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Posts Tagged ‘Economic Activity’

Q2 Best Economic Growth in Years, Per Federal Data, MHVille Insights

July 27th, 2018 Comments off

 

BEAq2EconomicDataManufacturedHousingIndustryInsightsDailyBusinessNewsMHproNews

There are numerous points that mainstream media pundits are passing over or missing in the latest economic report. Certainly, the major news outlets fail to mention manufactured housing (MH) at all when it comes to economic data and potential impact.

 

The Daily Business News will begin by setting the stage with some terminology.

The Department of Commerce’s (DoC) Bureau of Economic Analysis (BEA) tells the Daily Business News that “BEA produces some of the most closely watched economic statistics that influence decisions of government officials, business people, and individuals. These statistics provide a comprehensive, up-to-date picture of the U.S. economy. The data on this page are drawn from featured BEA economic accounts.

Gross domestic product is a monetary measure of the market value of all the final goods and services produced in a period of time,” explains Wikipedia.

Among the factors often glossed over is the drag caused by the windstorms and other disasters of 2017. It’s significant to note the growth in spite of hundreds of billions of dollars in losses caused by hurricanes and other natural disasters.

 

 

Best Quarterly Data from the BEA in Years

Real gross domestic product increased at an annual rate of 4.1 percent in the second quarter of 2018 (table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 2.2 percent (revised),” said the BEA to MHProNews.

RealGDPBEAdataManufacturedHousingIndustryDailyBusinessNEwsMHproNEws

The increase in business investment reflected increases in structures, intellectual property products, and equipment. The increase in government spending reflected increases in federal national defense, and state and local government spending,” per the BEA.

Structures, of course, includes commercial and residential building. The later includes HUD Code manufactured homes, and both of those categories include modular construction too.

SunCommunitiesSUI-InvestorPage11ManufacturedHomeVsSingleFamilyHousingManufacturedHomeCommunitiesIndustryDailyBusinessNewsMHProNews600

Graphic, data, per Sun Communities (SUI).  When the price advantages are so strong, how can MH be lagging in this kind of economic environment?

Income growth has also been steady, which is useful for incentifying home buying. But as some pundits have noted, even in a tight labor market, wage growth is still more modest than some would expect. Why?

One answer is technology, as there is a balance of economic pressure from automaton and robotics that could replace human labor. Amazon warehouses, and numerous retailers, are using more robotics, automation or self-checkout. Those work to depress wage growth.

But another is the downward pressure on pay that illegal immigration causes.

Notice that legal immigration can impose some downward pressure – depending on the field of activity, supply and demand – but legal immigrants are still subject to minimum wages.

By contrast, illegals may take jobs that undercut minimum wage laws.

Competition from illegals who are often paid ‘under the table’ thus acts as a drag on overall wage growth. That’s not a political statement, that’s economic reality 101.

 

Manufactured Housing and the Economy

There’s an interesting new CNN article that we will analyze in a separate report, because it cites research previously spotlighted by MHProNews.

What we will note for this report is the following. There is plenty of demand for new housing. A growing economy is good for new housing demand.  So why is manufactured housing lagging?

ConstructionofModestsizedHomesRemainsLimitedHarvardJCHS2018ManufacturedModularHousingDailyBuisnessNewsMHPronEws

The only JCHS graphic that specifically mentions manufactured housing.

The Daily Business News spotlighted the fact that new conventional housing sales have dragged recently. See that linked report, which can be referenced later for more details, below.

 

New Home Sales Fall to 8-Month Low in June, Data Signals Trouble – or Opportunity in Disguise for Manufactured Housing?

The manufactured home market has suffered for over a decade due to regulatory, placement, capital, and financing challenges. That must frankly be coupled with a widespread lack of understanding for the realities of modern manufactured homes, vs. the mobile homes of 42 plus years ago.

There are companies that more successfully address the perception issues on their local market level than their competitors do. Those who do so see sales grow.

Overall however, MHVillage and some state data point to warning signs, even though there is plenty of interest.

 

MHVillage Confirms Data, and Michigan Operational Slide Revealed

These facts point to image and public education needs that ideally are addressed at the local market level, because all sales are local.

The facts about manufactured homes have been available for decades. An example of overall positive third-party research is linked below.

 

Realtor University, Journal for the Center of Real Estate Studies, Makes Corrections– “The Market for Manufactured Homes,” by Scholastica ‘Gay’ Cororaton, CBE

But regulatory reforms and financing have been arguably hobbled. The new report below takes a fresh look at efforts on that front.

 

Focus on More Financing, HUD Program Reforms, Aimed at Increasing Manufactured Homes Sales, Meeting with Assistant Secretary–Federal Housing Commissioner, Brian Montgomery

The economy and manufactured housing could both be growing more rapidly. The report linked below provides a snapshot of how that could be accomplished.

 

 

The National Low Income Housing Coalition (NLIHC) says in a new post that over 7 million new affordable housing units are needed.

The National Association of Realtors (NAR) Chief Economist Lawrence Yun has said there is a total of shortage of some 8.3 million housing units needed.

