It’s early, but the city of Portland’s moratorium on development fees appears to be moving some multifamily developers off the sidelines and into building, according to permitting data and interviews.

In fact, it led one developer to propose a new project. Joe Westerman on May 1 requested early assistance from Portland Permitting & Development for a four- to five-story mixed-use building with 158 apartments in 213,644 square feet at Northeast Sandy Boulevard and 52nd Avenue.

If the project were to advance, it would represent a rare boost of supply to Portland’s tight housing market.

“I’ve been building apartments in Porland for 30 years, and I kind of got away from it when working with the city got so unruly,” Westerman said.

So, what changed?

“Portland is incentivizing developers with not having to pay the system development charges,” he added. “It’s probably going to be $3 million that you don’t have to pay. That’s – that’s nice.”

System development charges fund city infrastructure through various city bureaus, but the fees have drawn blame for discouraging housing proposals by increasing costs.

SDCs average about $20,000 per unit; they can range from $15,000 to $35,000 per unit, according to a City Council document.

Only 818 market-rate housing units were produced in Portland in 2024 — the lowest rate in more than a decade. In response, the City Council last summer approved a moratorium on SDCs that will last until Sept. 30, 2028.

The development fee moratorium is helping keep projects alive, said Ezra Hammer, a land-use attorney at Ballard Spahr.

“For a pro forma that has seen compression over an entitlement period, the SDC waivers are helping with that compression,” he said.

Hammer said he’s also fielded increased interest from “out-of-town folks who are pleasantly surprised about the tonal shift we’re hearing.” That’s after Portland’s reputation soured amid pandemic shutdowns, protests and regulatory obstacles.

“The city appears to want to attract investment in multifamily housing,” Hammer said. “I haven’t seen those projects materialize yet, but it’s a big shift from the world we were in before where capital had absolutely no interest in Portland.”

Portland Permitting & Development is tracking an uptick in building permits issued since the fee moratorium began in August 2025. Some projects that had apparently stalled were given building permits.

As of Jan. 15, 265 new housing units complied with the program for a total of $6.68 million in SDC exemptions — an average of $25,221 per unit. An additional 207 units have had their permits issued and are on track to receive $4.17 million in development fee exemptions but have not yet completed compliance in the program, according to the agency. The city ordinance that created the exemptions requires new housing projects to pour a concrete foundation within 12 months of permits being issued.

PP&D is expected to present a full report on the program to the City Council after Aug. 15, when the exemptions will have been in place for a year.

“We see indicators that the SDC exemption is helping new housing units get developed,” PP&D spokesman Ken Ray stated in an email. “It is early in the program, and we expect we’ll have a clearer picture this fall after we’ve had a year’s worth of activity to review.”

The moratorium and builder-friendly vibes could even be enough to get someone like Westerman — a longtime Portland investor — off the sidelines. His JMW Properties owns four multifamily properties in Portland, one in Vancouver, Washington, and one in Medford. Westerman has brought on board Koble Creative to design the Sandy Boulevard project, which is named Rose City Mixed-Use in early planning documents.

“This could be a really amazing project,” Westerman said. “It has a beautiful southern exposure. You could have on the second floor an atrium, and … units on the inside. You could have fresh air in there; you could have skylights in there.”

Westerman said he wants to build relatively roomy studios and apartments with one or two bedrooms rather than the micro-units that some developers have built to boost rental rates per square foot.

Westerman owns the entire block, including the building at 5137 N.E. Sandy Blvd. that hosts the discount store Friday Deals. The larger building at 5201-5223 N.E. Sandy Blvd. includes G.O.A.T. Bar and Hollywood Fitness, a longtime neighborhood gym owned by George Camalli.

Westerman said he hopes Hollywood Fitness will be the anchor tenant in the new building, in a 10,000-square-foot storefront space. “I like that — having to deal with one tenant,” he said.

The project could also affect the Rose City Food Park. But the food carts may be able to move to the block’s west end, Westerman said.

Koble Creative previously designed Westerman’s Cedar Commons development in Medford.

“They’re a good local architect,” he said.

Westerman, a contractor, expects to perform the construction in-house.

A new outlook in the city government gained Westerman’s attention, he said, in contrast to what he considered an anti-developer stance when the permitting agency was overseen by former city commissioner Chloe Eudaly.

