About the National Association of Home Builders (NAHB) and Its Economics and Housing Policy Group
Q: What does the NAHB do?
A: The National Association of Home Builders (NAHB) is a Washington, D.C. based trade association whose mission is to enhance the climate for housing and the building industry. Chief among NAHB’s goals is providing and expanding opportunities for all consumers to have safe, decent and affordable housing. As “the voice of America’s housing industry,” NAHB helps promote policies that will keep housing a national priority. Since 1942, NAHB has been serving its members, the housing industry, and the public at large.
The Economics and Housing Policy Groups provide information, statistics, and analysis to NAHB members, subscribers, and the general public. Subscribers receive detailed statistics and forecasts for the United States, the 50 states, and major metro markets. Subscription information and product samples can be found at www.HousingEconomics.com.
Q: What doesn't NAHB do?
•We do not recommend or rate builders.
•We do not resolve disputes you may have with builders.
Q: Where can I get information about Local Home Builders’ Associations?
A: You can find Local Home Builders’ Associations at our website. Click on the state you are interested in for listings.
A:HousingEconomics.com is a subscription service providing in depth housing and economic data and forecasts for those who want greater detail than they can find at NAHB's HousingData section of the website.
A: Once you become a subscriber you will have access for a full year to all the data and reports described at the samples page.
We provide both a single-user and a multiple-access subscription depending on your needs. A single user subscription provides access to one user at your organization. If more than one staff member at your company needs access to economic data, the HousingEconomics.com Multiple-License is the best choice. With this license, more than one person can access HousingEconomics.com simultaneously. In addition, it gives you the flexibility to add or remove staff subscribers in response to changes in your business.
If your company requires access to HousingEconomics.com for more than 9 employees or has offices in several locations, NAHB can provide tailored solutions. (Contact Lay Bragg at 202-266-8270 or email@example.com.)
Q: Can I subscribe to HousingEconomics.com if I am not a member of NAHB?
A: Yes, a subscription to HousingEconomics.com is available to the general public. The annual subscription is available for purchase regardless of NAHB membership status. However, members of NAHB do receive a discount off of the subscription fee when they subscribe to HousingEconomics.com.
Q: I need only one report (forecast, number, etc.), can I purchase a single report?
A: No, HousingEconomics.com is not able to sell single reports, forecasts or numbers. You must purchase the appropriate subscription. Once you subscribe online, all the HousingEconomics.com reports, statistics and forecasts will be accessible to you for a year. You will also receive several forecast updates throughout the year.
Q: What is a housing start? What is a building permit? What is the relationship between building permits, housing starts, and housing completions?
A: A building permit is an authorization to construct a specified building on a given site issued by the appropriate local government agency. Typically, a building permit must be obtained prior to the commencement of site preparation and/or building construction. A start is defined as excavation (ground breaking) for the footings or foundation of a residential structure. For a multifamily structure, all units are counted as started when the structure is started. Not all the houses with building permits get started (built), and not all started units get completed, although most do.
For more information on building permits, housing starts, and housing completions, visit Census.gov.
A: The Census Bureau publishes historical housing start data for the United States and the four census regions (Northeast, South, Midwest, and West) which are available (for subscribers to HousingEconomics.com) on the Housing Starts page. National housing starts data are reported as single-family (one unit), multifamily (the total of the separately reported 2 to 4 units and 5 or more units), and total starts (single-family plus multifamily starts).
**The Census Bureau does not provide housing starts data for states or metros.
Q: Where can I find new housing permits information for my state/metro? A: The U.S. Census Bureau collects building permit data from local permit issuing places and tabulates the data at the county, metropolitan area and state levels. NAHB makes the most recent year-to-date data available to the public for the states, the District of Columbia, and 360 metropolitan statistical areas under the Construction Statistics page. HousingEconomics.com Executive Level subscribers can also find a link to an Excel table showing annual permits history for all the states and 360 metros on this page.
Additional detail for building permits (such as metros not listed in our tables and county permit data) can be found on the Census Bureau’s New Residential Construction website.
Q: Besides new housing starts and building permits, what other information is available from the U.S. Census Bureau?
A: The U.S. Census Bureau collects, tabulates, and publishes monthly statistics on New Single-Family Houses Sold, Housing Completions, Manufactured Home Placements, and Dollar Value of Construction Put in Place. In addition they also produce quarterly estimates of the Residential Construction in Selected Metropolitan Areas, Price Index of New Single-Family Houses Sold, and Dollars Spent on Residential Improvements and Repairs. To find these items, go to the Census Bureau.
Q: Why are new home sales consistently lower than single-family housing starts? Does this mean a huge inventory of unsold homes is building up?
A: No. Houses built for rent, houses built by a general contractor on the owner's land, and owner-built homes are not included in new home sales. Therefore the number of new home sales is consistently lower than total single-family starts or completions. Roughly 20 years ago, this represented 40 percent of starts, today the number is closer to 20 percent of starts.