LawrenceYunNARShort8.3MillionHousingUnitsRisingRentsHousingPricesCuredOnlyByMoreBuilding

Collage by MHProNews.

Those are the examples of why manufactured homes could be growing at a faster pace. Home building factories can arguably ramp up the training of labor faster, per sources, than many site builders can.

 

Next Step Solutions?

A successful independent has said that he supports another new post-production association, to address the needs. “…If retailers would bow up and tell the MHI manufacturers they want dues paid to a new association rather than MHI there will be change. I do believe the majors have weaponized regulation that further entrench their companies or widens and deepens their moat. Keep my name off it please but I’ll support the efforts if [there] is enough backbone out there,” said the quoting the message to MHProNews.

Two state associations came to a similar conclusion last year, and are in the process of launching a new communities focused association.

 

New Manufactured Home Industry National Association Related Statements

Will retailers and other independents involved in the post production sector do the same? MHARR said last year, they will support and encourage such an effort.

Study Recommending New Manufactured Housing Association for Independent Retailers, Communities, Lenders, Others Released

The economy is growing. The Washington Post made it clear that MHI did not intervene in the Pam Danner related issues at HUD.

 

Greener, Stylish Manufactured Homes – Hidden Facts in the Washington Post Manufactured Housing Narrative

 

There will be a range of reactions to the above. What’s yours? “We Provide, You Decide.” © ## (News, analysis, and commentary.)

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SoheylaKovachDailyBusinessNewsMHProNewsMHLivingNewsSubmitted by Soheyla Kovach to the Daily Business News for MHProNews.com. Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.

 

 

 

 

 

Related Reports:

Harvard’s Joint Center for Housing Studies 2018 – Affordability, Manufactured Homes, and Modular Housing Report

Urban Institute Ask for Correction in Analysis of their Manufactured Housing Research, “Follow the Facts,” “Follow the Money”

 

“Take the MH Advantage Challenge – Can You Tell the Difference?” Fisk of Sarah Edelman, Director of Duty to Serve, Single-Family Mortgage Business for Fannie Mae

‘Tip of Iceberg’ – Rick Rand; Marty Lavin, Communities have ‘No Confidence’ in Manufactured Housing Institute, New National Trade Group Announced

Smoking Gun 3 – Warren Buffett, Kevin Clayton, Clayton Homes, 21st Mortgage Corp Tim Williams – Manufactured Home Lending, Sales Grab?

 

U. S. Housing and Economic Progress is Making Haste Slowly

May 12th, 2016 Comments off

home sales rising  housing wire com  creditSan Jose, California led 119 of the 340 metro housing markets nationwide in returning to or exceeding their last normal levels of economic and housing activity in Q1 2016. The markets are gauged by measuring the averages of housing permits, price and employment levels for the past 12 months, and divide each by their annual average over the last period of normal growth.

As pleasantonweekly tells MHProNews, the National Association of Home Builders/First American Leading Markets Index (LMI) indicates that 45 markets experienced a year-over-year net gain. The index’s score hit .95, which means the housing market is operating at 95 percent of normal housing and economic activity.

Housing markets continue to recover gradually, edging along by a firming economy, solid job creation and low mortgage interest rates,” said NAHB Chairman Ed Brady. “We expect the housing sector to improve at a slow, but steady pace throughout the year.” At 49 percent of normal activity, single-family permits are pulling done the numbers.

More than 80% of all metros saw their Leading Markets Index increase or hold steady over the quarter, an important sign that the housing market is heading in the right direction,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Company.

The years 2000-2003 were used as the last normal period for single-family permits and home prices, and 2007 as the base for the employment figures.

The remainder f the top ten: Baton Rouge, LA, Austin, TX, Honolulu and Houston. The last five are Oklahoma City, Los Angeles, Nashville, Charleston, SC and Salt Lake City. ##

(Image credit: housingwire–housing market slowly gaining)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

Economists Expect Home Construction to Rise nearly 20%

April 16th, 2013 Comments off

MoneyMorning tells MHProNews residential construction is currently 2.44% of the gross domestic product (GDP), half of its historical norm, even with last year’s increases in new home construction. According to a Bloomberg survey of economists, housing starts are expected to increase by roughly 20% this year, and over the next two years 1.2 million residential construction jobs will be created. New home-building also has a ripple effect on the economy as a whole—demand for appliances, paint, tile, draperies, furniture, concrete also rise. If home construction returns to adding five percent to the GDP, and related economic activity adds another 13%, the economy could get enough of a shot in the arm to spur the recovery and create jobs and a housing renaissance as well.

(Image credit: Fotosearch Clip Art)

Housing Market may Surpass Manufacturing

March 26th, 2013 Comments off

Reuters informs MHProNews despite the tightness of credit for residential mortgages, the housing market is threatening to take the lead from manufacturing in terms of overall economic activity, as home prices posted their largest year-over-year gain in six and-one-half years in January. While core durable capital goods orders (non-defense and not including aircraft) fell the most since July, the S&P/Case Shiller composite index of 20 metropolitan area housing markets increased 8.1 percent over last January, the largest rise since June 2006. The Commerce Department reports the sales price for a new home gained three percent February over January, and was 2.9 percent ahead of February 2012.