“The permits center became an area of ‘no,’ and I think that’s changing,” he said. “We are going to early assistance to find out all of the issues if there are issues, and then we’ll do a cost model and a pro forma model. And we’ll see if it papers out.”

Westerman also owns a large swath of land in Gateway that he’s so far been unable to redevelop. He also suggested he’d be happy to take on investors for the Sandy Boulevard development.

“Anyone who would like a partnership, give me a call,” he said.

Portland needs more housing, and it also needs some good news, Westerman said.

“It’s easy for me not to be happy with Portland,” he said. “But the bottom line: I would like to be part of the solution.”

The post Portland’s suspension of fees spurs mixed-use development appeared first on Daily Journal of Commerce.

The average rate for a 30-year U.S. mortgage edged higher for the third week in a row, though it remains close to its low point in 2025.

The average long-term mortgage rate ticked up to 6.26 percent last week from 6.24 percent the week before, mortgage buyer Freddie Mac stated. A year ago, the rate averaged 6.84 percent.

Four weeks ago, the average rate was at 6.17 percent — the lowest level in more than a year.

Borrowing costs for 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also inched up last week. The rate averaged 5.54 percent, up from 5.49 percent the week before. A year ago, it was 6.02 percent, according to Freddie Mac.

When mortgage rates rise, they reduce homebuyers‘ purchasing power. The average rate for a 30-year mortgage has been stuck above 6 percent since September 2022, the year mortgage rates began climbing from historic lows.

That’s helped kept sales of previously occupied U.S. homes stuck at around a 4 million annual pace going back to 2023. Historically, sales have typically hovered around 5.2 million a year.

While sales have been sluggish this year, they received a boost this fall as mortgage rates eased. The average rate for a 30-year home loan has stayed below 6.4 percent since early September. Last month, home sales accelerated to their fastest pace since February.

Mortgage rates are influenced by several factors, from the Federal Reserve‘s interest rate policy decisions to bond market investors’ expectations for the economy and inflation. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide for pricing home loans.

The 10-year yield was at 4.10 percent at midday on Nov. 20. That’s down slightly from two weeks ago, but up from around 3.95 percent on Oct. 22.

Mortgage rates began declining this past summer ahead of the Federal Reserve’s decision in September to cut its main interest rate for the first time in a year amid signs the labor market was slowing. The Fed lowered its key interest rate again last month, although Fed Chair Jerome Powell cautioned that further rate cuts weren’t guaranteed.

Wall Street traders have reduced their bets that the Fed will cut its main interest rate at its next meeting in December, now giving it a roughly 44 percent probability, according to data from CME Group. That’s down from nearly 70 percent a few weeks ago, but better than the 30 percent chance before the release of the delayed September jobs report.

The central bank doesn’t set mortgage rates, and even when it cuts its short-term rates that doesn’t necessarily mean rates on home loans will necessarily decline.

Last fall, after the Fed cut its rate for the first time in more than four years, mortgage rates marched higher, eventually reaching just above 7 percent in January this year. At that time, the 10-year Treasury yield was climbing toward 5 percent.

Recent forecasts by economists at the National Association of Realtors and First American call for the average rate for a 30-year mortgage to drop to around 6 percent next year.

The post Mortgage rates inch higher but remain near 2025 low appeared first on Daily Journal of Commerce.

LOS ANGELES — For years, skyrocketing home values and a modest market inventory gave homeowners the upper hand in transactions. That’s no longer a given.

Across the country, it’s getting tougher for sellers to drive a hard bargain. A dearth of home shoppers who can afford to buy and uncertainty about the outlook for the economy, jobs and mortgage rates is putting pressure on sellers to give ground at the negotiating table.

In some markets, mainly in the South and West, homeowners eager to sell are more likely to give buyers a better deal. This could include a lower price, up-front money to reduce the buyer’s mortgage rate, and funds for closing costs and any repairs or improvements that may pop up after the home inspection.

The reasons: Would-be buyers balk at what they view as unreasonable asking prices, while at the same time new construction is giving buyers more options and putting pressure on sellers to make their homes more appealing.

