JCHS Releases New Household Projections

by Dan McCue

Research Manager
Today, the Joint Center for Housing Studies posted its latest household projections. These new projections incorporate several updates to data that were made since our last projections in 2010. The 2013 projections use the Census Bureau 2012 Population Projections (released in late 2012 and early 2013), and also use more recent data to derive headship rates (ratios of households per person), specifically using data from the 2011-2013 Current Population Estimates and Current Population Survey March Supplements.
Aside from the new data, the JCHS projection methodology remains largely unchanged from that used to create the 2010 series. The most notable change is that unlike in 2010 we do not make any adjustment to the Census Bureau’s population projections, as our concerns about what seemed to be overly high estimates of future immigration levels have now been addressed in the latest projections from Census. Since we are using the 2012 Census population projections as published, the 2013 JCHS household projections now contain high, middle, and low series, whereas the 2010 projections only had a high and a low series. The projections are also carried out an additional ten years, and so now extend to 2035.
The 2013 JCHS household projections are consistent with those from 2010.  In the near term (2015-2025), they call for annual household growth rates ranging from 1.16 million in the low series to 1.32 million in the high series, not far from the span of 1.15–1.36 million per year in our 2010 projections.  Differences between the 2013 and 2010 series largely follow differences in the underlying population projections (Figure 1).  Some difference is also due to updated headship rates, which are calculated for every 5-year age group by race and averaged across the years 2011, 2012, and 2013.  These are now slightly lower overall than those from 2007, 2008, and 2009 used in the 2010 projections (Figure 2).  (Click to enlarge.)

032714_mccue_figure1_sm
Sources: 2008 and 2012 Census Bureau Population Projections and 2010 JCHS Household Projections.
Note: Adult headship rates use CPS/ASEC household counts and Census July 1 Estimates of the population age 15 and older.  Source: JCHS tabulations of Census Bureau data.032714_mccue_figure2_sm
Like the 2010 projections, our 2013 household projections also anticipate substantial growth in minority, senior, and single-person households in the coming decades (Figure 3).  In the 2015-2025 period for instance, minorities are projected to account for just over 76 percent of all household growth in each of the low-, middle-, and high- projections, with Hispanics alone accounting for 40 percent of total household growth. Additionally, growth in the number of households age 65 or older during this period is also expected to be 91 percent of the net change in households under the low projection and 81 percent in the high projection. As a result of the growth in senior households, single-person (4.4-4.7 million) and married-without-children households (4.0-4.3 million), two of the largest groups that comprise senior households, will together comprise nearly three quarters of all household growth in 2015-2025, but the number of married with children households will also see some growth as millennials age.
032714_mccue_figure3_sm

Source: 2013 JCHS Household Projections.

Tenure Scenarios Presented as Well
The report also includes a simple homeowner and renter projection scenario.  Under a steady-state scenario of constant homeownership rates by age, race, and household type, this analysis offers one look at how demographic changes in the composition of households may influence future homeownership rates. In this scenario, changing demographics are expected to be a positive influence on the overall homeownership rate through about 2025 (Figure 4).  After that time, the upward influence of the aging of the population gives way to greater downward pressure from young adult and minority household growth.  Figure 4 shows how downward pressure on homeownership rates is steepest in the high projections which, unlike the middle- and low-projections, expects no demographically driven growth in homeownership rates through 2025.
032714_mccue_figure4_sm
Note: Homeownership rates by age, race/ethnicity, and household-type are held constant. 
Source: Joint Center for Housing Studies tabulations of 2013 JCHS Household Projections.
Users of these estimates are cautioned that that they should be considered baseline projections and not a growth forecast. Actual household growth could deviate dramatically over short periods of time, as the projections reflect long-run, demographically driven trends and do not allow for any adjustments either upward or downward in response to changing economic conditions or cyclical factors.  Indeed, favorable economic conditions could increase headship rates above levels assumed in the projection and increase household growth, while a variety of factors could weigh down economic opportunities and result in lower household formation rates that depress future household growth.  

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BFRI: Residential Remodeling in January 2014 is UP 6%

Residential Remodeling in January 2014
Data Release: March 20, 2014

Residential remodels authorized by building permits in the United States in January were at a seasonally-adjusted annual rate of 3,240,000. This is 6% up from the revised December rate of 3,048,000 and is down 1% from the January 2013 estimate of 3,276,000.

Regional Residential Remodeling

Seasonally-adjusted annual rates of remodeling across the country in January 2013 are estimated as follows: Northeast, 603,000 (up 5% from December and down 21% from January 2013); South, 1,496,000 (up 27% from December and up 22% from January 2013); Midwest, 406,000 (down 29% from December and down 58% from January 2013); West, 894,000 (up 6% from December and up 15% from January 2013).

About the BuildFax Remodeling Index

The BuildFax Remodeling Index (BFRI) is based on construction permits for residential remodeling projects filed with local building departments across the country. The index estimates the number of properties permitted. The national and regional indexes are based upon a subset of representative building departments in the U.S. and population estimates from the U.S. Census. The BFRI is seasonally-adjusted using the X12 procedure.

