Despite the coronavirus pandemic, housing activity keeps advancing, researchers say. Analysts say the growth, despite COVID's persistence, “indicates underlying consumer demand.”
According to the BuildFax Housing Health Report for July, published this week, single-family housing authorizations continue to rise substantially month over month.
In addition, they said, existing housing activity increased, suggesting a potential bounce back from April lows, adding that, “growth in housing activity, despite COVID-19 persistence, indicates underlying consumer demand.”
Housing activity has the potential to return to its early 2020 growth trajectory, said Jonathan Kanarek, Managing Director at BuildFax.
“Existing housing supply has shown a dramatic bounce back. Maintenance activity, for instance, grew from double-digit declines in April to a healthy increase this month,” he said. “We’re still seeing some hesitance in the market, including the conflicting signals within new construction and decreases in construction spend. However, growth in new and existing housing activity signify consumers’ underlying need for a larger and healthier housing stock.”
More specifically, BuildFax reports, in July, single-family housing authorizations increased 6.83% month-over-month but decreased 5.28% year-over-year.
The month-over-month increase may be a result of builders reacting to a future rise in prospective homebuyers,” the researchers note. “In recent months, historically low mortgage rates and steadily declining unemployment have started to positively shift the home buying outlook. While construction spending is still falling, it’s doing so at lower rates each month.”
As for existing housing activity, following steep declines in April, the strain has been easing steadily, and July was no exception. Maintenance volume increased 5.60%, and spend declined 0.75% year over year. Additionally, remodel volume—a subset of maintenance that includes renovations, additions, and alterations—increased 2.59% while spend decreased 1.59% year over year.
BuildFax conducted its research by examining U.S. properties between 2013 and 2020. Their data is seasonally adjusted and imputed to reflect numbers representative of the entire country. The latest estimates, highlighted above, are as of August 8, 2020.