As a result, while the national median home listing price rose slightly in July, some metro areas saw a decline, signaling a reversal in the power dynamic between buyers and sellers. It’s rare to see the type of eye-popping bidding wars that boosted home values by roughly 50 percent nationally earlier this decade. Low-ball offers are more common.

Nevertheless, the housing market remains mired in a slump. Sales of previously occupied U.S. homes are running about 1.3 percent below where they were through the first seven months of last year, when they sank to their lowest level in nearly 30 years.

The national median home listing price rose slightly in July from a year earlier to $439,450, according to Realtor.com. The real estate listing company found the most a homebuyer who earns the median U.S. household income can afford to spend on a home is $298,000. The analysis assumes a 20 percent down payment and a 30-year mortgage at a fixed rate of 6.74 percent. By those criteria, 7 out of 10 home shoppers are priced out of the market.

The housing market has been in a rut since 2022, when mortgage rates began climbing from historic lows. The number of homes available for sale sank while prices kept rising.

Nationally, more homes are going on sale and remaining unsold longer because buyers have been unwilling or unable to make a deal. Active listings — a tally that encompasses all homes on the market except those pending a finalized sale — increased in July for the 21st month in a row, climbing nearly 25 percent from a year earlier, according to Realtor.com.

The inventory of homes for sale across the U.S. has increased gradually as the market has slowed and is now at a level where supply and demand are more balanced. But in states like Texas and Florida, the number of homes on the market has climbed sharply, partly because those states are hotbeds of new home construction.

Home shoppers may now have more leverage relative to sellers in the South and West, where home inventory has risen in the single digits, compared to pre-pandemic levels. Conditions are tougher in markets in the Midwest and Northeast, where the supply of homes remains 40 percent and 50 percent below pre-pandemic levels, respectively, according to Realtor.com.

After roughly two months on the market and three open houses, Doug McCormick’s home has yet to receive a single offer.

The retired business owner and his wife initially listed the 4-bedroom, 4.5-bath house located in Evergreen, a mountain community about 30 miles west of Denver, for $1.3 million. They lowered their asking price to about $1.28 million. That, too, failed to bring in a buyer.

McCormick, 80, says he’s hoping mortgage rates ease a bit and bring out more buyers. But he’s also considering just renting the property.

“That’s something that’s kind of in the back of my mind,” he said. “I keep reminding myself you only need one buyer.”

McCormick’s situation is not unique. As demand has slowed, more sellers have resorted to lowering their initial asking price — often multiple times — to no avail.

“Even though we are seeing a substantial amount of price reductions, sometimes it’s not enough to move the home; it’s still sitting,” said Annie Foushee, an agent with Redfin in Denver.

The median home listing price in Austin fell 4.9 percent in July from a year earlier, while in Miami it dropped 4.7 percent. Among other metro areas that had sharp drops in their listing price were: Chicago (4.4 percent), Los Angeles (4.2 percent) and Denver (4 percent).

In markets where buyers now have the upper hand, sellers who can afford to wait are often opting to pull their listing rather than be pressured into drastically reducing the price.

Tammy Tullis put her home in the Miami suburb of South Miami on the market in June. But the 4-bedroom, 3.5-bath house didn’t receive many offers initially, so she dropped her $2.8 million asking price by $100,000. That helped drive turnout during an open house, but she received only low-ball offers.

“They were like $400,000 to $500,000 off the mark,” said Tullis, 51.

Last month, the finance consultant took the listing down. She may relist it soon.

“I want to sell, but I’m not in a rush-rush,” Tullis said.

The Trump administration has pushed the Federal Reserve to lower interest rates, saying it would help the housing market. But homebuyers – and politicians – should keep in mind that the central bank directly influences only short-term rates, while most mortgages are based on the yield of the 10-year Treasury.

And while lower mortgage rates would boost home shoppers’ purchasing power, they also could bring in more buyers, giving sellers less incentive to keep lowering prices.

Economists generally expect the average rate for a 30-year mortgage to remain near the mid-6-percent range this year.

The post Single-family market shifts as sellers lose bargaining power appeared first on Daily Journal of Commerce.

The average rate for a 30-year U.S. mortgage has fallen to its lowest level in nearly 10 months, giving prospective homebuyers a sorely needed boost in purchasing power that could help inject life into a stagnant housing market.

