
February’s 1.0% fall in residential construction spending was the smallest in almost two years because of an outsized 11% month to month rise in remodeling spending. This is suspect. Estimates of remodeling spending are from a different and less reliable source than estimates for the rest of construction. Large revisions are frequent. There is a risk that residential construction spending is not as strong as now reported.

However, other, usually more reliable, February housing data suggests that the housing market may be stabilizing. Housing starts are 6.5% above the December low point. Total sales of homes appears to have stabilized. The inventory of new and existing homes for sale is now falling quickly because homebuilders have slowed work to cut the completion of new home 9% in February.

The forecast expects an 11.6% fall in residential construction spending this year and a 10.6% gain next year. Housing starts, 1.065 million in February, will dip slightly more than rise to over 1.1 million by year end and to nearly 1.4 million by the end of 2009. This recoups only about one-third of the decline in 2006-08.

Monthly Figures (1)
(latest actual values)
Actual
Forecast
Northeast (% change is period
versus same period, previous year)
Jan-08 Feb-08 2005 2006 2007 2008 2009
141
102
189
171
143
130
144
-25.0%
-23.9%
7.4%
-9.7%
-16.3%
-9.4%
11.2%
               
Midwest
159
159
357
284
206
164
198
-16.3%
-2.5%
0.5%
-20.5%
-27.5%
-20.2%
20.2%
South
534
555
1,001
912
676
542
658
-23.6%
-30.5%
10.4%
-8.9%
-25.9%
-19.9%
21.5%
West
237
249
551
445
319
213
274
-27.3%
-36.5%
7.3%
-19.2%
-28.4%
-33.2%
28.8%
Total
1,071
1,065
2,073
1,812
1,344
1049
1274
-23.7%
-28.4%
6.3%
-12.6%
-25.8%
-22.0%
21.5%
Total Single-family
758
707
1719
1,474
1,038
721
928
-32.5%
-40.5%
7.1%
-14.2%
-29.6%
-30.5%
28.6%
Total Multi-family
313
358
354
338
306
327
346
11.8%
19.7%
2.6%
-4.7%
-9.5%
7.1%
5.8%
               
New Home Sales (2)
601
590
1,279
1,049
774
594
712.5
-32.5%
-29.8%
6.5%
-18.0%
-26.3%
-23.2%
20.0%
Manufactured Home Shipments
92
94
148
118
95
93
103
-2.1%
1.1%
13.8%
-20.0%
-19.3%
-2.3%
10.5%

(1) Monthly figures are seasonally adjusted at annual rates (SAAR figures).
(2) Based on a survey of homebuilders; excludes homes built under contract and multi-family rental
units).
Actuals: U.S. Department of Commerce, National Association of Realtors, Freddie Mac.
Forecasts and table: Reed Construction Data.
Mfg. home shipment data for Nov. and Dec.

Source: www.reedconstructiondata.com, April 10, 2008

         
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Brought to you by the Steel Framing Alliance (SFA) on the first Wednesday of each month, Framework Online arms you with the latest news and commentary on the steel framing and construction industries. In addition to industry headlines, trends and project profiles, Framework Online provides information and ideas that will better enable members to increase their participation in the residential and commercial construction markets.