Further Exasperating U.S. Home Affordability Issues Nationwide
According to the new National Association of Home Builders newly released Q1, 2019 Home Building Geography Index (HBGI), in a sign that U.S. housing affordability is becoming a growing issue nationwide, 'exurbs' (a region or settlement that typically lies outside a city and usually beyond its suburbs and that often is inhabited chiefly by well-to-do families) were the only regions that registered single-family permit growth on a year-over-year basis.
The HBGI is a quarterly measurement of building conditions across the country and uses county-level information about single- and multifamily permits to gauge housing construction growth in various urban and rural regions.
"The HBGI is another indicator finding that housing affordability is a root cause of soft single-family permit issuance nationwide," said NAHB Chairman Greg Ugalde. "A shortage of buildable and affordable lots is forcing builders to increasingly look further outside of suburban and metropolitan areas to find cheaper land that provides more building opportunities."
Exurbs, which the HBGI defines as outlying counties of large metro areas with at least 1 million residents, were the only region to show net single-family permit growth when comparing the first quarter of 2019 data relative to the starting quarter of 2018, with a 1.6 percent gain. But exurbs only consist of 9 percent of single-family construction nationally.
Relatively sparsely populated areas that include exurbs, small towns, rural communities and outer suburbs of small metropolitan markets have shown the largest annual single-family growth over the past four quarters while other areas have shown either no change or declines.
"The HBGI data is consistent with the fact that housing costs are increasing fastest in large metro suburban counties and smaller metro areas with populations under 1 million where demand for housing is high but supply constraints are tight," said NAHB Chief Economist Robert Dietz. "Supply-side issues that are hurting affordability and raising costs for builders include excessive regulations, labor shortages, rising material costs and a dearth of buildable lots in mid- to high population centers."
The market share of apartment construction mirrored the single-family sector. Over the last year, multifamily permits declined in the areas where apartment construction is most concentrated - small and large metropolitan areas. At the same time, multifamily growth occurred in exurbs and other outlying areas. However, these markets represent just more than 10 percent of multifamily permit issuance.
According to CoreLogic's latest Home Price Index for October 2019, U.S. home prices rose both year over year and month over month. Home prices increased nationally by 3.5% from October 2018. On a month-over-month basis, prices increased by 0.5% in October 2019.
3.7% of all U.S. mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure) in August 2019, representing a 0.2 percentage point decline in the overall delinquency rate compared with August 2018, when it was 3.9%.
14.4 million residential properties in the United States were considered equity rich, meaning that the combined estimated amount of loans secured by those properties was 50 percent or less of their estimated market value.
According to the California Association of Realtors, amid the most favorable mortgage interest rates in nearly three years, California's housing market recorded a third consecutive year-over-year sales increase as month-over-month sales remained essentially flat.
There was a total of 143,105 U.S. properties with foreclosure filings in the third quarter, down 6 percent from the previous quarter and down 19 percent from a year ago to the lowest level since Q2 2005.
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