The long-term rate dropped from 6.63 percent to 6.58 percent last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.49 percent.

Borrowing costs for 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also fell. The average rate dropped from 5.75 percent to 5.71 percent last week. A year ago, it was 5.66 percent, Freddie Mac said.

Elevated mortgage rates have helped keep the U.S. housing market in a sales slump since early 2022, when rates started to climb from the rock-bottom lows they reached during the pandemic. Home sales sank last year to their lowest level in nearly 30 years.

This is the fourth week in a row that rates have come down. The average rate for a 30-year mortgage is now at its lowest level since Oct. 24, when it averaged 6.54 percent.

Mortgage rates are influenced by several factors, such as the Federal Reserve‘s interest rate policy decisions and bond market investors’ expectations for the economy and inflation.

The main barometer is the 10-year Treasury yield, which lenders use as a guide to price home loans. The yield was at 4.29 percent at midday on Thursday, up slightly from 4.24 percent late Wednesday.

The yield has come down the last couple of weeks after weaker-than-expected July U.S. job market data fueled speculation that the Fed will cut its main short-term interest rate next month.

A Fed rate cut could give the job market and overall economy a boost, but it could also fuel inflation just as President Trump’s tariff policies risk raising prices for U.S. consumers.

Meanwhile, a new inflation report Thursday showed prices at the U.S. wholesale level jumped 3.3 percent last month from a year earlier. That was well above the 2.5 percent rate that economists had forecast, and it could hint at higher inflation ahead.

Earlier this week, the Labor Department said consumer prices in July, though unchanged from June, rose 2.7 percent from a year earlier.

Higher inflation could push bond yields higher, driving mortgage rates upward in turn, even if the Fed cuts its key rate.

Economists generally expect the average rate for a 30-year mortgage to remain above 6 percent this year. Recent forecasts by Realtor.com and Fannie Mae project the average rate will ease to around 6.4 percent by the end of this year.

That may not be low enough to make a difference. While trends like declining home listing prices and more properties on the market in the Sunbelt and West now favor buyers, affordability remains a major hurdle for many aspiring homeowners.

Home price growth has slowed nationally, but the median sales price of a previously occupied U.S. home still climbed to an all-time high of $435,300 in June.

“Homebuyers who have been relegated to the sidelines by high financing costs got some encouragement in the past two weeks, but it remains to be seen if it’s enough to get more of them back in the game,” said Joel Berner, senior economist at Realtor.com.

The recent drop in mortgage rates has spurred many homeowners to refinance, however.

Mortgage applications jumped 10.9 percent last week from the previous week as rates eased, boosted by homeowners seeking to refinance, according to the Mortgage Bankers Association.

Home loan refinance applications made up nearly 47 percent of all mortgage applications. Refi loan applications jumped 23 percent from a week earlier – the strongest showing since April.

Meanwhile, applications for adjustable-rate mortgages, or ARMs, soared 25 percent to their highest level since 2022, MBA said.

Many homeowners aren’t waiting for rates to ease further before refinancing. Cash-out home refinancing activity surged to a nearly three-year high in the April-June quarter, as homeowners tapped some of the equity gains built up after years of soaring home prices.

The post Mortgage rates hit 10-month low, helping prospective buyers appeared first on Daily Journal of Commerce.

LOS ANGELES — Real estate investors are snapping up a bigger share of U.S. homes on the market as rising prices and stubbornly high borrowing costs freeze out many other would-be homebuyers.

Nearly 27 percent of all homes sold in the first three months of the year were bought by investors – the highest share in at least five years, according to a report by real estate data provider BatchData. Between 2020 and 2023, the share of homes bought by investors averaged 18.5 percent.

All told, investors bought 265,000 homes in the January-March quarter. That was an increase of 1.2 percent from the same period a year earlier, the firm said.

Despite the modest annual increase, the rise in the share of investor home purchases is more a reflection of how much the housing market has slowed as traditional buyers face growing affordability constraints, according to BatchData.

The U.S. housing market has been in a sales slump since early 2022, when mortgage rates began to climb from pandemic-era lows. Home sales fell last year to their lowest level in nearly 30 years.

They’ve remained sluggish so far this year, as many prospective homebuyers have been discouraged by elevated mortgage rates and home prices that have kept climbing, though more slowly.

