Market Indicators for the Home Building Industry in Northwestern Wisconsin April 2012 Volume 2, Issue 4
Department of Labor Predicts Growth for Construction by 2020 The U.S. Department of Labor’s Bureau of Labor Statistics (BLS) recently updated its Occupational Outlook Handbook with its latest employment projections for the 2010-20 decade, which includes predictions that construction industry employment will add 1.8 million jobs. All areas of construction are projected to contribute to its rapid 33 percent job growth; however, employment in the industry is not expected to regain its pre-recession peak of 7.7 million – reached in 2006 – by the end of the decade. Current construction employment (including residential and commercial) is 5.55 million. More than one-fourth of the projected 30 fastestgrowing occupations are related to construction, including stonemasons, pile-driver operators, brick and block masons, glaziers, reinforcing iron and rebar workers, as well as help-
ers in a variety of construction trades. No construction occupation made the list of occupations with the largest projected declines. While jobs requiring only a high school diploma will experience the slowest growth rate, occupations that typically require apprenticeships, such as those in construction, are projected to grow the fastest of all educational categories – by 22.2 percent. It is projected that nearly two-thirds of the 54.8 million job openings over the decade will come as a result of retirements as the Baby Boom generation moves entirely into the 55-and-older category by 2020. Replacement needs are expected in every occupation, even those with projected declines in employment.
Real Estate Tax Deduction As tax filing season comes to a close, now is a good time to take a look at some of the basic facts concerning the
includes items like employer-paid payroll tax and health insurance
deduction for property taxes paid on an owner-occupied ∙ For households earning between $100,000 and $200,000, home. As homeowners past and present know, this
the average tax savings was more than $800.
deduction helps offset the cost of home ownership. A few facts about the deduction from 2010 data:
This deduction has become just that much more important in recent years, as home prices have plunged while
∙ The property tax deduction benefited 32.9 million home property tax payments have remained about the same, owning households for a total savings of $23 billion
leading to higher effective tax rates on homeowners.
∙ Almost 80% of the tax benefit was collected by households earning less than $200,000 in economic income
House
Resolution
557,
sponsored
by
U.S.
∙ Household income is the sum of all income earned by Representative Pascrell of New Jersey, expresses support for individuals filing on the same tax form; economic income this important home ownership tax rule. Northland Area Builders Association, 29148 Mail Road, Danbury, WI 54830 Tel: 715-259-3486 | Fax: 888-825-8073 Email: naba@centurytel.net | Online: www.northlandareabuilders.com
Housing Dashboard 2012
Wisconsin Unemployment Rate
Wisconsin Construction Employment
(seasonally adjusted)
(seasonally adjusted)
6.9%
92,300
Feb
Wisconsin Privately Owned Housing Starts (# of units) 369
Jan 6.9% 90,000 Dec 7.1% 85,800 2011 Nov 7.3% 83,700 2011 Source: US Bureau of Labor Statistics & US Census Bureau
233 328 491
2010
71%
2009
70.4%
Source: US Census Bureau
1 & 2 Family Housing Permits
Ashland County
Bayfield County
Burnett County
Sawyer County
Washburn County
February January
0 0
1 2
0 2
1 4
1 0
2011 Year End Totals
1
57
93
82
47
2011-2012
Source: US Census Bureau/Wisconsin Builders Association
Wisconsin Projected Households 2005 - 2030
2000
2005
2010
2015
2025
2025
2030
Ashland County
6718
6935
7160
7370
7545
7674
7735
Bayfield County
6207
6624
7045
7484
7857
8135
8289
Burnett County
6613
7162
7670
8179
8629
8943
9120
Sawyer County
6640
7233
7830
8442
8952
9343
9599
Washburn County
6604
7151
7676
8219
8707
9067
9335
National
2084556
2208571
2322062
2442354
2557504
2654905
2738477
Source: US Census Bureau
Northland Area Builders Association, 29148 Mail Road, Danbury, WI 54830 Tel: 715-259-3486 | Fax: 888-825-8073 Email: naba@centurytel.net | Online: www.northlandareabuilders.com
Framing Lumber Prices
CME Futures Price
Wisconsin Homeowner Vacancy Rates
2011
2010
(per 1000 board feet)
Random Lengths Composite Price
April 6
296
267
First Quarter
1.8
1.2
Mar 23
301
255
Second Quarter
1.9
1.7
Feb 24
284
266.9
Third Quarter
2.5
1.9
Jan 27
ÂŁ284
ÂŁ240
Fourth Quarter
2.3
1.6
Source: US Census Bureau
Source: NAHB
2012 Terms on Mortgages
Fixed rate 30 year conventional
Effective Rate (contract interest rate plus fees and charges)
Share of total market
Fixed rate 15 year conventional
Effective Rate (contract interest rate plus fees and charges)
Share of total market
February
4.51
64.3
4.5
2.2
January
4.55
66.5
4.40
1.8
Source: Federal Housing Finance Agency
Every 1,000 new homes built generates $209.5 million in income for Wisconsin residents & $7.4 million in state and local government revenue. Wisconsin income provided by home construction in 2005: Wisconsin income provided by home construction in 2010: WISCONSIN WAGES LOST DUE TO HOUSING SLUMP:
$7.5B $1.3B $6.2B
The Employment Situation for March - Disappointing The Bureau of Labor Statistics (BLS) released the Employment Situation report for March. Payrolls increased by 120 thousand in March, an unexpected deceleration after strong gains in January and February that averaged 258 thousand. Some of the slowdown could be payback for a warm weather surge that boosted January and February. Even with the deceleration the first quarter average of 212 thousand is an improvement over the 164 thousand average in the fourth quarter, but a slightly shorter average workweek suggests a strong bounce back in April is not a given. The unemployment rate edged down to 8.2
from 8.3 percent, based on a decline in the labor force (164 thousand), rather than strong employment growth. Overall, the report is disappointing. A quick return to the strong growth in payrolls and the labor force in recent months would be welcome, but is not a foregone conclusion.
