News Releases

Builders remain careful



Builders' confidence hesitated slightly in May as the NAHB/Wells Fargo Housing Market Index dropped two points to 54. The April-May average remains at the same level as the first quarter average suggesting nothing has changed significantly for the first five months of 2015. Builders continue to express concern that consumers remain tentative on their judgement of present and future economic conditions. Consumers demand prices below costs and are concerned about selling their existing home. First-time buyers still constitute about half their normal share of new home purchases.


On the more positive side, the component measuring future demand rose one point to 64, the highest in 2015 as builders do continue to see a better future. Low rates and pent up demand support the attitude. Inventories of new homes have risen since the bottom in mid-2012 and stand at their highest level since spring 2010. The index component measuring current sales dropped two point to 59 but remained well above the tipping point of 50.

5/20/2015 1:41:58 PM

FNC: Residential property values increased 4.6% year-over-year in March


Calculated Risk 

Posted: 5/11/2015 1:31:00 PM

In addition to Case-Shiller, and CoreLogic, I'm also watching the FNC, Zillow and several other house price indexes.

FNC released their March 2015 index data today.  FNC reported that their Residential Price Index? (RPI) indicates that U.S. residential property values increased 0.9% from February to March (Composite 100 index, not seasonally adjusted). 

The 10 city MSA increased 0.6% in March, and the 20-MSA and 30-MSA RPIs both increased by about 0.9% in March. These indexes are not seasonally adjusted (NSA), and are for non-distressed home sales (excluding foreclosure auction sales, REO sales, and short sales).

Notes: In addition to the composite indexes, FNC presents price indexes for 30 MSAs. FNC also provides seasonally adjusted data.

The year-over-year (YoY) change was slightly higher in March than in February, with the 100-MSA composite up 4.6% compared to March 2014. For FNC, the YoY increase had been slowing since peaking in March at 9.0%, but had held steady for the last few months.

The index is still down 18.6% from the peak in 2006 (not inflation adjusted).

Click on graph for larger image.

This graph shows the year-over-year change based on the FNC index (four composites) through March 2015. The FNC indexes are hedonic price indexes using a blend of sold homes and real-time appraisals.

Most of the other indexes are also showing the year-over-year change mostly steady at around 5% for the last several months.

Note: The March Case-Shiller index will be released on Tuesday, May 26th.Web Bug from http:


5/11/2015 12:22:38 PM

Sluggish housing starts may signal fewer home sales

Los Angeles Times


Home builders are taking it slow this spring, according to new figures on housing construction.
Permits for new construction fell 5.7% in March compared to last month, the Commerce Department reported. Housing starts -- when construction actually begins -- climbed 2% off last month's sharp decline, but came in well below analyst expectations.
The often-volatile numbers were dragged down by a decline in multifamily construction, a sign that the apartment building boom of the last couple of years may be cooling off. Starts for buildings with five or more units fell 7.1% from February, while permits, a sign of construction to come, were down 16%.

4/17/2015 6:13:42 PM

Califormia's housing costs hurt economy, increase poverty, report finds


Wall Street Journal


California’s high housing costs are crimping economic productivity, increasing poverty rates, lowering homeownership, increasing crowding and lengthening commute times, a new state report says.
California has some of the most expensive housing markets in the U.S.—a result of the slow pace of development in high-demand coastal cities. The average home price in California, $440,000, is about 2½ times the national average, while California’s average monthly rent, $1,240, is about 50% higher than the average U.S. rent, according to a report released Tuesday by the state legislature’s independent analyst.