Historical Values and Subscription Information

The BuildFax Remodeling Index is available as a monthly email with an Excel spreadsheet attachment. Each month’s release contains the full list of historical values for the country and each of the four regions, going back to August of 2004. When you subscribe, you will receive the most recent release within one business day. Click here to subscribe for $150/year. You can also subscribe to the free data release mailing list, which delivers the information you see on this page by email each month.

About BuildFax

BuildFax is the creator of the first and only national database of historical building permit data. Headquartered in Asheville, North Carolina, BuildFax has created a proprietary property intelligence engine that contains building and permitting information from 5,000+ cities and counties throughout the country. As the best and only source of a structure’s “life story,” the BuildFax database continues to grow, currently covering over 60 percent of the U.S. commercial and residential building stock with over 6 billion data points.

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BFRI: Residential Remodeling in December 2013 is UP 1%

Residential Remodeling in December 2013

Data Release: February 18, 2014

Residential remodels authorized by building permits in the United States in December were at a seasonally-adjusted annual rate of 2,937,000. This is 1% up from the revised November rate of 2,900,000 and is 9 percent above the December 2012 estimate of 2,704,000.

Regional Residential Remodeling

Seasonally-adjusted annual rates of remodeling across the country in December 2013 are estimated as follows: Northeast, 570,000 (down 7% from November and down 27% from December 2012); South, 1,188,000 (up 1% from November and up 14% from December 2012); Midwest, 548,000 (down 10% from November and down 3% from December 2012); West, 837,000 (up 13% from November and up 16% from December 2012).

Viewing the Economic Recovery Through Remodels

“Except for the Northeast, all regions (and the nation as a whole) saw increases in residential remodeling activity in 2013 over 2012″ said Joe Emison, Chief Technology Officer at BuildFax.

About the BuildFax Remodeling Index

The BuildFax Remodeling Index (BFRI) is based on construction permits for residential remodeling projects filed with local building departments across the country. The index estimates the number of properties permitted. The national and regional indexes are based upon a subset of representative building departments in the U.S. and population estimates from the U.S. Census. The BFRI is seasonally-adjusted using the X12 procedure.

About BuildFax

BuildFax is the creator of the first and only national database of historical building permit data. Headquartered in Asheville, North Carolina, BuildFax has created a proprietary property intelligence engine that contains building and permitting information from 5,000+ cities and counties throughout the country. As the best and only source of a structure’s “life story,” the BuildFax database continues to grow, currently covering over 60 percent of the U.S. commercial and residential building stock with over 6 billion data points.

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DofN: Real Home Prices and Real Borrowing Costs Since the Bottom

Real Home Prices and Real Borrowing Costs Since the Bottom

POSTED TUESDAY, FEBRUARY 04 2014

previously showed that continuously declining interest rates since 1980 have been a boon to the buying power of homeowners despite stagnant incomes. After the bursting of the housing bubble last decade and subsequent fall in home prices, the historically low interest rates that followed led to remarkably low payments for borrowers who could still qualify for mortgages these past few years. But we’ve long since put in a bottom for home prices. According to Case-Shiller’s 20 city aggregate that bottom came in February of 2012.

The chart above shows the change in real home prices (blue line) since the bottom. After February 2012 home prices began to rise while mortgage rates continued to fall. They fell enough in fact that their declines offset the rise in real home prices for another 8 months. That is, a borrower could obtain a lower mortgage payment via falling borrowing costs despite rising home prices. The bottom in terms of a monthly mortage payment didn’t come till October of 2012. The red line shows how mortgage payments have changed since then.

In short, real home prices have risen about 17% since the February 2012 bottom, but the real price in terms of borrowing costs have risen just over 26%. I don’t expect rates to leap in the near future, but if rates continue to rise with Fed tapering (they’re up about one percentage point from the bottom) it could have a notable impact on affordability for first-time buyers. On the other hand, low existing home inventory suggests there hasn’t been a significant falloff in demand yet and mortgage rates have been trending down again recently as well.

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BFRI: BuildFax Residential Remodeling Index in November 2013 is Down 20%

Residential Remodeling in November 2013

Data Release: January 17, 2014

Residential remodels authorized by building permits in the United States in November were at a seasonally-adjusted annual rate of 2,542,000. This is 20% down from the revised October rate of 3,185,000 and is 18 percent below the November 2012 estimate of 3,087,000.

Regional Residential Remodeling

Seasonally-adjusted annual rates of remodeling across the country in November 2013 are estimated as follows: Northeast, 614,000 (down 12% from October and down 29% from November 2012); South, 1,301,000 (up 1% from October and up 7% from November 2012); Midwest, 486,000 (down 31% from October and down 28% from November 2012); West, 546,000 (down 35% from October and down 30% from November 2012).

