united states housing market and hardwoods · united states housing market and hardwoods “among...
TRANSCRIPT
United States Housing Market and Hardwoods
The Future of the Hardwood Lumber Industry
Wood Education Resource Center
Princeton, WV
November 3, 2016
Delton AldermanForest Products Marketing Unit
Forest Products Laboratory
Madison, WI
Northern Research Station-01
Princeton, WV
USDA Forest Service
304.431.2734
United States Housing Market and Hardwoods
Outline
• Where we’re at
• Demographics
• GDP projections
• Summary
United States Housing Market and Hardwoods
“Never make predictions, especially about the future.”
The late, great Casey Stengel
and
“It's tough to make predictions, especially about the future.”
The late, great Yogi Berra
United States Housing Market and Hardwoods
in thousands
Housing Units and Starts – 1880 to September 2016
Source: US Census & DOC-Construction
1946: US population: 141.4 mm 2016: US population: 324.1 mm
United States Housing Market and Hardwoods
September 2016 –Housing Stock & Age
644,434
3,349,216
19,541,438 18,890,642
18,363,586
20,924,027
14,547,538 14,182,503
6,865,918
17,484,363
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
Built 2014or later
Built 2010to 2013
Built 2000to 2009
Built 1990to 1999
Built 1980to 1989
Built 1970to 1979
Built 1960to 1969
Built 1950to 1959
Built 1940to 1949
Built 1939or earlier
Houses Percent
2.5%
0.5%
97% of houses built: 2009 and earlier
14.5% 14.0%
13.6% 15.5%
10.8% 10.5%
5.1%
13.0%
Source: http://factfinder.census.gov/; 10/31/16
Total: 132,741,033 units
United States Housing Market and Hardwoods
NAHB - Housing's USD Percentage Contribution to GDP
Source: https://www.nahb.org/en/research/housing-economics/housings-economic-impact/housings-contribution-to-gross-domestic-product-gdp.aspx; 10/31/16
6.1
3.5
14.1
12.2
19.3
15.7
0.0
5.0
10.0
15.0
20.0
25.0
1975 1980 1985 1990 1995 2000 2005 2011 2012 2013 2014 2015 2016Q1 2016Q2
Residential Fixed Investment Housing Services Residential Fixed Investment + Housing services
in percent
Q2 2016 US GDP: $18.6 trillion
Q2 2016: $652.8 billion
United States Housing Market and Hardwoods
Source: http://www.census.gov/construction/nrc/pdf/newresconst.pdf; 10/19/16
0
250
500
750
1,000
1,250
1,500
1,750
2,000
2,250
0
250
500
750
1,000
1,250
1,500
1,750
2,000
2,250
Total Starts SF Starts 2-4 MF Starts ≥5 MF Starts
Total starts 57-year average: 1,443 mm units
SF starts 57-year average: 1,025 mm units
MF starts 52-year average: 420 m units
SAAR = Seasonally adjusted annual rate; in thousands
September 2016 – Total Housing Starts
United States Housing Market and Hardwoods
Sources: http://www.census.gov/construction; 10/1916h; ttps://fred.stlouisfed.org; 10/31/16
New SF Housing Starts –Civilian Non-Institutional Population
0.0029
0.0000
0.0020
0.0040
0.0060
0.0080
0.0100
0.0120
0.0140
1959-2006 average: 0.0066
United States Housing Market and Hardwoods
September 2016 –Total Housing Permits
Source: http://www.census.gov/construction/nrc/pdf/newresconst.pdf; 10/19/16
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
Total Permits SF Permits 2-4 MF Permits ≥5 MF Permits
SAAR; in thousands
United States Housing Market and Hardwoods
Source: http://www.census.gov/construction/bps/pdf/2015statepiechart.pdf; 8/17/16
Total 1-unit 2-unit 3 - 4 units ≥5 units
1 South 572,779 378,203 5,864 4,625 184,087
2 West 277,235 160,707 3,702 4,357 108,469
3 Midwest 170,584 104,673 4,238 3,363 58,310
4 Northeast 161,984 52,415 3,178 2,750 103,641
United States 1,182,582 695,998 16,982 15,095 454,507
Building permits by region: 2015
United States Housing Market and Hardwoods
Source: http://www.census.gov/construction/bps/pdf/2015statepiechart.pdf; 8/17/16
United States Housing Market and Hardwoods
September 2016 –Total New SF Housing Sales
0
200
400
600
800
1,000
1,200
1,400
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Jan
2016
Feb
2016
Mar
2016
Apr
2016
May
2016
Jun
2016
Jul
2016
Aug
2016
Sep
2016
Total SF Sales
1963-2000 average: 633,895 units
1963-2015 average: 652,679 units
September 2016, 609,000
SAAR; in thousands
Source: http://www.census.gov/construction/nrs/xls/newressales.xls; 10/26/16
United States Housing Market and Hardwoods
92.4%
71.7%
7.6%
28.3%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
% of Sales: < $400m % of Sales: > $400
New SF Housing Sales Ratio of ≥$400m:≤$400m
Source: http://www.census.gov/construction/nrs/xls/newressales.xls; 10/26/16
