Residential construction
New construction on housing units faded on a seasonally adjusted basis in October as a decline in starts of single-family homes offset an increase in starts of housing units in multi-family dwellings of five or more units.
Housing starts fell 3.1% m/m, seasonally adjusted, in October and were down 4.0% y/y. Starts on homes in multi-family dwellings of five or more units rose 9.8% m/m, but a 6.9% drop in the much larger category of single-family homes more than offset that strength. Single-family starts were down 0.5% y/y while multi-family starts were down 12.6%.
Permits authorized for future construction declined 0.6% m/m and 7.7% y/y. Single-family permits rose 0.5% m/m but were down 1.8% y/y. Multi-family permits declined 3.0% m/m and were down 20.9% y/y.
The backlog of homes under construction continued to dwindle as the number of homes under construction declined for the 11th straight month. Single-family homes under construction were stable as starts were roughly aligned with completions. On a y/y basis, single-family homes under construction are down 3.6%. However, multi-family homes under construction have fallen ever month for a full year and are down 19% over that period.
Sales of existing homes
In October, seasonally adjusted sales of existing single-family homes saw their largest – and only the second – increase since the spike in February. Sales increased 3.5% m/m and were up 4.1% y/y. The positive prior-year comparison was the first since June 2021.
“The worst of the downturn in home sales could be over, with increasing inventory leading to more transactions,” said Lawrence Yun, chief economist for the National Association of Realtors, in the news release announcing the data. “Additional job gains and continued economic growth appear assured, resulting in growing housing demand. However, for most first-time homebuyers, mortgage financing is critically important. While mortgage rates remain elevated, they are expected to stabilize.”
The inventory of existing single-family homes on the market at current sales rates has been at 4 months or higher for the past five months. Before June, that figure had not been higher than 4 months since May 2020. The number of homes on the market totaled 1.19 million, seasonally adjusted, which is the same as September and only slightly below the August level of 1.2 million – the most since September 2020.
Another hurdle for would-be homebuyers aside from inventory and mortgage rates is high home prices. After declining for three straight months, the median price of an existing single-family home sold basically stabilized, rising just 0.3% m/m. The median price of $412,200 was up 4.1% y/y. Although the median price is down from the all-time high of $432,900 in June it is still about 51% higher than it was in February 2020.
Trucking
The Federal Motor Carrier Safety Administration this week published a notice of proposed rulemaking (NPRM) that would clarify that freight brokers have a regulatory obligation to provide parties to freight transactions – i.e., carriers and shippers – key information upon request, including the compensation paid to the broker for services and the freight charges collected and paid to the carrier. The NPRM would require brokers to provide the records electronically within 48 hours of the request.
Current regulations provide for a “right to review” the records, but they do not specify how the documentation is to be provided nor the timeframe. Moreover, parties seeking the rulemaking had complained that brokers often insist that carriers waive their right to review as a condition of being tendered a load. FMCSA concluded that the current language did not prevent that practice, saying that its NPRM would reframe the duty as a regulatory requirement.
The incoming Trump administration has no obligation to advance the NPRM to a final rule, so the proposal’s fate is far from clear. The Trump administration might view the proposed regulation as an unwarranted intrusion into private entities’ business practices. On the other hand, one of the stakeholders that petitioned for the rulemaking, the Owner-Operator Independent Drivers Association, has numerous Republican allies in Congress.
Comments are due January 21, which is the day after President-elect Trump will be inaugurated. The Federal Register notice of the NPRM is available at https://www.federalregister.gov/d/2024-27115.
Spot metrics
Broker-posted spot rates in the Truckstop system either declined or barely rose during the week ended November 15 (week 46), depending on equipment type. Dry van and flatbed rates decreased, though by less than they had in the previous week. Refrigerated rates increased slightly.
All three equipment types lagged usual moves for a week 46, but some of that might be fuzziness as Thanksgiving approaches. Thanksgiving typically falls during week 47, but this year it falls in week 48. The result will be substantial distortion in spot metric comparisons versus the prior year over the next couple of weeks.
For more on week 46 spot metrics for truck freight, visit https://freight.ftrintel.com/spotmarketinsights.
Rail/Intermodal
For the week ended November 16, total rail traffic was down 1.3% with carloads down 4.3% and intermodal up 1.8%, according to data from the American Association of Railroads.
Intermodal traffic remains positive, but it posted a second consecutive week of significant moderation compared to its performance throughout the year. The moderation is once again due primarily to the effects of the Canadian port strikes on both the east and west coasts.
As in the previous week, some of the traffic bound for Canadian ports was diverted to U.S. ports but not enough o fully offset the disruptions. The strike officially ended last week, meaning that this week’s data should begin showing w/w improvements as ports and carriers work through the backlog.