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47 » VISIT US ONLINE @ DSNEWS.COM SINGLE-FAMILY, OVERALL CONSTRUCTION SPENDING ON UPTICK Residential construction spending was up nearly 2 percent in February, hitting a seasonally adjusted total of $490.9 billion for the month. As a segment, single-family construction spending increased too, jumping 1.2 percent over the month and 3.4 percent over the year. According to recent data from the U.S. Census Bureau, residential construction rose from $482.2 billion in January to $490.9 billion in February. One year earlier, residential construction was at $462.4 billion—a difference of more than 6 percent. Single-family construction spending rose from $254.4 billion in January to $257.5 billion in February. In February 2016, single-family spending was at just $248.9 billion, marking a 3.4 percent jump over the year. Spending on multifamily construction also rose, jumping from $63.2 billion in January to $64.4 billion in February. ese numbers reflect a 2 percent rise for the month and a 10.6 percent rise for the year. According to the National Association of Home Builders (NAHB), this is a "record-breaking pace." Multifamily construction has been on the steady incline since 2010, the NAHB stated in an Eye on Housing blog post. Single-family construction spending is catching up, the post said, but at a slower pace. Census data showed that in total, construction spending for the month of February was $1,192.8 billion—nearly 1 percent higher than in January and 3 percent higher than a year previous. e first two months of 2017 marked a 3 percent jump since the same period of 2016, the Census report stated. According to FX Street writer Mike Shedlock, though the numbers are up, they don't quite represent construction growth. "Construction spending, up 0.8 percent in February," he wrote, "was a bit weaker than the Bloomberg Econoday Consensus estimate of 1.0 percent. However, the Census Department revised January from -1.0 percent to -0.4 percent, so the report was a bit stronger than it appears on the surface." In addition to jumps in both single-family and multifamily construction, the NAHB stated that spending on home improvements was up too, rising 2.7 percent over January and nearly 10 percent over the year. HOME PRICES WON'T DROP ANYTIME SOON Home prices are up, and that's not likely to change anytime soon, at least according to a recent Housing and Mortgage Market Review released by Arch MI. e report, which presents a state- and metro-level Arch MI Risk Index based on economic and housing market data, showed the likelihood of overall housing price decreases across all U.S. states and major cities at just 4 percent over the next two years. Last year, likelihood of pricing declines was 5 percent, and two years ago, it was at 8 percent. e Risk Index showed risk for pricing drops was relatively stable across the country, with only minor changes in some of the heavy coal-, oil-, and gas-producing regions. "e vast majority of housing markets across the nation remain healthy and are projected to stay that way through 2018," said Dr. Ralph G. DeFranco, Global Chief Economist for Mortgage Services of Arch Capital Services Inc. "Looking back at 2016, home prices grew 6 percent and rose in all 50 states." According to the report, no single state had more than a 50 percent chance of housing price drops over the next two years. is means home price growth will likely continue—and on a sweeping scale. "is year, conditions are in place for home prices to grow faster than incomes as a result of a tightening job market, still relatively low interest rates, tight supply, and an overall shortage of housing," DeFranco said. If pricing declines do happen, they're most likely in North Dakota, which had a 38 percent change of declines, Wyoming (36 percent), and Alaska (31 percent). All three are currently plagued with weak employment and low home sales, the report stated. At a metro level, areas most likely to seeing price drops were Miami and West Palm Beach, Florida; Baton Rouge and New Orleans, Louisiana; Albuquerque, New Mexico; Oklahoma City and Tulsa, Oklahoma; Houston, Texas; Birmingham, Alabama; and Little Rock, Arkansas. Oklahoma City has the highest chance with 21 percent. e report also included a section on millennials, particularly whether they're really flocking to more urban areas like everyone seems to assume. "It turns out that the percentages of millennials choosing to live in cities, suburbs, and rural areas are about the same as for the overall population," the report stated. "e main obstacle to urban living for this group is likely the cost—few people starting their careers can afford to live in close-in areas where housing costs have been rising fast for decades."

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