United States Housing Market and Hardwoods
0.0023
0.000
0.001
0.002
0.003
0.004
0.005
0.006
0.007
1963-2006 average: 0.0039
Sources: http://www.census.gov/construction/nrs/xls/newressales.xls; 10/26/16https://fred.stlouisfed.org; 10/31/16
New SF Housing Sales:Civilian Non-Institutional Population
United States Housing Market and Hardwoods
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
6000
6500
7000
7500
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
6000
6500
7000
7500
U.S. NE MW S W
Existing House Sales
Source: NAR® http://www.realtor.org/news-releases/2016/10/first-time-buyers-steer-existing-home-sales-higher-in-september; 10/20/16
United States Housing Market and Hardwoods
1.74
1.76
1.78
1.80
1.82
1.84
1.86
1.88
115,000
120,000
125,000
130,000
135,000
140,000
U.S. Housing Inventory Ratio: Inventory to Noninstitutionalized Population
Housing Inventory: Civilian Non-Institutional Population
Source: NAR® http://www.realtor.org/news-releases/2016/10/first-time-buyers-steer-existing-home-sales-higher-in-september; &
https://fred.stlouisfed.org/; 10/20/16
United States Housing Market and Hardwoods
Sources: 1http://www.census.gov/housing/hvs/files/currenthvspress.pdf; 10/27/162 http://www.themreport.com/daily-dose/10-27-2016/homeownership-rate-claws-back-wait; 10/27/16
Homeownership Rate Claws Back Up, But Wait . . .
“On the optimist’s side, household formation – whether it’s from new renter or new owner
households – is good for both the housing market and the general economy, as some renters
eventually become owners and new households drive demand for home-related goods and services.
On the pessimist’s side, there are headwinds for those that want to own a home but can’t: prices and
rents have outpaced incomes, credit standards are higher, and a high share of young households are
still living with their parents. On the neutral side, the homeownership rate is not different from last
year or last quarter when seasonally adjusted.”2 – Ralph McLaughlin, Chief Economist, Trulia
63.5%
United States Housing Market and Hardwoods
36.5%
63.5%
Source: https://fred.stlouisfed.org/; 10/20/16
United States Housing Market and Hardwoods
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
52.0
53.0
54.0
55.0
56.0
57.0
58.0
59.0
60.0
61.0
62.0
Owner Occupied Housing Units (%) Renter Occupied Housing Units (%)
in percent
Percentage Change: Owner- vs. Renter-Occupied Housing
Since Q2 2000 – 59.6% of all household formations are/were renters.
Source: http://www.census.gov/housing/hvs/files/currenthvspress.pdf/; 10/31/16
United States Housing Market and Hardwoods
Demographics
United States Housing Market and Hardwoods
Sources: NAR® http://www.realtor.org/news-releases/2016/10/first-time-buyers-steer-existing-home-sales-higher-in-september; &
http://www.freddiemac.com/finance/report/20161012_why_are_experts_pessimistic.html; 10/12/16
United States Housing Market and Hardwoods
Source: http://www.freddiemac.com/finance/report/20161012_why_are_experts_pessimistic.html; 10/12/16
United States Housing Market and Hardwoods
Source: http://www.freddiemac.com/finance/report/20161012_why_are_experts_pessimistic.html; 10/12/16
United States Housing Market and Hardwoods
Source: http://www.freddiemac.com/finance/report/20161012_why_are_experts_pessimistic.html; 10/12/16
United States Housing Market and Hardwoods
Projected U.S. Households
Source: http://www.kansascityfed.org/publicat/econrev/pdf/13q4Rappaport.pdf
United States Housing Market and Hardwoods
Source: http://www.kansascityfed.org/publicat/econrev/pdf/13q4Rappaport.pdf
Occupied U.S. Single-Family Housing Units
United States Housing Market and Hardwoods
Source: http://www.kansascityfed.org/publicat/econrev/pdf/13q4Rappaport.pdf
Occupied U.S. Multi-Family Housing Units
United States Housing Market and Hardwoods
Source: http://www.kansascityfed.org/publicat/econrev/pdf/13q4Rappaport.pdf
Projected U.S. Single-Family Starts
United States Housing Market and Hardwoods
Projected U.S. Multi-Family Starts
Source: http://www.kansascityfed.org/publicat/econrev/pdf/13q4Rappaport.pdf
United States Housing Market and Hardwoods
“… a gradual rebound in single-
family housing starts, reaching the
logarithmic trend line by 2020:
± 1.1 million
close to the long-run historical
norm and within the range of
current housing expectations
but much lower than recent RPA
scenarios with similar or higher
population growth.”