As home sales have slowed, properties are taking longer to sell. That’s led to a sharply higher inventory of homes on the market, benefiting investors and other home shoppers who can afford to bypass current mortgage rates by paying in cash or tapping home equity gains.

“As traditional buyers struggle with affordability, investors with cash and financing advantages are stepping in to maintain transaction volume,” according to the report.

BatchData analyzes U.S. home sales records to determine which properties were purchased by investors. These could include vacation homes or rentals, but not a homebuyer’s primary residence.

Investors bought 1.2 million homes in 2024, up from an average of 1.1 million homes per year going back to 2020, according to BatchData.

Even so, investor-owned homes account for roughly 20 percent of the nation’s 86 million single-family homes, the firm said.

Of those, mom-and-pop investors, or those who own between 1 and 5 homes, account for 85 percent of all investor-owned residential properties, while those with between 6 and 10 properties account for another 5 percent.

Institutional investors that own 1,000 or more homes account for only about 2.2 percent of all investor-owned homes, the firm said.

And that number could get smaller, amid signs that large institutional investors are scaling back home purchases.

Out of a group of eight of the biggest companies that own and lease single-family houses, including Invitation Homes and American Homes 4 Rent, six sold more homes in the second quarter than they bought, according to data from Parcl Labs.

The post Investors increasing their ownership of U.S. homes appeared first on Daily Journal of Commerce.

Sales of previously occupied U.S. homes fell in April, as elevated mortgage rates and rising prices discouraged prospective homebuyers during what’s traditionally the busiest time of the year for the housing market.

Existing home sales dropped 0.5 percent last month, from March, to a seasonally adjusted annual rate of 4 million units, the National Association of Realtors said Thursday. The decline marks the slowest sales pace for the month of April going back to 2009 in the wake of the U.S. housing crisis. March’s sales pace was also that month’s slowest going back to 2009.

Sales fell 2 percent compared with April last year. The latest home sales fell slightly short of the 4.10 million pace economists were expecting, according to FactSet.

Home prices increased on an annual basis for the 22nd consecutive month, although at the slowest rate since July 2023. The national median sales price rose 1.8 percent in April from a year earlier to $414,000, an all-time high for the month.

“The affordability condition is clearly hurting the market, particularly higher mortgage rates,” said Lawrence Yun, NAR‘s chief economist.

For the past three years, sales of previously occupied U.S. homes have been at about 75 percent of what they were before the pandemic. The market slump began in early 2022, when mortgage rates began to climb from pandemic-era lows. Sales of homes fell last year to their lowest level in nearly 30 years.

The average rate for a 30-year mortgage has remained relatively close to its high so far this year of just above 7 percent, which it set in mid-January, according to mortgage buyer Freddie Mac. The average rate’s low point so far was five weeks ago, when it briefly dropped to 6.62 percent. Last week, it averaged 6.86 percent, its highest level since mid-February.

Homes purchased last month likely went under contract in March or April, when the average rate for a 30-year mortgage ranged from 6.62 to 6.83 percent.

High mortgage rates, which can add hundreds of dollars per month in costs for borrowers, have frozen out many would-be homebuyers struggling to find a home they can afford.

Homeownership is out of reach for many Americans after years of surging home prices. The median U.S. home sales price has jumped 53 percent over the past six years.

Home shoppers who can afford to buy at current mortgage rates are benefiting from more homes on the market when compared with recent years.

There were 1.45 million unsold homes at the end of last month, a 9 percent increase from March, and 20.8 percent more than April last year, NAR said. That’s the most homes on the market since September 2020, but still significantly fewer than the roughly 2 million homes for sale that was typical before the pandemic.

The latest unsold inventory snapshot translates to a 4.4-month supply at the current sales pace, up from a 3.5-month pace at the end of April last year. Traditionally, a supply of five to six months is considered a balanced market between buyers and sellers.

One reason the inventory of homes for sale has been rising is that properties are taking longer to sell. Homes typically remained on the market for 29 days last month before selling, up from 26 days in April last year, NAR said.

The wider selection of homes on the market likely helped boost sales among first-time homebuyers. They accounted for 34 percent of sales last month – the highest level since July 2020 but still down from the historical norm of 40 percent.

