Even though construction employment is rebounding more slowly than construction activity, there are more construction jobs per unit under construction than normal
In the monthly employment report for March, the Bureau of Labor Statistics (BLS) reported this morning that residential construction jobs increased 3.8% year-over-year. (We include both “residential building construction” and “residential specialty trade contractors” – here’s why.) That’s faster than the overall employment increase of 1.4% – reflecting that housing is now a critical part of the economic recovery.
A quick glance suggests that construction jobs aren’t keeping up with construction activity. Even though residential construction employment growth is outpacing overall employment growth, it’s puny relative to the rebound in construction activity, measured in housing units or dollars:
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The Housing Recovery: Jobs, Housing Units, and Dollar Value |
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|
% Change |
% Change since bottom |
|
| Residential construction jobs |
3.8% |
7.0% |
| New housing units under construction |
28% |
39% |
| Dollar value of residential construction (new construction only) |
34% |
50% |
| Dollar value of residential construction (new construction plus improvements) |
18% |
32% |
| Note: Jobs data through March 2013, from BLS; units under construction and dollar values through February 2013, from Census. Dollar values are adjusted for inflation and reflect the cost of labor, materials, contractor’s profit, and more. “Bottom” was January 2011 for jobs; Aug 2011 for units; May 2011 for dollar value (new only); and July 2011 for dollar value (new plus improvements). | ||
Rents rose just 0.1% year-over-year on single-family homes and 2.9% on apartments. Locally, rents on single-family homes are flat or falling in Las Vegas, Phoenix, and Atlanta
The Trulia Price Monitor and the Trulia Rent Monitor are the earliest leading indicators of how asking prices and rents are trending nationally and locally. They adjust for the changing mix of listed homes and therefore show what’s really happening to asking prices and rents. Because asking prices lead sales prices by approximately two or more months, the Monitors reveal trends before other price indexes do. With that, here’s the scoop on where prices and rents are headed.
Prices Up 7.2% Year-over-Year, Rising in 91 of 100 Largest Metros
In March, asking home prices rose 1.1% month-over-month, seasonally adjusted. That’s an annualized growth rate of 14%. Quarter-over-quarter, prices are up 3.5%, seasonally adjusted. Year-over-year, prices are up 7.2% nationally and are higher than one year ago in 91 of the 100 largest metros.
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March 2013 Trulia Price Monitor Summary |
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|
% change in asking prices |
# of 100 largest metros with asking-price increases |
% change in asking prices, excluding foreclosures |
|
| Month-over-month, seasonally adjusted |
1.1% |
Not reported |
1.4% |
| Quarter-over-quarter, seasonally adjusted |
3.5% |
90 |
4.0% |
| Year-over-year |
7.2% |
91 |
8.0% |
Neighborhoods near Major League Baseball stadiums cost more – especially if the team has a better shot at winning the 2013 World Series.
Baseball’s 2013 season begins Sunday night, when the Texas Rangers go to Houston to take on the Astros. Most other teams kick off the season on Monday. To mark the annual start of America’s national pastime, we looked at home prices in the neighborhoods near major-league stadiums.
If you want to live close enough to the ballpark to hear the crowd and see the lights from home–and of course, walk to the game–it’ll cost you. We examined asking home prices from the past year on Trulia in the neighborhoods within a mile or two of each stadium (excluding Toronto). It costs most to live near AT&T Park, home of the San Francisco Giants: $653 per square foot. Living near Atlanta’s Turner Field or Kansas City’s Kauffman Stadium costs only one tenth as much:
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Top 5 Most Expensive Baseball Stadium Neighborhoods |
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| # | Team | Stadium | Median price per SQFT | Stadium area price relative to metro price |
| 1 | San Francisco Giants | AT&T Park |
$653 |
1.3 |
| 2 | Boston Red Sox | Fenway Park |
$584 |
2.6 |
| 3 | San Diego Padres | PETCO Park |
$435 |
1.9 |
| 4 | Washington Nationals | Nationals Park |
$392 |
2.3 |
| 5 | Los Angeles Dodgers | Dodger Stadium |
$387 |
1.6 |
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Top 5 Least Expensive Baseball Stadium Neighborhoods |
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| # | Team | Stadium | Median price per SQFT | Stadium area price relative to metro price |
| 1 | Kansas City Royals | Kauffman Stadium |
$28 |
0.3 |
| 2 | Atlanta Braves | Turner Field |
$64 |
0.9 |
| 3 | Milwaukee Brewers | Miller Park |
$72 |
0.7 |
| 4 | Pittsburgh Pirates | PNC Park |
$85 |
0.9 |
| 5 | Texas Rangers | Rangers Ballpark |
$86 |
1.1 |
Note: median price per square foot in the neighborhood approximately one or two miles around the stadium. Final column is the ratio of stadium-area median price to metro median price. Values above 1 mean the stadium area is more expensive than the metro area overall.
