As revealed in a previous post, 56% of buyers who are actively engaged in the process of finding a home have spent upwards of 3 months searching unsuccessfully. What is holding them back? 40% say they can’t find a home at a price they can afford and 32% each say they can’t find a home with the features they want or in a neighborhood they want.

The final question in NAHB’s Housing Trends Report asks these veteran house hunters, who have been actively searching for a home for at least three months, about their future plans if the right home remains elusive in the months ahead:

• 48% will continue looking for the ‘right’ home in the same preferred location,
• 34% will expand the search area,
• 23% is willing to accept a smaller/older home,
• 19% might buy a more expensive home

This quarter marks the first time since the creation of the series that the share who will continue looking for the ‘right’ home in the same location falls below the 50% mark, dropping from 60% in the first quarter of 2018 and 56% in the first quarter of 2019, to the latest 48%. Most home buyers, however, remain committed to homeownership, as only 16% of those searching for a home for 3+ months say they will give up trying until next year or later.

* The Housing Trends Report is a research product created by the NAHB Economics team with the goal of measuring prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets. The HTR is produced quarterly to track changes in buyers’ perceptions over time. All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult. Results are not seasonally adjusted due to the short time horizon of the series and therefore only year-over-year comparisons are statistically valid. A description of the poll’s methodology and sample characteristics can be found here. This is the fifth and final in a series of posts highlighting results for the first quarter of 2020. See previous posts on plans to buy, housing availability, housing affordability, and active buyers.

The Federal Reserve’s latest G.19 Consumer Credit Report shows rising trends in consumer credit, excluding loans secured by real estate, through March 2020.

In March, consumer credit decreased at a seasonally adjusted annual rate of 3.4% from the previous month, with revolving debt¹ decreasing by 30.9% and nonrevolving debt² increasing by 6.2 percent. Consumer credit totaled $4.2 trillion on a seasonally adjusted basis, with $1.1 trillion in revolving debt and $3.1 trillion in nonrevolving debt. This is a decrease of $12 billion from the previous month, with revolving debt decreasing by $28.2 billion and non-revolving credit offsetting the decrease by $16.1 billion. The first quarter gains, as a result, were minimal, with total consumer credit increasing by 1.8%.

As can be seen from the above figure, the last time such dramatic monthly decreases were seen was in December 2015. For the first time in seven years following the 2008 financial crisis, the Federal Reserve raised interest rates by 25 basis points from near-zero levels at that time.

The current decline owes to many Americans’ uncertainty in long-term prospects. Nonetheless, as other analyses have shown, American consumers are slightly optimistic about increasing their closed-ended credit (non-revolving credit). Student loan debt increased by $41.4 billion in the first quarter of 2020 on an unadjusted basis, reflecting Americans’ increased interest in education. A similar increase was also seen during the Great Recession, as job scarcity prompted many individuals to go back to school to bolster their credentials.

Total payroll employment fell by 20.5 million in April and the unemployment rate soared to 14.7%. Residential construction employment decreased by 415,000 in April to 2.5 million. This drop brought the current level of residential construction employment back to the level in December 2015 (2,538,000 jobs). Total construction industry (both residential and nonresidential) employment dropped by about 1 million to 6.6 million in April.

The Bureau of Labor Statistics released the Employment Situation Summary for April. Total nonfarm payroll employment fell by 20.5 million in April, after a loss of 870,000 jobs (revised) in March. The April job loss was unprecedented in the history of data series since 1939 and brought total nonfarm payroll employment to the lowest level since February 2011. The Labor Department mentioned in the release that the changes in these measures reflect the impact of the coronavirus (COVID-19) pandemic and efforts to contain it.

Meanwhile, the unemployment rate increased by 10.3 percentage points to 14.7% in April. It was the highest rate that hasn’t been seen since the Great Depression (lasting from 1929 to 1939). As people stayed at home and businesses shut down to slow the spread of the COVID-19, 33.5 million people across the country have filed for unemployment benefits over the past seven weeks, seeking financial relief. If you were looking for good news report, perhaps consider that 18 million people classified themselves as on furlough on a temporary basis, perhaps setting the stage for rebound as the economy reopens.

In April, the number of employed persons decreased by about 22.4 million, while the number of unemployed persons rose by 15.9 million to 23 million. The labor force participation rate, the proportion of the population either looking for a job or already with a job, declined by 2.5 percentage points to 60.2%% in April.

The April job loss broadly reflected the effects of the COVID-19 pandemic on the labor market and were widespread in all major industry sectors. Employment in leisure and hospitality plummeted about 7.7 million, the largest decline among all major industry sectors. Almost three quarters of these drop occurred in food services and drinking places. Meanwhile, professional and business services, retail trade and health care and social assistance lost more than 2 million jobs in April.

Additionally, employment in the overall construction sector decreased by 975,000 in April. The number of residential construction jobs decreased by 415,000 in April, the largest drop ever in the history of data series.

Residential construction employment now stands at 2.5 million in April, broken down as 722,000 builders and 1.8 million residential specialty trade contractors. The April job loss dragged the 6-month moving average down to the negative. The 6-month moving average of job gains for residential construction is -64,217 a month. Over the last 12 months, home builders and remodelers shed 353,700 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 554,700 positions, a big drop from 983,600 positions in February 2020 due to the impact of the COVID-10 pandemic.

In April, the unemployment rate for construction workers rose to 16.1% on a seasonally adjusted basis, from 5.3% in March. It was the highest rate since July 2011. The unemployment rate for construction workers has trended downward for the past ten years and remained at a relative low level in the beginning of 2020. The jump in April reflected the impact of the COVID-19 pandemic on construction industry.