Residential Building Continues to Dominate Construction Spending

Total construction spending continues to roar ahead of its 2021 pace, led again in March by another double digit increase in the residential component. The U.S. Census Bureau says the investment in all types of construction was at a seasonally adjusted rate of $1.731 trillion in March, an 0.1 percent gain compared to February and up 11.7 percent year-over-year. So far in 2022 there has been a total of $376.337 billion spent, 12.0 percent growth compared to the first three months of last year. Spending in the private sector increased 0.2 percent from February to March at an annual rate of $1.380 trillion. The residential share of that spending rose 1.0 percent month-over-month compared to a gain of 0.7 percent in February. The annual rate in March was $88.045 billion, up 18.4 percent compared to March 2021. The non-residential component fell 1.2 percent from the prior month but is still 8.5 percent higher than in March 2021. Na Zhao, analyst for the National Association of Home Builders (NAHB) said the monthly growth in residential spending came from new single-family construction at $472.6 billion a 1.3 percent increase from February and 18.5 percent year over year while multifamily spending slipped 0.5 percent. Spending on home improvements also rose 1.1 percent for the month. Zhao says NAHB’s construction spending index illustrates the solid growth in single-family construction and home improvement from the second half of 2019 to February 2020, when the pandemic hit, and the quick rebound since July 2020. New multifamily construction spending has picked up the pace after a slowdown in the second half of 2019. However, he says home building is still facing supply chain issues, which means the industry is dealing with rising material costs as well as ongoing labor shortages.

May 3, 2022 Download our Mobile App: Download our Mobile App: Housing News Residential Building Continues to Dominate Construction Spending Total construction spending continues to roar ahead of its 2021 pace, led again in March by another double digit increase in the residential component. The U.S. Census Bureau says the investment in all types of construction was at a seasonally adju... (read more) Mortgage Rate Watch Mortgage Rates Steady at Long-Term Highs Ahead of Fed Mortgage rates hit their highest levels since 2009 yesterday amid the fastest spike since the early 1980s. Today's rates were very similar on average, but the bond market left some room for mortgage lenders to offer improvements during the da... (read more) MBS Commentary MBS Live Recap: Fed Day Preview: What Are They Doing and How Much Will Bonds Care? Fed Day Preview: What Are They Doing and How Much Will Bonds Care? Given all the bond market volatility seen recently, the outlook for tomorrow's Fed announcement is surprisingly well understood by market par... (read more) Rob Chrisman Customer Experience, Non-QM, eClosing Products; Conventional Conforming Program Adjustments With the yield on the risk-free 10-year Treasury note hitting 3 percent for the first time since 2018, you deserve some cutting-edge humor. Two hats were hanging on a hat rack in the hallway. One hat said to the other, “You stay here; I'll go on ahea... (read more) Mortgage Rates Mortgage Rates Steady at Long-Term Highs Ahead of Fed 30 Yr. Fixed Rate 5.54% -0.01% Rate Change Points Mortgage News Daily 30 Yr. Fixed 5.54% -0.01 0.40 15 Yr. Fixed 4.88% -0.01 0.40 30 Yr. FHA 5.00% 0.00 0.00 30 Yr. Jumbo 4.70% +0.02 0.00 5/1 ARM 4.62% +0.07 1.00 Updates Daily - Last Update: 5/3 15 Yr. Fixed Rate 4.88% -0.01% Rate Change Points Freddie Mac 30 Yr. Fixed 5.10% -0.01 0.80 15 Yr. Fixed 4.40% +0.02 0.90 5/1 Yr. ARM 3.78% +0.03 0.30 Updates Weekly - Last Update: 4/28 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 5.37% +0.17 0.67 15 Yr. Fixed 4.68% +0.24 0.80 30 Yr. Jumbo 4.89% +0.13 0.47 Updates Weekly - Last Update: 4/27 MBS / Treasuries MBS Live Recap: Fed Day Preview: What Are They Doing and How Much Will Bonds Care? UMBS 30YR 4.0 99.00 -0.08 Price / Yield Change MBS UMBS 4.0 99.00 -0.08 UMBS 4.5 101.19 -0.11 GNMA 4.0 99.78 -0.08 GNMA 4.5 101.48 -0.08 Pricing as of: 5/3 5:21PM EST 10 Year US Treasury 2.9712 -0.0056 Price / Yield Change US Treasury 2 YR Treasury 2.776 +0.045 5 YR Treasury 3.015 +0.012 7 YR Treasury 3.035 +0.005 10 YR Treasury 2.971 -0.006 30 YR Treasury 3.011 -0.018 Pricing as of: 5/3 5:21PM EST Latest Video Even if Fed hikes in 50 basis point increments, it won't get to neutral til... There's a strong disincentive to list homes due to high mortgage rates, say... The 2pm Bond Report - May 3, 2022 The 9am Bond Report - May 3, 2022 Around the Web CNBC The Fed is expected to raise rates by a half point. Investors wonder if it will get more aggressive Calculated Risk Blog Rent Increases Up Sharply Year-over-year, Pace may be slowing CNBC Home affordability is nearly the worst on record as mortgage rates spike Calculated Risk Blog CoreLogic: House Prices up Record 20.9% YoY in March Calculated Risk Blog Black Knight Mortgage Monitor: Record Low Delinquencies, "Home Affordability Nears All-Time Low" Calculated Risk Blog BLS: Job Openings at Series High 11.5 million in March Calculated Risk Blog Fannie REO inventory increased in Q1 year-over-year; Expected to increase further in 2022 CNBC The Fed's aggressive hiking campaign will lead to a recession, according to CNBC survey Reuters German Bund yield hits 1% for first time since 2015 CNBC 10-year Treasury yield holds at 3%; benchmark German bund yield hits 1% Calculated Risk Blog Construction Spending Increased 0.1% in March Fannie Mae Fannie Mae Reports Net Income of $4.4 Billion for First Quarter 2022 Eye on Housing Slight Rise for Construction Job Openings

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