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Texas manufactured housing hits stride as broader industry strugglesTexas manufactured housing hits stride as broader industry struggles2023-06-07T05:00:00Z

COLLEGE STATION, Tex. (Texas Real Estate Research Center) – In contrast to Texas’ manufacturing industry as a whole, the state’s housing manufacturers surged with confidence in May, according to the latest Texas Manufactured Housing Survey (TMHS). The business-activity and company-outlook indices increased for the fourth consecutive month to their highest levels since 2021.

New orders and production continued to rebound after last year’s correction.

“After a productive spring season, housing manufacturers expressed broad-based optimism for the second half of 2023,” said Wesley Miller, senior research associate at the Texas Real Estate Research Center (TRERC). “This sentiment stands out against other manufacturing subsectors, where faltering orders and activity have forced a more cautionary tone, according to the Dallas Federal Reserve’s Texas Manufacturing Outlook Survey.”

“Higher interest rates impact industries differently,” explained Dr. Harold Hunt, senior research economist at the TRERC. “For example, higher mortgage rates reduce housing affordability, and some prospective buyers leave the site-built market and enter the manufactured-housing sphere.”

In addition to the wave of new orders for manufactured homes, May marked the first uptick in sale prices for 2023. TRMS respondents expect prices to grow over the next six months, but that expectation includes the price of raw materials. Housing manufacturers also anticipate labor costs to increase, but they plan on expanding payrolls to expand production.

Supply chains have been stable, and respondents expressed an improvement in the overall level of uncertainty.

“The industry had to navigate through most of May with the uncertainty of whether the Department of Energy’s (DOE) Energy Conservation Standards for Manufactured Housing were going to take effect on the last day of the month as scheduled,” according to Rob Ripperda, vice president of operations for the Texas Manufactured Housing Association. “The DOE published a proposed rule back in March asking for input on delaying the implementation, but confirmation of a later compliance date was not announced until May 19th, just 12 days before the changes were supposed to take effect.”

The TRMS reflected this development, with the regulatory-burden index holding firmly in positive territory, but its corresponding six-month-expectations iteration trended downward.

Figure: Regulatory Burden

“Manufacturers will have to wait and see what the final compliance procedures will ultimately be, but once those rules are finalized, they will have 60 days to get their single-section production lines ready and until July 1, 2025, for their multi-section homes,” Ripperda said.

All TMHA members with manufacturing facilities in the state were invited to participate in the sentiment survey, and the survey panel represents 89 percent of HUD-code homes produced in Texas.

Funded by Texas real estate licensee fees, TRERC was created by the state legislature to meet the needs of many audiences, including the real estate industry, instructors, researchers, and the public.​

https://mailchi.mp/recenter/news-release-kkhutofjen19-0623
Production increases, momentum builds in Texas’ manufactured housing industryProduction increases, momentum builds in Texas’ manufactured housing industry2023-05-15T05:00:00Z

​​​COLLEGE STATION, Tex. (Texas Real Estate Research Center) – The outlook in Texas’ manufactured-housing industry strengthened for the third consecutive month, according to the latest Texas Manufactured Housing Survey (TMHS) The April reading marked the largest improvement since last summer.

New orders continued to accelerate, and the TMHS production index moved positive after stalling during the second half of 2022.

“Housing manufacturers have been preparing to ramp up production for several months, and that came to fruition in April,” said Wes Miller, senior research associate at the Texas Real Estate Research Center at Texas A&M University (TRERC). “As expected, companies expanded payrolls and lengthened workweeks to reach higher run rates.”

“Through both retailer and community channels, manufacturers have seen increased placements of their homes in and around Harris County, out west in the Midland-Odessa area, and down south in Cameron County,” said Rob Ripperda, vice president of operations for the Texas Manufactured Housing Association. “Placements are on pace to elevate further based on first-quarter shipment data, and that should pull Texas’ aggregate inventory back to normal levels. If sales stay strong, manufacturers should continue to see those orders come in and those backlogs get longer.”

TMHS respondents expressed that exact sentiment, with the sales-expectations index hovering around record highs, leading to backlogs.

“The optimism from housing manufacturers may be a result of stronger-than-expected performance by the Texas economy,” said TRERC Research Economist Dr. Harold Hunt. “Although a recession is not yet off the table, Texas’ job-growth expectations are ahead of where they were six months ago. Mortgage rates have come down from their highs as well, possibly giving buyers more confidence about the future.”

Interest rates may stabilize further as the Federal Reserve contemplates an end to the current rate-hike cycle.