Q: The U.S. Census Bureau's website is very large. Where can I find residential construction statistics?
A: The Census Bureau has several logical starting points depending upon the kind of statistics you are looking for. For residential construction we suggest you bookmark this web page as your starting point with the Census Bureau: http://www.census.gov/mcd/.
Q: Does the Census Bureau have any housing related reports?
A: Yes, there are several reports. The Census Bureau's website has a special section - "Census 2010". Use this link as a starting place to find housing data reports based upon the 2010 census.
Data from the 2010 census will begin to become available after February 2011, with much of the housing related data expected to be available by September 2013. To review the Census 2010 schedule, go to the Census Data Products.
Q: How long is a typical new house on the market before it is sold?
A: Most new houses are under contract before completion with title transferred shortly after completion. In fact, a majority of new houses have signed contracts before construction begins. For homes that are still unsold at completion, Census Bureau publishes Houses Sold and For Sale, by Stage of Construction.
Q: What is housing’s contribution on national economy?
A: Housing affects both the national and local economy. New residential construction accounts for 3 to 6 percent of gross domestic product (GDP). The shelter and other services provided by housing are part of personal consumption and represent more than 10 percent of GDP. NAHB has a detailed description of housing’s contribution to GDP.
Q: How many companies (establishments) build homes in the United States?
A: According to the Census Bureau's 2007 Economic Census (which is conducted every five years), there were 98,067 residential construction building establishments. Of these, 35,378 were "New Housing Operative Builders" (they acquire land, building and selling houses on their own land). Of the "non-operative builders" (whom we call "custom builders"--builders who build housing under contract for someone else who owns the land), 59,679 are in "new single-family housing construction", and 3,010 in "new multifamily housing construction". Including establishments that are Residential Remodelers raises the total number of firms to 171,955.
Another source is the Census Bureau’s County Business Patterns report. It indicates that there were 187,327 establishments involved in Residential Building Construction in 2008, which includes Residential Remodelers.
Q: What is Seasonally Adjusted Annual Rate (SAAR)? A: Seasonal adjustment is the process of estimating and removing seasonal effects from series such as housing starts or sales to allow examination of underlying trends and business cycles. Annual rates indicate the annual total that could be expected if the month or quarter had its typical share of the year.
Seasonal adjustment does not account for abnormal weather conditions, only for “normal” seasonal variation occurring because of typical weather conditions, relationship to the school year, number of days in the month, etc...
Except for the data on existing home sales, the seasonally-adjusted construction data include an adjustment for the days of the week that occur in the month. Thus, if there are 5 Saturdays in a month, and Saturday is typically a day when more activity (such as new home sales) occurs, then the annual rate is adjusted downward.
The seasonal adjustment factors are based on moving averages over about five years, so that a trend towards more (or less) activity in a particular month of the year will gradually be reflected in the seasonal factor for that month.
The average of the monthly or quarterly seasonally-adjusted annual rates for a year will not precisely match the annual total.
The complex program that calculates seasonal factors automatically gives reduced weight to extreme values in the recent past.
Q: In the NAHB Economic and Housing Executive-Level Forecast, what does the “% Change AR” mean?
A: The term “% Change AR” means “percentage change at an annual rate”. It answers the question, “If the percentage change for a given variable between two consecutive quarters were to persist for an entire year, what would the annual percentage rate of change be?” This is roughly equivalent to taking the quarterly rate of change and multiplying by 4. For example, assume annual rate of housing starts was 1.5 million in the first quarter and 1.6 million in second quarter. The quarterly percentage change for these numbers is 6.67%. Multiplying by 4 gives you 26.67%. However, to be completely accurate, quarterly compounding must be taken into account (and is the method used to calculate the numbers reported in our tables). Thus, in this case, the annualized rate of change is 29.45% rather than 26.67%.
Note that you cannot average the various quarterly percentage changes at an annual rate for the year to get the annual percentage rate of change.
Q: How do you produce the state and metro housing starts forecasts?
A: The Census Bureau does not estimate starts data for states or metros. NAHB Economics uses Moody’s Ecomomy.com estimates of historical housing starts for the states, the District of Columbia, and 100 metros based on Census Bureau permits data. These “historical” series serve as a starting point for our state and metro forecasts of housing starts.
NAHB has developed forecast models for state and metro housing starts. Key drivers in the model include employment, population, vacancy rates, and housing prices. Our economists also monitor state and local developments that might not be captured in the models but affect residential construction for a particular area.
A: The national quarterly forecast is updated each month. The state, metro, and remodeling forecasts are updated twice a year. The multifamily forecast is updated once a year. The long-term (national) forecast is updated every two years – typically even numbered years.
Q: What is the NAHB-Wells Fargo Housing Market Index (HMI)?
