Data from the U.S. Census Bureau’s Survey of Market Absorption (SOMA) show that the absorption rate of unfurnished, unsubsidized apartments (the share rented out in the first three months following completion) remained essentially flat at 58 percent in the third quarter of 2019 (from 57 percent in the third quarter of 2018) (Figure 1).

The number of apartments completed in the third quarter of 2019 totaled to 69,890, a drop from the amount completed in the third quarter of 2018 (75,870). The median asking rent price for apartments completed in the third quarter was $1,654, only 1 percent higher than the median asking price of $1,634 in the third quarter of 2018.

The SOMA also has data on condominium completions and absorption rates (Figure 2). Condominium completions were significantly higher in the third quarter of 2019 (9,169) than they were in the third quarter of 2018 (4,957). But the absorption rate of condominiums fell slightly, going from 68 percent in the third quarter of 2018 to 64 percent in the third quarter of 2019.

The median asking sales price of condominiums was $465,300 in the third quarter, about 15 percent lower than the asking sales price of $545,800 in the third quarter of 2018.

The SOMA data show that the absorption rate for apartments was solid and stable in the third quarter of 2019, while the absorption rate for condominiums dropped only slightly. It is important to note that this data precede the outbreak of COVID-19 pandemic and future SOMA releases won’t show its impact for some time.

The most recent data release from the Bureau of Economic Analysis (BEA) showed that personal income fell sharply in March to a seasonally adjusted annual rate (SAAR) of $18,693 billion. The 2% decline in personal income was largely due to losses in compensation, a result of massive layoffs during the second half of March when the ‘stay-at-home’ orders were issued to deal with the COVID-19 pandemic. Real disposable income (income remaining after adjusting for taxes and inflation) went down by 1.7% after a 0.34% gain in February.

Personal consumption expenditures (PCE) plunged 7.5% in March, the steepest monthly decline on record since 1959, as businesses are shut down and households are complying with the ‘stay-at-home’ orders. The sharp decline in personal consumption expenditures, which make up more than two thirds of the economy, pulled down the gross domestic product in March. However, BEA pointed out that “the full economic effects of the COVID-19 pandemic cannot be quantified in the Personal Income and Outlays estimate for March 2020 because the impacts are generally embedded in source data and cannot be separately identified.”

In March, personal savings increased to $2.17 billion (SAAR), accounting for 13.1% of disposable income. This record high savings rate reflects a slowdown in spending and economic growth during the COVID-19 pandemic.

The U.S. Department of Labor released the Unemployment Insurance Weekly Claims Report for the week ending April 25^th. As the impact of the COVID-19 pandemic continues, the number of initial claims for unemployment insurance hit 3.8 million, bringing the total jobless claims to 30.3 million over the past six weeks.

In the week ending April 25^th, the number of people who applied for unemployment benefits, known as jobless claims, was at a seasonally adjusted level of 3,839,000, a decrease of 603,000 from the previous week’s revised level (4,442,000 claims). The four-week moving average decreased to 5,033,250, from a revised average of 5,790,250 in the previous week. After it hit a record of 6.9 million for the week ending March 28^th, jobless claims declined slightly by 0.3 million, 1.4 million, 0.8 million and 0.6 million in the following four weeks.

All the U.S. job gains in the past decade were wiped out in only six weeks. The COVID-19 pandemic added 30.3 million jobless claims over the past six weeks while it took a decade for the U.S. economy to create 22.4 million jobs since November 2009.

The seasonally adjusted insured unemployment rate increased by 1.5 percentage points to 12.4% for the week ending April 18^th. The number for seasonally adjusted insured unemployment increased to 17,992,000 during the week ending April 18^th, from a downward revised level of 15,818,000 in the previous week. It marks so far the highest level of seasonally adjusted insured unemployment in the history of the seasonally adjusted series.