3/20/2015 1:05:41 PM

2015 Random Lengths Big Book, Yearbook available

The latest editions of Big Book and Yearbook are now available. The Big Book is the largest directory of the North American softwood industry. The Yearbook is the most in depth source of historical market information. Both are being published by Random Lengths Publications, Inc. For more information on both books, as well as purchasing information, Click Here

2/19/2015 5:52:39 PM

Housing market starts 2015 on several weak notes


Housing Wire


Despite optimism in most forecasts, it looks like 2015 is off to a faltering start for the housing industry.
January was a bad month for housing starts, completions and permits, reflecting perhaps the reason for homebuilder confidence to likewise be down for February.
Single-family authorizations in January were at a rate of 654,000; this is 3.1% below the revised December figure of 675,000.
Single-family housing starts in January were at a rate of 678,000; this is 6.7% below the revised December figure of 727,000.


2/19/2015 12:32:46 PM

Strong U.S. housing data offsets sharp fall in factory orders



Economy Watch


A new report by CoreLogic shows that home prices rose 5% on a year-over-year basis in December 2014, with only three states—Maryland, Vermont, and Connecticut—seeing price declines. At the same time, Colorado, Texas, and New York were seeing the highest price gains.
While the gains are still strong, CoreLogic noted a moderation of price growth in its report, which it identifies as a positive sign of a more sustainable housing market, with less speculative construction and flipping.
In most states, price growth moderated on a year-over-year basis in 2014, with the hardest hit states during the global financial crisis seeing a sharp slowdown in price growth.


2/5/2015 1:33:01 PM

US economy grows incredible 5%


CNN Money


Evidence is mounting that the U.S. economy is kicking into high gear.

Gross domestic product soared 5% on an annual basis in the third quarter, the government said on Tuesday.

To put that in perspective, it's the strongest quarter of growth since 2003.


12/29/2014 12:52:33 PM

Happy Holidays from MMPA

The MMPA wishes you a very Merry Christmas and Happy New Year! The MMPA office will be closed for the holidays as follows:

Christmas  -  December 25 - 26

New Year's Day  -  January 1

We look forward to seeing you in 2015 during MMPA's 52nd Annual Business Meeting at The Lodge as Sonoma from April 19-23.

12/23/2014 1:02:59 PM

Sierra Pacific President elected AWC's 2015 chairman




LEESBURG, VA. - The American Wood Council (AWC) today announced the election of Sierra Pacific President George Emmerson as the new AWC chairman for a one-year term.
Tom Corrick, executive vice president of Boise Cascade Wood Products, was elected the First Vice-Chairman and Andrew Miller, CEO of Stimson Lumber, was elected as the Second Vice-Chairman. Fritz Mason, vice president and general manager of lumber for Georgia-Pacific, will serve as the immediate past chairman.
President and CEO of Anthony Forest Products Aubra Anthony was re-elected to serve another two-year term.
Roseburg Forest Products President and CEO Allyn Ford was confirmed as a new member of the AWC board.
“Fritz has been a tireless leader for the last two years. His commitment to the organization has been unsurpassed and he’s been the central force in implementing AWC’s talent management plan, which has improved our overall operational performance,” said AWC President & CEO Robert Glowinski. “Moving to next year, I look forward to working with George as AWC continues to grow to serve wood products manufacturers.”
The full AWC board of directors includes:


  • Chairman George Emmerson, Sierra Pacific;
  • First Vice-Chairman Tom Corrick, Boise Cascade;
  • Second Vice-Chairman Andrew Miller, Stimson Lumber;
  • Immediate Past Chairman Fritz Mason, Georgia-Pacific;
  • and, Aubra Anthony, Anthony Forest Products; Marc Brinkmeyer, Idaho Forest Group; Mike Dawson, Norbord, Inc.; Ray Dillon, Deltic Timber; Allyn Ford, Roseburg Forest Products; Michael Giroux, Canadian Wood Council; Brian Luoma, Louisiana Pacific; Joe Patton, Westervelt; Jim Rabe, Masonite; Cathy Slater, Weyerhaeuser Company; and Danny White, T.R. Miller Mill Company. 


For more information about AWC, visit or follow the association on Twitter at @woodcouncil.


