The 2019 Survey of Construction (SOC) from the Census Bureau shows that the average completion time of a single-family house is around 8.1 months, which usually includes a little over a month from authorization to start and another 7 months to finish the construction. The average time to build a single-family home has been on an upward trend since 2014 when it took around 7 months. The time from authorization to completion varies across the nation and depends on the geographic location, and whether the house is built for sale or custom-built.

Among all single-family houses completed in 2019, houses built for sale took the shortest amount of time, 7.0 months from obtaining building permits to completion, while houses built by owners (custom builds) required the longest time, 13.5 months. Homes built by hired contractors normally needed around 9.8 months, and homes built-for-rent took about 12 months from authorization to completion.

Single-family homes built by contractors on owners’ land began construction within the same month after obtaining building authorizations. Custom homes built for sale and built by owners serving as general contractors had one month or a little over one-month lag between obtaining permits and the start of construction. However, single-family homes built for rent took the longest time, almost two months, from authorization to completion in 2019.

The average time from authorization to completion also varies across divisions. The division with the longest duration was the Middle Atlantic (12.3 months), followed by New England (11.9 months), the Pacific (9.8 months), the East South Central (9.0 months), the East North Central (8.7 months) , and West North Central (8.2 months) in 2019. These six divisions had average time from permit to completion exceeding the nation’s average (8.0 months). The shortest period, 6.9 months, is registered in the South Atlantic division. The average waiting period from permit to construction start varies from the shortest time of 20 days in the Mountain and the East South Central division to the longest one of 43 days in Pacific.

The SOC also collects sale information for houses built for sale, including a sale date when buyers sign sale contracts or make a deposit. Looking at single-family homes built for sale and completed in 2019, 27.7% were sold before construction started, 32.7% sold while under construction, 13.9% sold during the month of completion, and 20.5 % sold after completion. The share of completed houses remaining unsold was 5.2%.

Nonfarm payroll employment increased in 49 states in August compared to the previous month. The largest increase came from New York, which added 153,300 jobs during this time. According to the Bureau of Labor Statistics, nationwide total nonfarm payroll employment increased by 1.4 million over the month of August, following an increase of 1.7 million jobs in July.

Month-over-month (MoM), total nonfarm employment was robust across all regions gaining a total of 1.4 million or an increase of 1.0% from July to August. During this time, total nonfarm employment increased by 1.5% in the Northeast, 1.0% in the Midwest, 0.9% in the South, and by 0.8% in the West.

Year-over-year (YoY), total nonfarm employment fell by 10.2 million jobs on a seasonally adjusted basis (SA), or -6.8% from August 2019 to August 2020. During this time, total nonfarm employment decreased across all the regions.  Northeast declined by 10.1%, Western region by 7.5%, the Midwest by 6.8%, and the South by 5.2%. In July, the year-over-year job losses were 11.4 million on a seasonally adjusted basis.

On a month-over-month basis, the employment data is strong with New York adding 153,300 jobs, followed by Texas (+106,800) and California (+101,900). The other 46 states added 1.04 million jobs during this time. District of Columbia and Hawaii lost a total of 2,500 jobs. In percentage terms, New York, Virginia, and New Jersey increased by 1.8% while District of Columbia and Hawaii reported a decline of 0.2% between July and August.

Year-over-year, ending in August, all the states and the District of Columbia decreased in employment totaling 10.2 million jobs lost across the country. The range of job losses span 5,500 jobs lost in Idaho to 1.6 million job lost in California. In percentage terms, Hawaii reported the steepest decline at 16.1% while Idaho lost 0.7% of nonfarm payroll compared to a year ago.

In the construction sector specifically, which includes both residential and non-residential construction, across the 48 states which reported construction sector jobs data, 30 states reported an increase in August compared to July, while 18 states lost construction sector jobs. California added 6,700 construction jobs while Nevada lost 2,600 construction sector jobs during this time. Overall, the construction industry added 16,000 jobs in August compared to the previous month.  In percentage terms, New Mexico increased by 6.7% while West Virginia reported a decline of 3.3% between July and August.

Year-over-year, the U.S lost 294,000 construction sector jobs which is a 3.9% decrease compared to August 2019. Utah added 8,800 jobs, which was the largest gains of any state while California lost 52,000 jobs, which was the largest decline of any state. In percentage terms, South Dakota had the highest annual growth rate in construction sector by 10.9%. Over this period, Vermont reported the largest decline at 29.6%.

For the week ending September 11, 2020, the Mortgage Banker’s Association’s (MBA) Weekly Application Survey indicated a decrease in its Market Composite Index, a measure of both purchasing and refinancing, of 2.5% from one week earlier on a seasonally adjusted basis. The Purchasing and Refinancing Indexes decreased by 0.5% and 3.7%, respectively. The survey’s tracked 30-year fixed-rate mortgage rate remained unchanged from the previous week, still hovering one basis point above the record low of 3.06% reached at the beginning of August.

Despite the weekly decline in application activity, the unadjusted Purchasing and Refinancing indexes were higher than what they were the same week one year ago, at 6% and 30%, respectively. The year-over-year gain for purchasing significantly dropped from the previous week, as shown in the figure below.

The MBA stated in its weekly report that the average loan size was pushed up to a record high of $370,200 in the latest week, as well. The refinance share of mortgage activity decreased to 62.8 percent of total applications from 63.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 2.3 percent of total applications. By dollar volume, the share of ARMs increased, as well, to 6.5% of all applications.

We know lumber prices are up more than 170% since mid-April as of mid-September. As housing has rebounded, the lack of lumber has materialized as a key weak spot for housing supply. With that in mind, what’s the market share of alternative framing methods?

For better or worse, wood framing remains the dominant construction method for single-family homes in the U.S., according to NAHB analysis of Census Bureau data. For 2019 completions, 90% of new homes were wood-framed. Another 10% were concrete-framed homes, and less than half a percent were steel-framed.

On a count basis, there were 814,000 wood-framed homes completed in 2019. This was an 8% gain over the 2018 total. As noted above, steel-framed homes are relatively uncommon, with a total of just 3,000 housing completions in 2019, which was the same as the 2018 tally.

However, concrete-framed homes experienced accelerated growth. The total was up 46%, increasing from 59,000 completions in 2018 to 86,000 in 2019. The gains over the last 10 years are more striking. From 2009 to 2019, the concrete-framed total increased by 258% and the market share doubled from 5% to 10%.

Some of these gains came from a shift in geography. Concrete-framed homes are more common in the South. In fact, such homes made up 17% of all homes completed in the South. But the shift to home building in the South was not the only factor, as the share of all homes in the U.S. built in this region increased from 50% in 2009 to just 55% in 2019. The national gain for concrete-framed housing was also driven by share gains within the South itself, rising from 8% in 2009 to 17% mentioned above.

Hurricane-related building codes are thus part of the explanation, but the run-up in lumber prices in 2018 may have also moved the needle. And given the historic acceleration of lumber prices in 2020, more builders will be investigating alternative framing methods, including steel and concrete.