Viewing the Economic Recovery Through Remodels

“We saw a lower-than-expected November 2013 in all regions but the South, which may have been an after-effect of the October government shutdown,” said Joe Emison, Chief Technology Officer at BuildFax, “although we still expect 2013 to be a bigger year for remodeling than 2012.”

About the BuildFax Remodeling Index

The BuildFax Remodeling Index (BFRI) is based on construction permits for residential remodeling projects filed with local building departments across the country. The index estimates the number of properties permitted. The national and regional indexes are based upon a subset of representative building departments in the U.S. and population estimates from the U.S. Census. The BFRI is seasonally-adjusted using the X12 procedure.

Historical Values and Subscription Information

The BuildFax Remodeling Index is available as a monthly email with an Excel spreadsheet attachment. Each month’s release contains the full list of historical values for the country and each of the four regions, going back to August of 2004. When you subscribe, you will receive the most recent release within one business day. Click here to subscribe for $150/year. You can also subscribe to the free data release mailing list, which delivers the information you see on this page by email each month.

About BuildFax

BuildFax is the creator of the first and only national database of historical building permit data. Headquartered in Asheville, North Carolina, BuildFax has created a proprietary property intelligence engine that contains building and permitting information from 5,000+ cities and counties throughout the country. As the best and only source of a structure’s “life story,” the BuildFax database continues to grow, currently covering over 60 percent of the U.S. commercial and residential building stock with over 6 billion data points.

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JCHS: (LIRA)Double Digit Growth in Remodeling Spending Expected Through Mid-Year

Double Digit Growth in Remodeling Spending Expected Through Mid-Year

 by Abbe Will
Research Analyst
The home remodeling market should see strong growth in 2014, according to our latest Leading Indicator of Remodeling Activity (LIRA).  The double-digit gains in annual home improvement spending projected for the first half of the year should moderate some to just under 10 percent by the third quarter.The ongoing growth that we’ve seen in home prices, housing starts, and existing home sales is also being reflected in home improvement activity. As owners gain more confidence in the housing market, they are likely to undertake home improvements that they have deferred.  However, the strong growth for this cycle may start to ebb a bit beginning around midyear.  By that time, we’ll be approaching the pre-recessionary levels of spending, and with borrowing costs starting to creep back up, growth rates are likely to slow some.  (Click chart to enlarge.)

For more information about the LIRA, including how it is calculated, visit the Joint Center website.

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NRR: Lumber, log prices up. Home recovery expected to rise for next 3 years

Lumber, log prices up. Home recovery expected to rise for next 3 years

 

December 23, 2013

Timber Industry Report
By Rick Sohn PhD.
Umpqua Coquille LLC

Mills are competing for logs and prices are rising. This month is good for homebuyers, including a slight drop in Median Home values and a big drop in interest rates. Seven-year trend of lumber, logs, housing, and mortgage statistics are shown below.

chart-duy-dec13

Interpretation

Lumber and logs are both in nice rising price trends. Logs are climbing into a winter price range as mills compete for a limited supply to fill inventory. Economists say we are in a recovering housing market that could last another 3 years anyway. Expect to see continued strength in lumber and logs through the winter and beyond, with seasonal dips.

Building Permits were reported up to a record high level for the year, and as the media likes to say, finally recovering to the 2008 levels. That is NOT saying much. You will hear comparisons to 2008 a lot, since it was such a volatile, falling year. The 2008 high was 1.2 million permits and the low was 554,000. We will have made some real progress when housing and other stats are compared to 2007, or better yet, 2006.

The weekly average for 30-year fixed rate mortgages is bouncing around. It was at 4.57 the week of Sept 13, but dipped as low as 4.10, in the first week of November, and now is at 4.22. It is bouncing around these low levels.

At the same time, the Zillow report shows clearly that median home prices have plateau’ed and have started to dip slightly. The high for this cycle was August’s $163,000 national median. This mirrors the data for Portland from the Regional Multiple Listing Service data which also shows a home price drop, and reduced inventory of homes for sale, which fits the season. This is all very favorable for homebuyers.

In speaking with one local producer who sells into the European Clears market, recovery in that market has yet to occur. This coincides with the generally lackluster European economy, which is has worldwide impacts.

For the second month in a row, Housing Starts are not reported, due to the Government Shutdown. Data “Does not meet Production Standards.” According to the US Dept of Commerce, the results for September, October and November will be reported on Dec 18 – lets hope for a pleasant surprise.

Data reports used with permission of: 1Random Lengths. Kiln Dried 2×4-8′ PET #2/#2&Btr lumber. 2RISI, Log Lines. Douglas-fir #2 Sawmill Log, Southern Oregon region. 3 US Dept of Commerce. 4Regional Multiple Listing Service RMLSTM courtesy of Janet Johnston, Prudential Real EstateProfessionals, Roseburg, OR. Portland, Oregon data. 5Freddie Mac. National monthly average. 6Mortgage-X, national average, most recent week. 7Zillow.com, National Median Issue #6-11. © Copyright Rick Sohn, Umpqua Coquille LLC please e-mail rsohn@umpquacoquille.com

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