12/8/2014 12:21:51 PM

SierraPine and Arauco Announce Withdrawal of HSR Filing Related to Asset Purchase Agreement

October 1, 2014


Roseville, CA — SierraPine and Arauco North America announce today the withdrawal of their Hart-Scott-Rodino Antitrust Improvement Act filing submitted in relation to the previously announced Asset Purchase Agreement dated January 13, 2014. Per the agreement, Arauco would have acquired certain SierraPine assets including the Medford, OR Springfield, OR, and Martell, CA composite panel plants. The companies determined that the necessary regulatory approvals, including clearance from the Antitrust Division of the Department of Justice, cannot be obtained through any route other than protracted and costly litigation.

"SierraPine remains well positioned with the forecasted growth in housing starts, repair and remodeling, and strong distribution channels. We are an industry leader, have a solid balance sheet, and will continue to meet customer needs and pursue opportunities to improve our business," said SierraPine Jeff Johnson.

The partners of SierraPine will continue to focus their engergies to support the SierraPine team in producing quality products for their customers. 

10/1/2014 12:23:28 PM

US housing recovery appears to be back on track




A fourth straight monthly increase in sales of existing homes provided the latest evidence Thursday that the U.S. housing market is rebounding from a weak start to the year.

Housing has been a drag on an otherwise strengthening economy, in part because a harsh winter delayed many sales. But Americans are stepping up purchases as more homes have been put up for sale. And low mortgage rates and moderating price gains have made homes more affordable.

"The momentum is in the right direction," said Andrew Labelle, an economist at TD Bank who noted that the past four months have marked the fastest four-month sales gain since 2011. "Sustained jobs gains, as well as the fall in mortgage rates since the beginning of the year, appear to have unleashed at least some pent-up demand."

Sales of existing homes rose 2.4 percent in July to a seasonally adjusted annual rate of 5.15 million, the National Association of Realtors said Thursday. That was the highest annual rate since September of last year.

The increase follows other encouraging signs that the housing market is improving. The pace of home construction starts surged 15.7 percent in July to a seasonally adjusted annual rate of 1.1 million homes, the government said this week. Applications for building permits, a gauge of future activity, also strengthened last month.

And a survey of homebuilders released Monday showed that they were more confident about future sales.

The encouraging readings contrast with reports earlier this year, when weak sales and limited building led economists to characterize housing as a faltering piece of the economic recovery. Federal Reserve Chair Janet Yellen and Vice Chairman Stanley Fischer had pointed to housing as an economic weak spot.

Economists noted that housing still hasn't fully recovered from its slowdown earlier this year. The annual sales pace remains 4.3 percent below last July's rate. And construction has merely returned to its pace in October; it has yet to exceed it.

Yet economists say they're encouraged by signs that the latest sales gains are sustainable.

Stephanie Karol, an economist at IHS Global Insight, said a "virtuous cycle" is emerging: More homeowners are listing their properties for sale. A greater supply of homes then encourages more potential buyers to take the plunge. And that, in turn, helps sustain modest price gains, which lead more people to sell.

"This is exactly the sort of pattern we want to see," Karol said.

The number of homes for sale rose 3.5 percent in July from June to 2.37 million, the most in nearly two years.

Affordability is improving. The median price slipped a bit in July from June to $222,900, the Realtors said. Though that was still 4.9 percent more than a year ago, year-over-year price gains have slowed.

And the average rate for a 30-year mortgage fell to 4.1 percent this week, the lowest level this year, according to mortgage giant Freddie Mac. At the start of the year, the average rate was 4.53 percent.

A study released Thursday by data provider Zillow found that home buyers paid just 15.3 percent of their incomes on the mortgage for a typical home at the end of the April-June quarter. That's much lower than the 22.1 percent share during the housing bubble that ended in 2006.

The Realtors report also showed that healthy sales make up a rising share of purchases. Fewer home sales stem from foreclosures or involve homes for which the seller owed more on their mortgage than the home was worth.

