The latest data out of various US home building and sales agencies show a housing construction market much hotter than was anticipated in most projections for 2017.
Construction spending in the US during November 2017 was estimated at a seasonally adjusted annual rate of US$1,257 billion, 0.8 per cent above the revised October estimate of US$1,247 billion, reported the US Commerce Department Tuesday. The November figure is +2.4 per cent above the November 2016 estimate of US$1,227 billion.
Spending on private construction was at a seasonally adjusted annual rate of US$964 billion, +1 per cent above the revised October estimate of US$955 billion. In November, the estimated seasonally adjusted annual rate of public construction spending was US$293 billion, +0.2 per cent above the revised October estimate of US$292 billion.
On a year-over-year basis, private residential construction spending is up +8%. Non-residential spending is down +3% year-over-year. Public spending is up +2% year-over-year.
US Home Prices: October 2017
CoreLogic® also Tuesday released its CoreLogic Home Price Index (HPITM) and HPI ForecastTM for November 2017, which shows US home prices are up both year over year and month over month. Home prices nationally increased year over year by +7 per cent from November 2016 to November 2017, and on a month-over-month basis home prices increased by +1 per cent in November 2017 compared with October 2017, according to the CoreLogic HPI.
Looking ahead, the CoreLogic HPI Forecast indicates that home prices will increase by +4.2 per cent on a year-over-year basis from November 2017 to November 2018, and on a month- over-month basis home prices are expected to decrease by -0.4 per cent from November 2017 to December 2017.
As well, S&P Dow Jones Indices reported that the Case-Shiller U.S. National Home Price Index Wednesday, which rose at a seasonally adjusted annual growth rate of +8.4 per cent in October, slightly slower than the +8.5 per cent increase in September. The September increase was revised down from its original estimate of -9 per cent.
Meanwhile, the Home Price Index, released by the Federal Housing Finance Agency (FHFA), rose at a seasonally adjusted annual rate of +6.5 per cent in October, following a +6.1 per cent increase in September.
Housing Opportunity Index
The Housing Opportunity Index (HOI) is defined as the share of homes sold that would have been affordable to a family earning the local median income taking into account home prices, income, and mortgage rates.
This graph shows the changes in home price annual growth rates and the Housing Opportunity Index (HOI) from 2000 to the present.