A: The NAHB-Wells Fargo Housing Market Index (HMI)is based on a monthly survey of NAHB members designed to take the pulse of the housing industry, especially the single-family industry. The survey asks respondents to rate general economic and housing market conditions. For more background on the HMI, visit the "What is the NAHB-Wells Fargo Housing Market Index?" page. For HMI data, visit www.nahb.org/HMI.
Q: What is the NAHB-Wells Fargo Housing Opportunity Index (HOI)?
A: The NAHB-Wells Fargo Housing Opportunity Index (HOI) for a given area is defined as the share of homes sold in that area that would have been affordable to a family earning the local median income based on standard mortgage underwriting criteria. Therefore, there are really two major components - income and housing cost. For more details, visit "What is the NAHB-Wells Fargo Housing Opportunity Index?". For HOI data, visit http://www.nahb.org/HOI.
Q: What are the Multifamily Market Indexes (MCMI and MRMI)?
A: NAHB began producing the NAHB-Fannie Mae Multifamily (Rental and Condo) Market Indices in the fourth quarter of 2002. The Multifamily Market Indexes are Diffusion Indexes - calculated as [(High - Low) + 100]/2. Data are NOT seasonally adjusted. MRMI data are derived from ratings of multifamily starts and multifamily rental occupancy (both present and expected) and apartments available for rent, volume of calls from prospective renters, and asking or effective rent. The scale is from 1 to 100, with a rating of 50 generally indicating that the number of positive or good responses received from builders and property managers are about the same as the number of negative or poor responses. For more details, visit www.nahb.org/MMS.
A: In general, about half of the selling price of a home is the on-site cost of labor and materials. Of that, about 2/3 of the "hard" costs (i.e., 1/3 of the selling price) is the cost of materials, and 1/3 of the hard costs (1/6 of the selling price) is on-site construction labor, most of which is employed by subs rather than the builder. There is also additional non-construction labor such as sales workers, office staff, etc.
NAHB periodically conducts the construction cost survey, which collect information from builders on the various components that go into the price of a typical single-family home. The results of the 2009 construction cost survey are presented in the NAHB Special Study – Breaking Down House Price and Construction Costs.
Q: Does NAHB have any other information on building material prices besides lumber prices?
A: NAHB maintains three tables on building materials costs for subscribers to HousingEconomics.com (Producer Price Index for Selected Building Materials, Producer Price Index for Selected Building Materials (PART II), and Inflation Indicators). The tables show the percentage change in national prices based on Producer Price Index (PPI) data for most of the materials. View a free sample by clicking Full Sample (Tables 22, 22a, and 23).
Q: Where can I obtain information about building material usage in the construction of new homes in the United States?
A: Home Innovation Research Labs collects data on building material usage through the Builder Practices Surveys - a comprehensive annual survey with thousands of builders across the United States. This survey captures information on all the major building components used for residential construction. Builder Practice Reports provide information on usage and pricing of building products by regions. The reports can be found at the Home Innovation Research Labs website.
Q: Where can we find data on the current sale prices of existing homes?
A: The National Association of REALTORS® has a research section on their website. The reports include economic and housing data, national and local forecasting, and existing home sales. To find their data on current sales of existing homes visit Realtor.com. NAHB provides NAR national existing home prices. HousingEconomics subscribers also have access to additional price data.
Q: Where else can we find statistics on new construction activity, including shipments of new manufactured homes?
A: The U.S. Department of Housing and Urban Development maintains a research website called HUD-User. This website provides access to pertinent information, such as research reports and periodicals covering housing in the United States. To find information on shipments of new manufactured homes, view HUD's quarterly periodical U.S. Housing Market Conditions. This periodical also contains data on housing permits, starts, completions, and homeownership rates. Additional information on manufactured homes shipments can be found on the Manufactured Housing Institute’s website.
Q: Where can I find the average price of a kitchen remodel project and the impact the project has on the value of thehome?
A: Remodeling Online, the online version of Remodeling Magazine, has a section on Cost vs. Value. This section includes the average price of kitchen remodeling projects and the real estate value of the remodeling project for 35 of the United States major metropolitan areas.
Q: We are a mid-sized custom homebuilder and want to know the salary range for superintendents. Where can we find wageinformation for construction professionals?
A: The National Association of Home Builders (NAHB) publishes a book titled, The Cost of Doing Business Study, that contains business statistics such as financial ratios, profit margins, and salary ranges for officers, managers and superintendents for builders of various sizes including the mid-sized custom homebuilder. This book is based upon surveys conducted with builders across the United States. For additional information about this book and other financial books for builders visit the NAHB's online bookstore, at www.BuilderBooks.com.
Q: Where can I find additional links/information to monitor the housing market?
A: The following are links to useful information from government agencies and NAHB that will enable you to monitor the housing market. To access the latest information available, simply click the links.
Characteristics of New Housing Highlights the latest data on new-home characteristics released by the U.S. Census Department. Includes links to the complete Census report and other trends researched by NAHB.
Housing Starts Updated monthly and based on a seasonally adjusted annual rate.