Those "distressed" sales made up just 9 percent of sales in July — the lowest proportion since the Realtors began tracking the figure in October 2008. Distressed sales, which tend to drag down neighborhood prices, had made up 36 percent of sales in 2009.

Many distressed sales were made to investors, including private equity firms. They bought large numbers of homes and drove up overall sales in 2011 and 2012.

Ron Peltier, CEO of HomeServices America, a real estate brokerage affiliated with Berkshire Hathaway, noted that those sales weren't sustainable.

"We were seeing sales in clumps," he said. "Now we're seeing sales the good old-fashioned way: One at a time."

First-time homebuyers made up 29 percent of sales in July, up slightly from June and the second straight gain. Still, that's well below the typical figure of 40 percent. First-time buyers are critical to a housing recovery, in part because they enable homeowners seeking to buy larger homes to sell.

First-time buyers are likely benefiting from strong job gains. Hiring since February has reached its healthiest pace since 2006. But first-timers also face higher credit standards and down-payment requirements, making it harder for many to qualify for mortgages.


Contact Chris Rugaber on Twitter at


8/21/2014 6:07:24 PM

U.S. moulding consumption poised for a bull market rally



Improving U.S. Moulding Market Spurring on a Rise in Imports

Vancouver, BC - August 12, 2014 

International WOOD MARKETS Group announces the release of the 9th Edition of its acclaimed

U.S Clear Pine Lumber & Moulding Market Outlook: 2014- 2018. Consolidation of manufacturing both domestically and offshore continues to set the stage for interesting market dynamics as U.S. demand moves into high gear now anticipated for later half of 2014 and into 2015.


After enduring four years of declining demand of epic proportions, underlying demand is beginning to re-emerge. "Although not the strong start the industry was anticipating for 2014, the results in the second half of this year should build on the demand gains made in 2013", comments co-author Russell Taylor.


After six months of research that included discussions with most of the major clear pine lumber and moulding industry players in North America and the Southern Hemisphere, and following extensive modelling and forecasting work, the lead author of the report Mr. Butzelaar's overriding conclusion is that a wave of demand is coming and so are higher prices. WOOD MARKETS is projecting U.S. housing starts to surpass 1 million starts in 2014 followed by an additional 125,000 starts in 2015. As the labour market and income levels improves, housing demand will see accelerating growth as will residential repair and remodelling (R&R) - the two main drivers of moulding demand. However, due to mill closures, supply chain consolidation, and limited supplies of domestic clear pine fiber, traditional moulding supply in North America is forecast to struggle to keep up with demand.  


Some of the critical findings of the report include:

  • Clear pine material supply within the U.S. is forecast to expand some 20% over the next five years, yet the forecast volumes are still less than a third of what they were in the early 1990's - pre spotted owl era.  "Although domestic moulding and millwork industry is far smaller less than it once was, to meet the forecast domestic demand for raw material, the industry will have to become ever more dependent on imported clear pine material, primarily from regions with plantation pine forests" states Mr. Butzelaar.
  • U.S. moulding consumption increased by 12% in 2013 on gains attributed to housing starts that rose by 143,000 units to 925,000 units and a more moderate uptick in repair and R&R. Based on a projected slower rate of growth in 2014 housing activity, WOOD MARKETS is projecting a 4% growth in moulding consumption for this year followed by more robust and accelerating growth in the mid to later years of its 5 year forecast as the U.S. economic recovery gains momentum.
  • Imports of softwood mouldings continue to gain a larger share of the moulding market climbing to over 40% of total consumption in 2013 with further increases projected for 2014. As Mr. Butzelaar notes, "the re-emergence of China as one of the top four importing countries of softwood moulding products is creating a lot of interest around whether this is a temporary blip or the start of something much bigger." The report highlights what products the Chinese are bringing in, what species they are consuming, from where they are getting their raw material inputs, and what is the growth potential for Chinese moulding imports over the next five years.
  • The market share for traditional solid lineal pine mouldings is losing ground to alternatives mouldings made from hardwoods, plastic, as well as paint-grade mouldings made from finger-joint or MDF. Paint-grade mouldings are projected to account for almost 85% of moulding consumption in 2014 with this number to grow in future years.
  • As Mr. Butzelaar explains, "given our outlook for rising moulding demand combined with the heavy concentration of supply among the top domestic and offshore producers, we anticipate that moulding producers will continue to manage supply leading to record higher prices in the next few years."

