APA ON EWP
APA’S MARKET RESEARCH Director Joe Elling discusses the crucial role homebuilding plays in post-COVID-19 economic recovery and what it means for the industry.
Homebuilding plays critical role in economic recovery BY JOE ELLING SUPPORTED BY THE Federal Reserve’s easing of monetary policy as the U.S. economy fell into recession from business closings in March and April of 2020, the rate on a 30-year fixed rate mortgage fell to a record low of 2.75%. This, plus the sense of urgency to move to homes offering more space to accommodate work from home and privacy, led to a surge in new and existing home sales in the third quarter of 2020, and sales have remained at robust levels since (see Figures 1 and 2). The strength in new home sales sent a clear message to homebuilders to increase the rate of construction, and they responded as well as possible. In the fourth quarter of 2020, single-family starts averaged a seasonally adjusted annual rate of 1.23 million units. Single-family starts fell back to an annual rate of 1.16 million units, as homebuilders were challenged by fractured supply chains that delayed the arrival of critical building materials (see Figure 3).
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n Building Products Digest n July 2021
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