Home shoppers who can afford to sidestep mortgage rates and pay all cash for a home accounted for 25 percent of sales last month, down from 28 percent a year earlier. Investors, who account for many all-cash purchases, made up 15 percent of home sales last month, down from 16 percent a year earlier, NAR said.

The post U.S. home sales fall in April as mortgage rates stay high appeared first on Daily Journal of Commerce.

By ALEX VEIGA
AP Business Writer

LOS ANGELES (AP) — The red-hot U.S. housing market is paying off for many homeowners, even those who aren’t looking to sell their home.

On average, homes with a mortgage gained $26,300 in equity in the last three months of 2020 versus a year earlier, according to real estate information company CoreLogic. That average gain is the highest since 2013, the firm said.

CoreLogic said homes with a mortgage account for about 62 percent of all U.S. properties. Taken together, the home equity for those properties surged to more than $1.5 trillion, an increase of 16.2 percent from a year earlier.

The surge in homeowners’ equity can potentially make a positive impact on borrowers’ finances; for one thing, it creates a buffer against potential financial hardship, such as job loss. And homeowners could opt to put some of the gains to use, giving a boost to the economy.

“In our view, these strong equity gains are a clear positive for homeowner balance sheets, as well as for overall additional consumer spending, should homeowners be desirous of tapping a portion of their equity gains,” Jonathan Woloshin, a real estate and lodging analyst at UBS, wrote in a research note last week.

Rising home values and low mortgage rates spurred many U.S. homeowners to refinance and cash in some of the equity in their home last year. Homeowners pulled out $152.7 billion in equity, an increase of 41.7 percent from 2019 and the highest refinancing cash-out dollar amount since 2007, according to mortgage buyer Freddie Mac.

Homeowners also tapped into the equity in their home via a home equity line of credit, or HELOC. The volume of HELOCs more than doubled in 2020 from a year earlier to $74.9 billion.

Low mortgage rates, strong demand and a record low inventory of homes for sale nationwide have fueled home sales and pushed home prices higher since last summer.

Sales of previously occupied U.S. homes climbed 5.6 percent in 2020 from a year earlier to 5.64 million, the highest level since 2006 at the height of the housing boom, according to the National Association of Realtors. The national median home sales price jumped 12.9 percent to $309,800.

The strong demand for homes continued in January, with sales ticking up 0.6 percent from December and almost 24 percent from a year earlier. By the end of January, however, the supply of homes on the market nationally was down to a record-low 1.04 million units. That amounts to a 1.9 months’ supply. A balanced housing market tends to have a 6-month supply. The Realtors group issues its February home sales data next week.

When home equity rises, it reduces the risk that a homeowner with a mortgage will end up “underwater” on their loan, meaning they owe more on their mortgage than their home is worth. That can happen when a home’s value declines, or when the size of the mortgage increases, say when someone takes out a home equity loan.

Homes in California, Idaho and Washington saw among the biggest average increases in annual equity gains in the fourth quarter: $54,500 in California, $48,500 in Idaho and $47,000 in Washington state, CoreLogic said.

Even a robust housing market with rising prices can’t limit the risk of a homeowner ending up underwater on their home loan entirely.

In the fourth quarter, some 410,000 U.S. residential properties were underwater on their mortgage, according to CoreLogic. That’s a 21 percent decline from the same period in 2019, when 1.9 million homes, or 3.6 percent of all properties with a mortgage, were in negative equity, the firm said.

Miami, Miami Beach and the suburb of Kendall, Florida, had an average negative home equity share that was among the biggest nationally at 6.3 percent.

The underwater mortgages at the end of December represent roughly $280.2 billion in mortgage debt, down 2.6 percent from a year earlier, CoreLogic reported.

When a mortgage is underwater, the homeowner often can’t qualify for mortgage refinancing and has little recourse but to continue making payments in hopes the property eventually regains its value.

Many economists expect home prices to continue rising this year, which bodes well for homeowners with underwater mortgages. Should U.S. home prices increase by 5 percent, then some 216,000 homes would regain equity, CoreLogic said. If the reverse happens, nearly 300,000 homes would slip into negative equity, the firm said.

The post Hot housing market frees up cash for home improvements appeared first on Daily Journal of Commerce.