(Image credit: etftrends)

The Fed Says Housing Market Slowly Rising

March 7th, 2013 Comments off

HousingWire informs MHProNews the Federal Reserve’s February Beige Book of growth in economic activity indicates the real estate market in almost all the districts recorded strong improvement as inventories shrank and home prices rose. While in Philadelphia low-end prices were firm or rising and the prices of high-end homes were falling, the districts of Boston, Dallas, Kansas City, Minneapolis, San Francisco and St. Louis showed modest gains overall. Home construction rose in most districts except in Kansas City where it remained unchanged. Multifamily building increased in several districts, but financing problems have stymied Atlanta and Cleveland in that regard.

(Photo credit: benzinga)

For Profit and Non-profit Collaborate To Alleviate Storm Damage

November 14th, 2012 Comments off

Global financial services firm Morgan Stanley and non-profit National Equity Fund, Inc. (NEF) have added $75 million to their joint Rebuilding Local Economies Fund to help provide replacement housing for victims of Hurricane Sandy, according to BusinessWire. Designed to jump-start economic activity with developmental assistance, the fund finances affordable housing for low-income residents in FEMA (Federal Emergency Management Agency)-declared disaster situations. The $200 million fund, administered by NEF, has committed $108 million to assist residents in the South and Midwest over the last 18 months of tornadoes and flooding. The additional $75 million will target areas of New York, New Jersey, Connecticut and Rhode Island damaged by Sandy, as MHProNews has been informed. When all $200 million is allocated, 1,500 housing units will have been developed along with the jobs created by the homes’ construction.

(Photo credit: Examiner)

Is the Worst Over?

September 21st, 2012 Comments off

The news-times says data from the Census Bureau shows 36.5 million people, 12 percent of the population, moved to a new home this year, up from a record low of 11.6 percent in 2011. The most mobile group, young men 25-29, are moving out of their parents’ home, either returning to school or feeling confident about their job prospects, even though the unemployment rate remains stubbornly stuck. Andrew Cherlin, a professor of sociology and public policy at Johns Hopkins University, says, “We may be seeing the beginning of the American family’s recovery from the Great Recession. It could be the modest number of new jobs or simply the belief that the worst is over,” he adds. As MHProNews has learned, the picture remains mixed, however: Homeownership dropped last year to its lowest rate in over a decade, 64.6 percent; more Americans are using food stamps than ever before; and data released this week by the Conference Board’s Index of Leading Economic Indicators, which forecasts future economic activity, dropped 0.1 percent in August, after rising 0.5 percent in July. Harvard University Economist Richard Freeman said the data points to “a fragile recovery.”

(Image credit: FotoSearch)

Economy Continues Sputtering Forward

August 31st, 2012 Comments off

AnchorageDailyNews tells MHProNews consumer spending in July rose 0.4 percent over June, the best rate in five months, following no change in June and a small decline in May. Retail spending offset weak manufacturing. Income grew in July 0.3 percent, the same for May and June, and people earned 0.3 percent more after taxes in July over June. Paul Dales, with Capital Economics, said the economy is slowly improving, but cautioned that higher gasoline prices and a drop in consumer confidence could slow consumer spending, which accounts for 70 percent of economic activity. Economists expect the government’s jobs report, set to be released Sept. 7, will show 118,000 new jobs were added in August, and that the unemployment rate held steady at 8.3 percent. Notwithstanding food and energy,  the Federal Reserve reports prices over the past year rose only 1.6 percent.

(Image credit: Wikipedia Commons)

Consumer Confidence Gains, but Slowly

July 31st, 2012 Comments off

The Olympian reports while the Consumer Confidence Index of The Conference Board increased for the first time in five months, from 62.7 in June to 65.9 this month, the index is well below 90, which indicates a healthy economy, a mark not seen since before the recession began in 2007. At its lowest point it dropped to 25.3 in Feb. of 2009. Based on a random survey of 500 respondents, consumer confidence matters because consumer spending accounts for 70 percent of U.S. economic activity. Lynn Franco, director of economic indicators at The Conference Board, says, “While consumers expressed greater optimism about short-term business and employment prospects, they have grown more pessimistic about their earnings. Given the current environment – in particular the weak labor market – consumer confidence is not likely to gain any significant momentum in the coming months.” MHProNews has learned the index remains at historically low levels.

(Image credit: TotalMortgage)

Q2 2012 has Few Economic Bright Spots

July 16th, 2012 Comments off

AnchorageDailyNews reports retail sales fell for the third consecutive month in June, the first time that has happened since the fall of 2008 at the height of the financial crisis. Sales of furnishings, appliances, garden and building supplies, and at department stores all declined, leading to an overall drop of 0.5 percent June over May. Although auto sales were up 22 percent over the same month last year, it was not enough to offset the drop in retail sales, which drives 70 percent of economic activity. The $0.50 a gallon drop in gasoline prices since April did not compensate for the lackluster job growth in the second quarter. Costco, Target, and Macy’s all reported less than expected revenues.

(Image credit: HousingWire)