The December BuildFax Housing Health Report found that the year-over-year rate of single-family housing authorizations, maintenance and remodeling volumes have all decreased. This is the second consecutive month new and existing housing activity has declined. The report, which leverages U.S. property condition and history data to deliver macroeconomic as well as more granular trends, also revealed that while a recession isn’t yet imminent, the probability of one occurring in the next year will increase if present conditions persist.
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The BuildFax Housing Health Report analyzed key economic indicators, and found that single-family housing authorizations have the highest correlation to economic downturns. (Photo: Business Wire)
Housing Supply by Volume
- Single-family housing authorizations decreased by 3.76 percent year over year.
- Existing housing maintenance volume decreased by 10.71 percent year over year.
- Existing housing remodel volume decreased by 15.64 percent year over year.
“The potential for an economic downturn has been highly discussed over the past few months as more signals of a recession come into alignment,” said BuildFax CEO Holly Tachovsky. “We’ve been tracking single-family housing authorizations daily for a more granular understanding of whether a decline might be on the horizon. We’ve also been monitoring interest rate activity, changes to home prices and housing supply growth to further gauge any impending shift in the economy. While this is only the second consecutive month of declining indicators, this shift is in stark contrast to the white-hot housing market that the U.S. has experienced since 2013.”
The report dives deeper into past recessions, analyzing a number of key economic indicators and their correlation to predicting recessions between 1961 and 2018. Single-family housing authorizations have the highest recession correlation of the economic factors tested.
For a look at more trends affecting the U.S. housing market, access the full report here. To learn more about BuildFax, visit www.buildfax.com.
ABOUT BUILDFAX
BuildFax, headquartered in Austin, Texas, is trusted by the largest insurance and financial institutions in the world to deliver business-critical property condition and history data. With the only database of its kind encompassing more than 23 billion data points on commercial and residential structures, BuildFax delivers detailed data on remodeling, solar installations, new construction, roof age, major systems, maintenance history and more. To learn more about BuildFax, visit www.buildfax.com.
METHODOLOGY: BuildFax conducted this study by examining properties in the U.S. between the years 2013 and 2018. Data only includes properties located within permitting authorities with 100 percent coverage during the above time frame. All percentage increase and decrease statistics leverage the same data set across time. Due to historical revisions made by permitting authorities, the data is subject to change. Estimates are as of January 8, 2019. The BuildFax simulation referenced in this release and within the report considered 14 features when evaluating the probability of a recession. See report for more details.
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