Demographic gaps are a potent force in the construction industry’s labor shortage and the limited supply of homebuyers, economists said during a recent event forecasting the future of housing.

The industry has added 18 million workers age 55 or older since 2000. However, only 1 million workers younger than 55 have joined the industry during the same span.

“This is a generational challenge,” said Robert Dietz, chief economist of the National Association of Home Builders. “We’ve got to find ways to build more with less.”

The demographic bulge is an echo of the post-World War II baby boom, Dietz said. Millennials also represent a large generation, while Generation Xers are few in number. The same demographic trends are playing out around the world, tempering growth in many nations, he said.

Dietz’s comments came Friday during the Home Builders Association of Metropolitan Portland‘s 2020 Housing Forecast, at the Oregon Convention Center. Speakers offered a snapshot of housing construction locally and nationally. Generally, contractors have a backlog of work with the economic expansion now 10.5 years old – a lengthy run that is unprecedented in American history.

The economists did point to some troubling trends. Job growth, for one, is slowing.

“It’s hard to have employment growth when there’s nobody to hire,” said Jerry Johnson, principal of Johnson Economics in Portland. “You’re at the shallow end of the employment pool.”

Still, the panel of speakers agreed that the economy has some legs.

“We feel the next 18 months should be pretty good,” said Doug Wirges, CEO of Parr Lumber Co., which sponsored the event.

Wirges drew laughs by comparing a recession to a kidney stone: It will pass, it will hurt, and liquidity can only help you.

Susan Brown, senior vice president for home lending at Umpqua Bank, said financing of alternative dwelling units, or ADUs, is an opportunity for the industry that the bank was early to jump on.

Johnson pointed to Portland’s Residential Infill Project, which would allow for construction of fourplexes on single-family properties. The City Council is due to consider the zoning changes in December and January.

“Somebody is going to be building these to sell to investors,” he said.

The discussion regarding “missing middle” housing is somewhat misleading, Dietz said. The greatest need, he added, is for small, single-family detached homes.

The economists also said there’s an opportunity for growth in “panelized” or otherwise prefabricated homes, which now make up less than 3 percent of single-family home starts.

“We’re seeing discussion – it’s not showing up in the data,” Dietz said.

The battle for homebuilders will be to build the types of smaller, more affordable homes that millennials want and can buy, Johnson said.

“That’s the future of the market,” he said. “End of day, we need to find a way to deliver the product that’s suitable to them.”

Johnson also signaled a warning sign for Realtors, whose traditional role as matchmaker in residential sales has been weakened by a wealth of online information, services and apps that can match buyers and sellers at lower cost.

“The Realtors are hanging on, but their rationale is going to get weaker,” he said.

The post Economists: smaller housing needed for new generation appeared first on Daily Journal of Commerce.

By JOSH BOAK
AP Economics Writer

WASHINGTON (AP) — The number of homes being built in the U.S. increased by a slight 1.5 percent in October, but in a troubling sign, groundbreakings for single-family houses became less common.

The Commerce Department said on Tuesday housing starts rose to a seasonally adjusted annual rate of 1.23 million, up from 1.21 million in September. The gains came entirely from apartments. The number of starts for single-family houses slipped by 1.8 percent last month.

The housing market has stumbled in recent months as mortgage rates have climbed, putting the ability to buy a home or move up to a nicer property out of reach for more Americans. A sharp increase in mortgage rates has led to a marked decline in home construction since May, and the number of groundbreakings taking place has fallen by 2.6 percent in the past 12 months.

The average 30-year fixed-rate mortgage has gone up a full percentage point in the past year, reaching 4.94 percent, according to the mortgage buyer Freddie Mac. This benchmark rate is at its highest average since February 2011.

The number of permits being issued, an indicator of future activity, declined by 0.6 percent to hit an annual rate of 1.26 million.

This pullback in construction has occurred as sales of new homes have begun to stall.

The number of new homes being bought has plummeted in the past four months, showing a drop of 5.5 percent in September, according to a Commerce Department report last month. The annual rate of home sales has declined by 15.3 percent since May, marking a striking reversal from the increase seen during the first five months of 2018.

The post US home construction rose 1.5 percent in October appeared first on Daily Journal of Commerce.