Tuesday, October 20, 2015

Bad News for Modular Industry Inside the Good News of New Home Starts

United States homebuilders are feeling more optimistic about the housing market, lifting their confidence this month to the highest level in 10 years.

The National Association of Home Builders/Wells Fargo builder sentiment index released on Monday rose this month to 64 points, up from 61 in September. The last time the reading was higher was October 2005, at 68 points.

Readings above 50 indicate more builders view sales conditions as good rather than poor. The index has been consistently above 50 since July last year.

Builders’ improved optimism bodes well for a pickup in new home construction, which could help the overall economy. The supply of new homes has been scarce, so greater construction could result in more sales.

Healthy hiring and smaller price increases for new homes have begun pushing up sales, which were crippled during the financial crisis and recovered slowly even after the downturn ended in 2009. 

Sales of new homes have soared nearly 22 percent in the past year. They hit a seasonally adjusted annual rate of 552,000 homes in August, the strongest pace since February 2008. Sales data for September is due out next week.

"We'll be Back!"
Based on that seasonally adjusted annual rate, modular homes with their 1.5% market share, produced only 8,280 new single family homes instead of the 16,000+ homes we thought we were producing at a 3% share.

Where should we point the finger at for this dramatic drop?

1 comment:

Unknown said...

It is people like these "red shirts" that make it tough for modular construction to gain traction. http://www.fort-myers-beach-observer.com/page/content.detail/id/528305/Council-takes-no-action-on-modular-homes.html?nav=5064 absolutely ridiculous. I have seen the most beautiful modular homes that would undoubtedly make these dissenters think twice!