Based on WOOD MARKETS in depth knowledge of the industry and the drivers impacting its future, the U.S. Clear Pine Lumber & Moulding Market Outlook report remains the preeminent source for information on what lies ahead for producers and distributors. The key output of the report is the dramatic change in prices that are expected - they are going to soar at times from strong demand and from a hollowed out supply chain that won't be able to respond fast enough when surges occur.


This summary provides just some of the critical strategic topics addressed in the just released U.S Clear Pine Lumber & Moulding Market Outlook: 2014- 2018. This 9th Edition report strives to assist senior management to steer the course and capitalize on the coming market opportunities by providing insight, supporting data, and price forecasts that are not available anywhere else. This report predicts where the market is headed for mouldings and domestic and offshore raw material inputs over the next five years.


To review a complete table of contents as well as subscription information, please visit our webpage




8/18/2014 5:24:00 PM

Three reasons why the US housing market won't be back to normal anytime soon






By Stan Humphries June 30, 2014

Stan Humphries is the chief economist at Zillow, the online real-estate marketplace.


Recent housing data are noisy, and often conflicting—are we back to normal, or in another bubble? The truth is, compared to what we’ve been through, we’re much better off.
Nationally, home values were up 5.4% year-over-year at the end of May, and are expected to rise another 2.9% over the next year. But even as prices rise, home values largely remain below their pre-crash peaks. Currently, the median home in the US is valued at $172,300, down more than 12% from peak. Interest rates on a 30-year, fixed-rate mortgage, while up from the record lows of a year ago, are still incredibly low at about 4%.
And yet we aren’t back to normal, not by a long shot.



7/7/2014 3:01:59 PM

American Wood Council and Canadian Wood Council announce medium density fiberboard and particleboard EPDs




LEESBURG, Va. – The American Wood Council (AWC) and Canadian Wood Council (CWC) have announced the release of new environmental product declarations (EPD) for medium density fiberboard (MDF) and particleboard, bringing the available EPDs for North American wood products to nine.


All of the EPDs and accompanying transparency briefs are available free on the AWC website.


EPDs are standardized tools that provide information about the environmental footprint of the products they cover. The North American wood products industry has taken its EPDs one step further by obtaining third-party verification from UL Environment, a business unit of Underwriters Laboratories and an independent certifier of products and their sustainable attributes.


"We are pleased to partner with the Canadian Wood Council to make these EPDs available. With the growing interest by the design community to select products for which EPDs are available, we are confident the MDF and particleboard EPDs will be popular," said AWC President and CEO Robert Glowinski.


“The composite panel industry is based on the recovery of forestry residuals to fabricate high-value construction and consumer products, and our EPDs yet again showcase the unmatched environmental performance of renewable wood,” said Composite Panel Association (CPA) President Tom Julia. “CPA members are proud to have supported the development of the Life Cycle Inventory and Life Cycle Assessment reports upon which these EPDs are based.  Specifiers, designers and fabricators now have an important new tool to objectively compare wood products with those made of plastic, metal or other materials.”


Based on international standards (ISO 14025 and ISO 21930), EPDs have worldwide applicability and include information about product environmental impacts such as use of resources, global warming potential, emissions to air, soil and water, and waste generation.


For more information and to download currently available EPDs and transparency briefs for wood products, visit


1/30/2014 4:14:05 PM

The aging housing stock




NAHB Eye on Housing


The American housing stock continues to age; a trend that represents an opportunity for remodelers and over the long term may signal a future increased demand for new home construction.
According to the latest data from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of an owner-occupied home in the United States was 35 years old as of the 2011 survey. The median age reported in the 1985 AHS was only 23 years old.