Northland Area Builders Association, 29148 Mail Road, Danbury, WI 54830 Tel: 715-259-3486 | Fax: 888-825-8073 Email: naba@centurytel.net | Online: www.northlandareabuilders.com
The Housing Recovery is Slow Going But Things Are Improving There has been a flurry of
While combined U.S. housing
Total job growth continues
media stories regarding the latest
starts lost some ground in March, this
upward, providing added consumer
housing data that suggest the recent
was almost entirely due to typical
confidence
momentum in the housing market has
month-to-month volatility on the
income up.
stalled and the industry is heading
multifamily side. The fact is that single-
No one is anticipating that an
toward another downturn.
family and multifamily starts and
upward path for housing will run in a
Although the latest monthly
permits were all stronger in the first
straight-line trajectory. The economy is
housing data showed modest declines,
quarter of 2012 than they were in the
in an uneven recovery and we can
the less volatile quarterly data have
fourth quarter of 2011, indicating that
expect some corresponding ups-and-
continued
the
downs in the housing market in the
to
show
modest
improvement. Consequently, there is
market
continues
to
slowly
strengthen, albeit in fits and starts. We are also seeing the long-
plenty of evidence for retaining a
improvement
in
and
pushing
personal
months ahead. However, NAHB believes that
cautious optimism for a gradual
term
housing
on the whole, we can expect a slow
recovery. While the February new-
conditions continuing to take hold in a
and gradual recovery in housing starts,
home sales rate dipped a nominal 1.6
growing number of local markets. The
home sales and the overall housing
percent, sales are still running 11.4
April NAHB/First American Improving
market in 2012. We will provide more
percent above their year-ago level and
Markets indicates that 101 individual
details on our perspective on national
at the rate expected for the slow
metros are showing measurable and
and regional housing trends at the
recovery. Meanwhile, the inventory for
consistent signs they are heading in
Spring NAHB Construction Forecast
new-homes for sale remains at an all-
the right direction.
Webinar on Wednesday, April 25 from
time record low.
2 p.m. to 4 p.m. Eastern time.
New Home Sales: Up or Down? New home sales, as reported stance, to be confident that a change is title question is up. jointly by the Census Bureau and HUD, statistically significant 90% of the time
The new home inventory for
came in at 328,000 for March (on a sea- the monthly change must be at least sale reached another new low at sonally-adjusted annual basis). The im- 20.7%. A monthly change of that size has 144,000 and the number of new homes mediate take is that the March data is occurred 1% of the time since the series completed and for sale dropped to down 7.1% from the revised February started in 1963. level of 353,000. But the February figure
48,000. If they were spread out evenly
A more reliable quarter-to-quar- across every county, that would be less
was revised up 13% so that March figure ter comparison shows a modest 3.7% than 14 new homes per county. As the is above the previous estimate for Feb- increase from the fourth quarter 2011 to employment and the economy rebound, ruary. In fact, the new February esti- the first quarter 2012. Viewed in this the extremely low inventory will bemate is the highest level since the end of manner, new homes sales have been come a problem in selected markets the home buyer tax credit in spring rising modestly since the third quarter of where additional lots are not readily 2010.
2011 (they were down the smallest available and the industry struggles to New home sales estimates have amount possible, 1,000, between the rebuild itself.
one of the largest statistical variances of fourth quarter of 2010 and the first any of the major housing data. For in- quarter of 2011). So, the answer to the