Source: http://www.fpl.fs.fed.us/documnts/fplgtr/fpl_gtr219.pdf
Annual U.S. single-family housing starts, along with 2012 baseline
and 2010 RPA A1B and HFW scenario projections.
United States Housing Market and Hardwoods
“At the current pace, 52 million Americans, or one in seven residents, will be foreign-born by 2025… .
The pent-up demand for households for young adults will radically reshape land-use policy, according to Williams. The report predicts that a staggering 86 percent more households will form between 2015 and 2025 than the previous decade. That translates into 13.7 million new homes and apartments being built to meet the demand.” – Patrick Sisson, Senior Reporter, Curbed
“Demographic Strategies for Real Estate” – John Burns Real Estate Consulting for the Urban Land Institute
Source: http://www.curbed.com/2016/10/12/13255596/suburb-urban-planning-millennial-immigration-report-baby-boomer; 10/11/16
United States Housing Market and Hardwoods
“Millennial buyers are coming, and they’re coming relatively soon.” –Frank Nothaft, Chief Economist, CoreLogic
Source: http://www.housingwire.com/articles/38432-housings-new-normal-low-interest-rates-shifting-demand-coming-wave-
of-new-homebuyers; 11/2/13
United States Housing Market and Hardwoods
“Among the 117 million households in 2015, 68% of those are white households, while 13% are Hispanic, 12% are black, and 7% are Asian or others. For the next 10 years referenced, 2015-2025, the household formation will shift to minorities, as 40% of the share of household growth during that time period will be from Hispanics, while 24% will come from whites, and 18% will come from each blacks and Asians.” – Frank Nothaft, Chief Economist, CoreLogic
Source: http://www.housingwire.com/articles/38432-housings-new-normal-low-interest-rates-shifting-demand-coming-wave-
of-new-homebuyers; 11/2/13
United States Housing Market and Hardwoods
Sources: https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20160921.htm;https://www.ecb.europa.eu/pub/pdf/other/ecbstaffprojections201609.en.pdf;http://www.imf.org/external/pubs/ft/weo/2016/02/;http://www.worldbank.org/en/publication/global-economic-prospects
2015 2016 2017 2018 2019Longer
Run
United States
Board of Governors of the
Federal Reserve System1.8 2.0 2.0 1.8 1.8
IMF 2.6 1.6 2.2
World Bank 2.4 1.9 2.2 2.1
World Economies
European Central Bank 3.2 3.0 3.5 3.7
IMF 3.2 3.1 3.4
World Bank 2.4 2.4 2.8 3.0
Economic Projections
U.S Housing
• Aggregate market has improved
• Beginner or starter home starts/sales lag below normal
• Demographic composition of house ownership is going to change
• U.S. cues to watch: Job creation & salaries and housing affordability
• Global cues to watch:
• Will the Eurozone economies continue to improve?
• Geopolitical tensions
• Some large banks appear to be in trouble; and
• Global debt – companies, countries, and personal
Summary
United States Housing Market and Hardwoods
Questions?
Thank you
Delton AldermanForest Products Marketing Unit
Forest Products Laboratory
Madison, WI
Northern Research Station-01
Princeton, WV
USDA Forest Service
304.431.2734
U.S. Department of Agriculture Disclaimer
Disclaimer of Non-endorsement
Reference herein to any specific commercial products, process, or service by trade name, trademark, manufacturer, or otherwise,
does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government. The
views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government, and shall
not be used for advertising or product endorsement purposes.
Disclaimer of Liability
With respect to documents available from this server, neither the United States Government nor any of its employees, makes any
warranty, express or implied, including the warranties of merchantability and fitness for a particular purpose, or assumes any legal
liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process
disclosed, or represents that its use would not infringe privately owned rights.
Disclaimer for External Links
The appearance of external hyperlinks does not constitute endorsement by the U.S. Department of Agriculture of the linked web
sites, or the information, products or services contained therein. Unless otherwise specified, the Department does not exercise any
editorial control over the information you may find at these locations. All links are provided with the intent of meeting the mission
of the Department and the Forest Service web site. Please let us know about existing external links you believe are inappropriate
and about specific additional external links you believe ought to be included.
Nondiscrimination Notice
The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color,
national origin, age, disability, and where applicable, sex, marital status, familial status, parental status, religion, sexual
orientation, genetic information, political beliefs, reprisal, or because all or a part of an individual's income is derived from any
public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative
means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at
202.720.2600 (voice and TDD). To file a complaint of discrimination write to USDA, Director, Office of Civil Rights, 1400
Independence Avenue, S.W., Washington, D.C. 20250-9410 or call 800.795.3272 (voice) or 202.720.6382 (TDD). The USDA is
an equal opportunity provider and employer.