The U.S. Department of Labor also released the monthly report providing information about the characteristics of Unemployment Insurance (UI) claimants by industry, on a not seasonally adjusted basis. The chart below presents the annual changes of insured unemployment for construction and real estate (rental and leasing) industries from January 2005 to March 2020. According to the March NSA figures, the impact of the COVID-19 pandemic on construction and real estate industries is not obvious, maybe because the construction is categorized as essential work and are continuing in many states.

Builder confidence in the single-family 55+ housing market sank 30 points to 38 in the first quarter of 2020, according to the National Association of Home Builders’ 55+ Housing Market Index (55+HMI) (Figure 1). This is the lowest reading since the fourth quarter of 2012.

The 55+HMI survey produces two indices, one measuring the 55+ single-family market and another for the 55+ multifamily condominium market. Each segment of the 55+ HMI measures builder sentiment based on a survey that asks if current sales, prospective buyer traffic and anticipated six-month sales for that market are good, fair or poor (high, average or low for traffic).

Among the three components of the 55+ single-family HMI, present sales fell 25 points to 48, expected sales for the next six months dropped 41 points to 34 and traffic of prospective buyers fell 33 points to 18.

The 55+ multifamily condo HMI fell 29 points to 29—also the lowest reading since the fourth quarter of 2012 (Figure 2). All three index components posted decreases from the previous quarter: Present sales fell 24 points to 36, expected sales for the next six months dropped 34 points to 27 and traffic of prospective buyers tumbled 39 points to 14.

In addition to the 55+HMIs, NAHB produces four indices measuring supply and demand in the 55+ multifamily rental market. All indices posted declines in the first quarter of 2020: present production dropped 18 points to 47, future expected production fell 24 points to 42, present demand decreased 32 points to 50 and future expected demand dropped 34 points to 49.

Like the broader housing market, the 55+ housing market has taken a significant hit due to the effects of the pandemic. NAHB expects further fallout from the virus in the short-term, but is forecasting the housing market to stabilize later this year and help lead the economy back to more solid footing.

For the full 55+ HMI tables, please visit nahb.org/55hmi.

According to the latest Housing Trends Report (HTR), the share of prospective home buyers expecting their house search to get easier in the months ahead rose to 25% in the first quarter of 2020, up from 16% and 22%, respectively, in the first quarters of 2018 and 2019. This rise marks the third consecutive year-over-year increase in the share of buyers expecting housing availability to improve. Conversely, the share of buyers who think availability will worsen (or stay the same) has dropped to 62%, compared to 73% and 67% in the first quarters of 2018 and 2019.

The timing of the data collection for this report is highly consequential. The online survey was in the field from March 17 through March 28, the early stage of the COVID-19 crisis in the US. About 12 million people filed for unemployment benefits in the two weeks immediately after data collection closed. For this reason, we assess that responses in this quarter’s report mostly reflect people’s views prior to the full impact of stay-at-home orders and social distancing restrictions imposed by local and state governments.

Across generations, expectations that housing availability will improve are highest among Gen X buyers (27%) and lowest among Boomers (20%). Geographically, 20% to 27% of buyers in every region expect that finding a home will become easier in the months ahead.

Along with this slight uptick in expectations for easier availability in the months ahead, results also show the share of buyers who actually see more homes for-sale (that they like and can afford) holding steady at 31%, compared to 30% in the first quarter of 2019. At the same time, the share of buyers who report less inventory (fewer or the same number) of such homes on the market is 55%, down from 60% a year earlier.

Across generations, over 30% of Gen Z and Millennial buyers report seeing more homes they like and can afford for-sale than three months earlier, compared to 24% of Boomers. Regionally, buyers in the West are the most likely to report seeing more homes for-sale (33%), while those in the Midwest are the least likely (25%).

* Homes with desired features and price point.

** The Housing Trends Report (HTR) 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 second in a series of five posts highlighting results for the first quarter of 2020. See previous post on plans to buy.