1/23/2014 1:16:09 PM

Flakeboard and SierraPine announce asset purchase

January 14, 2014

Markham, Canada — Today, Flakeboard America Limited, a US subsidiary of Arauco, has agreed to buy the western US panel assets of SierraPine, a California limited partnership, consisting of two particleboard plants located in California and Oregon, and an MDF plant in Oregon.

Upon completion of the acquisition, the Arauco plants in North Amercia will have an installed panel capacity of 2 billion feet sq. ft. (3/4" basis) or 3.5 million cubic meters, adding to the capacity of the composite panel plants that Arauco holds in Brazil, Argentina and Chile.

According to Flakeboard President Kelly Shotbolt, "We are extremely excited about our proposed purchase of SierraPine, and specifically the benefits that addtional western facilities add in terms of product offering, manufacutring locations, and employee experience. Combined with existing Flakeboard mills, the transaction will bring new opportunities for our customers, our combined employees, and the communities in which we operate."

The two companies are targeting a closing during the first quarter of 2014. The transaction is subject to customary conditions, including regulatory approvals.



1/14/2014 11:47:20 AM

House prices rise again, but the pace could slow

New York Times

It was a great year for the stock market. And it was also a pretty good year for many people’s biggest investment: their homes.
In 2013’s last glimpse at the housing market, figures released on Tuesday showed that home prices in major metro areas kept rising in October. Year-over-year, prices were up 13.6 percent, the biggest gain in more than seven years.



1/3/2014 2:10:20 PM

New home sales, durable goods, Richmond Fed Mfg Survey and more


Calculated Risk

Posted: 23 Dec 2013 05:36 PM PST

China remains a risk, from the WSJ: China Cash Crunch Shows Central Bank's Difficulties

A cash crunch among China's banks intensified, highlighting the difficulties faced by the central bank in managing an increasingly stressed financial system.
The current squeeze is driven by several factors, analysts said. One is a little-noticed drop in China's year-end government spending. ... Banks are becoming more cautious and are hoarding more cash for future needs in case the cash squeeze worsens. Some of them are also boosting provisions for potential loan defaults.
"To prevent systemic risks, and reduce the impact on liquidity, the supervision of the interbank market will continue to be strengthened," analysts at Bank of China Ltd. said in a report Monday, adding that interbank lending was "accentuating hidden dangers" in the financial system. The rise in rates came despite the Chinese central bank's announcement late Friday that it had injected more than 300 billion yuan into the financial system over a three-day period following the increase in interbank rates last week.

Tuesday: All US markets will close early

• At 7:00 AM ET, Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

• At 8:30 AM, Durable Goods Orders for November from the Census Bureau. The consensus is for a 1.5% increase in durable goods orders.

• At 9:00 AM, the FHFA House Price Index for October 2013. This was original a GSE only repeat sales, however there is also an expanded index. The consensus is for a 0.4% increase.

• At 10:00 AM, New Home Sales for November from the Census Bureau. The consensus is for an increase in sales to 450 thousand Seasonally Adjusted Annual Rate (SAAR) in November from 444 thousand in October.

• Also at 10:00 AM, Richmond Fed Survey of Manufacturing Activity for December. The consensus is a reading of 10, down from 13 in November (above zero is expansion).


12/26/2013 4:14:09 PM

Comments: Housing Starts and Mortgage Index


By Bill McBride, Calculated Risk

Posted: 18 Dec 2013 08:46 AM PST

A few comments:

The MBA purchase index is down about 10% year-over-year, and this has led to some articles like this from CNBC: Mortgage applications plummet amid uncertainty

Purchase applications though are down 10 percent, mirroring a slowdown in home sales in many previously hot markets.

