Land, Labor, and Lumber: The Current State of Residential Construction

CoreLogic and NAHB Partner to Foster Innovative Conversation on Housing Supply

By Russell McIntyre Government, Housing Policy

On December 12, CoreLogic partnered with the National Association of Home Builders (NAHB) to host an exclusive industry roundtable, “Land, Labor, and Lumber: The Current State of Residential Construction.” This conversation is the latest installment in our ongoing roundtable series, ‘CoreLogic Connects’ a collaboration between CoreLogic Office of the Chief Economist, CoreLogic Government Solutions, and CoreLogic Government and Industry Relations.

Land Labor Lumber

Convened in our nation’s capital, the series focuses on the relationship between current federal policy and the latest economic data, using unrivaled analytical capabilities from CoreLogic to identify the impacts of recent legislation and project the path forward. This iteration specifically addressed supply-side issues affecting the housing industry, with a packed roundtable audience that included attendees from numerous executive branch agencies, industry trade associations, academic think tanks, and policy analysts convening to discuss the impacts that recent legislation and rulemaking have had on the housing and mortgage markets.

The morning began with a presentation from CoreLogic Chief Economist Frank Nothaft, who provided a macroeconomic overview of the current housing and mortgage markets, identifying current trends amongst interest rates and the national GDP, and forecasting the longevity of our current economic expansion. Dr. Nothaft also identified several potential pain points that could hamper economic growth in coming years, including inflationary risks, Federal Reserve monetary policy, and the fixed-rate mortgage market.

Land Labor Lumber

Following this macroeconomic presentation, NAHB Chief Economist Robert Dietz outlined many of the specific supply-side issues facing home builders across the country.  He began by addressing affordability concerns, noting that the NAHB’s Affordability Measure currently sits at a 10-year low, much of which can be attributed to increased prices for construction materials, the current state of the labor market, and higher regulatory costs for homebuilders. Dr. Dietz concluded his presentation by addressing specific sub-markets within the industry – including townhomes, modular homes, and multi-family construction – and forecasting that the size of new homes will continue to shrink over coming years.

Following a short break, the roundtable convened to discuss many of the issues affecting supply that had just been identified by Drs. Nothaft and Dietz. The conversation included a robust discussion on affordability issues, including the disparities between housing costs and median incomes and the effects of building standards on new development, as well as a discussion on the role that state and local governments play in regulating land and the burdens that are often placed on home builders. 

Land Labor Lumber

The roundtable wrapped up with a forward-looking discussion on potential supply-side solutions that could meet today’s housing needs. Attendees addressed numerous prospects, including engagement with local officials, a focus on housing that is both equitable and fair, and the use of opportunity zones to invest in low-income communities. These ideas were summed up in closing remarks from CoreLogic Global Head of Public Policy Stuart Pratt, who reiterated a few of the morning’s many highlights and encouraged attendees to keep advancing the conversation as the calendar turns to 2019, a new Congress is seated, and the housing market continues to adapt.   

For more information on the ‘CoreLogic Connects’ roundtable series, contact Russell McIntyre at rmcintyre@corelogic.com.

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