0 commentsLow mortgage rates have kept homeownership less expensive than renting in all 100 large metros
Even though asking home prices rose 7.0% in the last year, outpacing rent increases of 3.2%, the gap between buying and renting has narrowed only slightly. One year ago, buying was 46% cheaper than renting. Today’s it’s 44% cheaper to buy versus rent. In fact, homeownership is cheaper than renting in all of America’s 100 largest metros. That’s because falling mortgage rates have kept buying almost as affordable, relative to renting, as it was last year. According to Freddie Mac, between February 2012 and February 2013 the 30-year fixed rate dropped from 3.9% to 3.5%, though rates have been rising in March.
To determine whether renting or buying a home costs less, we do the following:
To compare the costs of owning and renting, we assume people will get a 3.5% mortgage rate, reside in the 25% tax bracket and itemize their federal tax deductions, and will stay in their home for seven years. We also assume buyers get a 30-year fixed-rate mortgage and put 20% down. Under all of these assumptions, buying is 44% cheaper than renting nationwide, taking into account all of the costs and proceeds from buying or renting over the entire seven-year period. We also look at alternative scenarios by changing the mortgage rate, the income tax bracket for tax deductions, and the number of years one stays in the home. Our interactive map shows how the math changes under alternative assumptions. And if you’re interested, check out our detailed methodology which explains our entire approach, step by step.
Savings from Buying Versus Renting Smallest in California and New York, Biggest in the Midwest
Buying a home is cheaper than renting in all of the 100 largest metro areas, but buying ranges from 19% cheaper than renting in San Francisco to 70% cheaper than renting in Detroit. The financial benefit of buying instead of renting is narrowest in San Francisco, Honolulu, San Jose, and New York.
Over the past year, the gap between renting and buying has narrowed most in the Bay Area. One year ago, buying was 35% cheaper than renting in San Francisco and 38% cheaper than renting in San Jose; now, the difference is 19% and 24%, respectively. These metros have seen strong price increases year-over-year. In contrast, the gap didn’t narrow at all in New York, where buying remains 26% cheaper than renting, both now and a year ago. On Long Island, the difference actually widened from 34% one year ago to 36% today. New York, Long Island, and other Northeastern metros have seen more modest price rebounds over the past year, despite rising rents:
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Where Buying a Home is a Tougher Call |
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| # | U.S. Metro |
Cost of Buying vs. Renting (%), 2013 |
Cost of Buying vs. Renting (%), 2012 |
| 1 | San Francisco, CA |
-19% |
-35% |
| 2 | Honolulu, HI |
-23% |
-26% |
| 3 | San Jose, CA |
-24% |
-38% |
| 4 | New York, NY-NJ |
-26% |
-26% |
| 5 | Albany, NY |
-30% |
-34% |
| 6 | Orange County, CA |
-32% |
-41% |
| 7 | San Diego, CA |
-33% |
-42% |
| 8 | Los Angeles, CA |
-35% |
-37% |
| 9 | Long Island, NY |
-36% |
-34% |
| 10 | Ventura County, CA |
-36% |
-43% |
Note: Negative numbers indicate that buying costs less than renting. For example, buying a home in San Francisco is 19% cheaper than renting in 2013. Trulia’s rent vs. buy calculation assumes a 3.5% 30-year fixed-rate mortgage, 20% down, itemizing tax deductions at the 25% bracket, and 7 years in the home.
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