The slowdown in existing home sales is mostly due to less investor buying and fewer distressed sales (fewer cash buyers). Declining distressed sales, but increasing conventional sales - even if total sales decline - is a good sign!

And an important note on the Purchase Index: the index is probably understating purchase activity due to a change in the mix of lenders. There are more small lenders that focus on purchase loans (and sell to Fannie and Freddie), and these lenders are underrepresented in the purchase index. I discussed this two weeks ago with the MBA's Mike Fratantoni, and he told me:

[I]n the last couple of years ... independent mortgage bankers have accounted for a fast growing share of the purchase market ... We have actively recruited independents and smaller banks to get better coverage of the purchase market. ... It is likely that many of the lenders not in the survey have a higher purchase share and lower refi share.

The MBA index is useful, but housing starts and new home sales provide better information.

• Overall the housing starts report was encouraging with total starts at a 1.09 million rate on a seasonally adjusted annual rate basis (SAAR) in November. This was well above the consensus forecast of 952 thousand SAAR.  

• And the increase wasn't just in the volatile multi-family sector; single family starts were at the highest level since early 2008.

Also housing starts are up significantly from the same period last year. Over the first eleven months of 2013, total starts are up over 19% compared to the same period in 2012.  The increases in starts slowed in the 2nd half of 2013, but this has been a solid year for residential investment growth.

• Even with another significant year-over-year increase, housing starts are still very low. Starts averaged 1.5 million per year from 1959 through 2000, and demographics and household formation suggests starts will return to close to that level over the next few years. This suggests significantly more growth in housing starts over the next few years.

Here is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment).

These graphs use a 12 month rolling total for NSA starts and completions.

Multifamily Starts and completions
Click on graph for larger image.

The blue line is for multifamily starts and the red line is for multifamily completions.

The rolling 12 month total for starts (blue line) has been increasing steadily, and completions (red line) are lagging behind. It is interesting that completions have lagged so far behind starts, and this suggests completions will increase significantly in 2014 (completions lag starts by about 12 months).

However the level of multi-family starts over the last 12 months - close to the level in late '90s and early 00's - suggests that future growth in starts will mostly come from single family starts.

Single family Starts and completionsThe second graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion - so the lines are much closer. The blue line is for single family starts and the red line is for single family completions.

Starts are moving up and completions are following.  Usually single family starts bounce back quickly after a recession, but not this time because of the large overhang of existing housing units. 

Note the low level of single family starts and completions.  The "wide bottom" was what I was forecasting several years ago, and now I expect several years of increasing single family starts and completions.



To view the entire Calculated Risk Finance & Economics website:


12/18/2013 12:02:41 PM

Are we already back in a housing bubble?

Business Week

By Karen Weise

Home prices keep rising—and not just in some markets. For the first time since 2005, each of the country’s 50 most populous cities are seeing higher prices. While that could be a good sign for the economy, the market is showing signs of overheating and the current pace is not sustainable, according to a new report by Fitch Ratings.

The report regards home prices across the country as overvalued by about 17 percent. Conditions are worrisome in several markets, most of them in coastal California, where homes are more than 20 percent overvalued. San Francisco and San Jose will set new home price records in the next six months, according to Fitch. While Bay Area tech companies are booming, the region’s economy isn’t growing nearly as fast as the “unprecedented” home price gains, making the market nearly 30 percent overvalued. Current conditions in the heart of Silicon Valley are akin to “the environment in 2003,” the report notes ominously, “three years into the formation of the previous home price bubble.”

Prices are being driven by investor interest in flipping homes, another familiar phenomenon. Fitch estimates that half of all homes in the Bay Area are now bought with cash, Fitch says, and that’s “often indicative of investor behavior.”

The danger is that overvalued markets could stall if interest rates rise as the economy rebounds: “When an expectation of rising rates is coupled with rising price levels,” the report notes, “there could be increased pressure on the housing market that could reverse recent gains.” That echoes an argument that