Funded by Texas real estate licensee fees, TRERC was created by the state legislature to meet the needs of many audiences, including the real estate industry, instructors, researchers, and the public.​​

https://mailchi.mp/recenter/press-release18-0523
Texas mortgage market optimistic as home-purchase originations reboundTexas mortgage market optimistic as home-purchase originations rebound2023-04-12T05:00:00Z

​COLLEGE STATION, Tex. (Texas Real Estate Research Center) – Mortgage-interest rates dipped lower in March, leading to increased business activity and an improved outlook across Texas’ residential mortgage market, according to the latest Texas Residential Mortgage Survey (TRMS).

The volume and average value of home-purchase originations continued to rebound from last year’s contraction, and additional growth is expected over the next six months.

“The spring buying season has begun as evidenced by increased mortgage loan pre-approvals and applications for purchase transactions,” according to Matt Kike, vice president of the Texas Mortgage Bankers Association and president of Network Funding LP. “Borrowers locked in slightly lower interest rates in March, and Texas mortgage bankers expect rates to fall further into summer.”

“If rates do continue to moderate, as predicted in the TRMS, we would expect to see continuing increases in purchase originations over and above seasonally expected improvements,” said Dr. Adam Perdue, research economist at the Texas Real Estate Research Center. “This would translate into increased home sales and prices.”

Single-family home prices jumped nearly 40 percent during the pandemic boom based on the TRERC Home Price Index. A portion of that growth receded in the 2nd half of 2022, but the pace of the price correction has slowed so far this year.

The monthly survey is a collaborative effort between the Texas Mortgage Bankers Association and TRERC to provide contemporaneous analysis of changes and conditions in the residential mortgage industry. ​​

https://mailchi.mp/recenter/news-release-5l295wt7fs17-0423
2023 outlook optimistic for Texas manufactured housing industry2023 outlook optimistic for Texas manufactured housing industry2023-04-11T05:00:00Z

COLLEGE STATION, Tex. (Texas Real Estate Research Center) – Texas’ manufactured housing activity accelerated in March, marking the second straight month of industry improvements according to the latest Texas Manufactured Housing Survey (TMHS).

The TMHS sales index accelerated into positive territory and reached its highest value since January 2021.

“Despite last year’s macroeconomic challenges, housing manufacturers predicted a jump in sales back in the October survey,” said Wes Miller, senior research associate at the Texas Real Estate Research Center. “Data revisions reveal an improved economic environment in February and March that is expected to extend into the summer.”

The survey is completed during the last week of each month, meaning the March optimism takes into account any financial-stability concerns after the Silicon Valley Bank run.

This elevated optimism coincided with decreased prices paid for raw materials and much less volatility in the supply chain. The TMHS indicated an eight-month stretch of supply-chain normalization, corroborating improvements in vertical operations after pandemic disruptions.

“The New York Federal Reserve’s Global Supply Chain Pressure Index has proven to be a pretty good indicator of supply-chain conditions,” said TRERC Research Economist Dr. Harold Hunt. “The index turned negative in February, the most recent data, indicating supply-chain pressures are now below the long-term average. This was the first negative reading since August 2019 and a sign that supply chains are effectively back to normal.”

With supply chains smoothing and demand picking up, Texas’ housing manufacturers anticipate significant production increases over the next six months. The increased activity should support payroll expansions and average workweeks, both of which contracted consistently since last summer.

“The order increase in March was a welcome sign for the industry that retailers are working their way through excess and older inventory,” said Rob Ripperda, vice president of operations for the Texas Manufactured Housing Association. “The last time there was a reduction in the aggregate inventory level for the state prior to this first quarter of 2023 was in the summer of 2021. Production levels have been running at the lowest levels in a decade, but increased orders should start pushing production up as we move into the second quarter of the year.”

TMHS respondents, however, anticipate backlogs to build up over the next six months, suggesting sales may continue to outpace production.

https://mailchi.mp/recenter/news-release-nf8dinr76f16-0423
32nd Annual Outlook for Texas Land Markets is April 13-1432nd Annual Outlook for Texas Land Markets is April 13-142023-03-24T05:00:00Z

COLLEGE STATION, Tex. (Texas Real Estate Research Center) – It’s the largest roundup of landowners, brokers, appraisers, and others with Texas rural land interests. Some 500 are expected to attend the 32nd Annual Outlook for Texas Land Markets set for April 13-14 in San Antonio.

The conference is organized by the Texas Real Estate Research Center at Texas A&M University.

“The two-day event looks at land markets from many angles,” said Dr. Charles Gilliland, TRERC research economist and rural land expert. “Speakers include economists, attorneys, publishers, engineers, and land and wildlife managers who will bring unique perspectives on the Texas land market.”

Click here for registration and information.

Funded by Texas real estate license fees, TRERC was created by the state legislature to meet the needs of many audiences, including the real estate industry, instructors, researchers, and the public.​​​​​​​

https://mailchi.mp/recenter/news-release-i6uta7oei915-0323