NAHB chief economist discusses housing market outlook
Chief Economist Dr. Robert Dietz discussed the housing market outlook at the Association Management Conference attended by home builders association staff across the nation in August. HBA of F-M CEO Bryce Johnson and Executive Vice President Krista Mund were there.
Here is a brief synopsis of his report:
Despite a recent decline in housing due to rising long-term interest rates, the forecast for single-family home starts remains somewhat uncertain. In 2023, there's a predicted 11% decline, putting it at around 900,000 starts, which falls short of the 1.1 million needed to meet population growth and other demands.
This decline is attributed to rising long-term interest rates. Some private data providers have more optimistic forecasts, but the recent interest rate increase has led to a more conservative outlook. The years 2024-2025 are expected to see a rebound.
He also highlighted the top ten markets for single-family home production, with Houston and Dallas leading. The South dominates in terms of production volume.
Homeownership rates are a concern, currently at 66%, showing signs of weakness. Housing affordability challenges are contributing to a 20-year low in homeownership rates. The decline is expected to be a significant issue for policymakers.
Multifamily housing production has been strong, with a shift towards suburban areas. However, multifamily permits are now declining, posing a potential oversupply risk.
Demographics play a crucial role, with millennials driving housing demand. By 2024, interest rates are expected to normalize around 6%, and single-family home building will expand, despite challenges like lumber costs.
In summary, Dietz discussed housing market challenges, including rising interest rates, homeownership rates, and multifamily production. Demographics and policy will be key factors in shaping the housing market in the coming years.
Minnesota laws in effect that may impact employers:
1. Complete ban on noncompete agreements and restrictive franchise agreements after July 1, 2023.
2. Captive audience ban- an employer cannot require an employee to sit in on meetings regarding political and or/religious matters. In effect: Aug. 1, 2023.
3. When hiring, an employer cannot inquire about previous salary.
For a more comprehensive list, view a timeline here.
View OECS' Webinar: The Impact of Legalized Marijuana & THC Edibles on Employer Drug Testing
In case you missed the webinar, OSHA + Environmental Compliance Systems (OECS) has provided a recording of their webinar that went over what employers and employees can expect regarding drug testing in Minnesota now that cannabis is a legalized substance.
Click here to view.
If you have questions after viewing, please reach out to Melissa Olheiser, OHST, OECS Regional Manager.
Minnesota Department of Health (MDH) Renovate, Repair, and Paint program
The MDH is proposing changes to the RRP rule, which governs lead in pre-1978 residences and facilities with children.
The new rules would allow Minnesota to become a state authorized by the federal government to administer Environmental Protection Agency regulations. MDH is considering rules that regulate and prescribe:
For additional information, click here.
If you have comments or questions, submit them to the department via this form.
NAHB disappointed in Final WOTUS Rule
The Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers issues a revised final waters of the United States rule on Aug. 29.
NAHB Chairman Alicia Huey's response highlighted continued uncertainty in the rule, including the lack of a definition of a "relatively permanent" waterbody. This continues to adversely impacts housing affordability.
Read Chairman Huey's full statement here.
Further details on the rule are here.