Wednesday, June 13, 2018

Surging lumber prices threaten housing affordability

by Rob Dietz, Chief Economist, National Association of Home Builders

The most serious headwind facing housing markets today is the escalation of framing lumber prices—up 59% since the start of 2017. Recent NAHB surveys suggest the price for lumber has overtaken the availability of labor as the primary business challenge for home builders. Since the beginning of last year, rising lumber prices have added more than $7,000 to the price of a typical new home and more than $2,000 to the price of a typical apartment.

There are a number of reasons why lumber prices have jumped, including a rail car shortage in Canada, but the primary factor is the 21% effective tariff rate placed on Canadian softwood lumber. The ongoing concerns over trade wars represent a macroeconomic risk to the gains resulting from the recent tax legislation, and lumber is a prime example.

Nonetheless, builder confidence remains strong, despite total housing starts falling 3.7% in April. Though multifamily starts declined 11% last month, that market is up 10% year-to-date, outperforming our forecast. And single-family starts are 8% above their year-to-date totals from a year ago. However, recent data show a gain in average new-home size, which is an early indicator of weakness in the entry-level market due to rising input costs.

U.S. House Price Index: Prices Rose 1.7 percent in the first quarter

U.S. house prices rose 1.7 percent in the first quarter of 2018 according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI). House prices rose 6.9 percent from the first quarter of 2017 to the first quarter of 2018. FHFA's seasonally adjusted monthly index for March was up 0.1 percent from February.

The HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.

See video for the first quarter featuring Dr. Doerner.

Significant Findings

Home prices rose in all 50 states and the District of Columbia between the first quarter of 2017 and the first quarter of 2018. The top five areas in annual appreciation were: 1) Nevada 13.7 percent; 2) Washington 13.1 percent; 3) Idaho 11.1 percent; 4) Colorado 10.6 percent; and 5) Utah 9.9 percent.

Home prices rose in each of the 100 largest metropolitan areas in the U.S. over the last four quarters. Annual price increases were greatest in Las Vegas-Henderson-Paradise, NV, where prices increased by 17.1 percent. Prices were weakest in Tulsa, OK where they rose 0.8 percent.

Of the nine census divisions, the Pacific division experienced the strongest four quarter appreciation, posting a 9.5 percent gain between the first quarters of 2017 and 2018 and a 2.6 percent increase in the first quarter of 2018. Annual house price appreciation was weakest in the East South Central division, where prices rose 5.3 percent between the first quarters of 2017 and 2018.

Friday, May 11, 2018

Strong Wage Growth Boosts Housing Affordability

Strong wage growth more than offset an increase in mortgage interest rates to boost nationwide housing affordability in the first quarter of 2018, according to the NAHB Housing Opportunity Index (HOI).

In all, 61.6% of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $71,900. This is up from the 59.6% in the fourth quarter of 2017.

In Greater Greenville, a slight drop in housing prices coupled with a $4,400 increase in annual wages resulted in an improvement to the index from 70.6% to 75.7% during the first quarter.  House prices dropped from $202,000 to $194,000 as builders responded to demand from millennials for housing that they can afford.  Greenville is the 107th most affordable housing market in the country, down from 98th last quarter as other markets even better improvements.

Charleston's affordability also improved as wages rose by nearly 10 percent.  Charlotte also improved, along with Atlanta.  Columbia's affordability fell slightly to 82.5%.  Columbia is among the 50 most affordable housing markets in the country and 10th in the Southeast.

“Continued job growth, rising wages and strong consumer confidence are fueling housing demand. In turn, this should lead to more buyers entering the housing market in the coming months,” said NAHB chairman Randy Noel. “However, builders continue to face chronic labor and lot shortages, rising prices for building materials and excessive regulations.”

“At the national level, median family income rose an impressive 5.7% to $71,900 in 2018 from $68,000 last year, and this wage growth helped to boost housing affordability,” said NAHB chief economist Robert Dietz. “A growing economy, along with tight inventories and increasing household formations, will lift housing production in the year ahead. But we also expect mortgage rates to continue to rise, and this will place downward pressure on affordability.”

Average mortgage rates jumped by nearly 30 basis points to 4.34% from 4.06% in the fourth quarter of 2017.

Of the 237 metropolitan areas recorded in the first quarter HOI, 167 markets registered a gain in affordability from the fourth quarter of 2017, 68 posted a loss and two were unchanged.

See nahb.org/hoi for tables, historic data and details.

Friday, May 4, 2018

Coleman Shouse, Michael Neiri to be inducted into the South Carolina Housing Hall of Fame

Coleman Shouse, APB
J. Coleman Shouse, APB, will be inducted into the South Carolina Housing Hall of Fame this summer at the Home Builders Association of South Carolina State Convention. Coleman was nominated for the honor by the Board of Directors of your Home Builders Association of Greenville.

Michael Nieri, founder of Great Southern Homes, also will be inducted into the Housing Hall of Fame. Nieri was nominated by the Building Industry Association of Central South Carolina (Columbia).

Coleman Shouse is Land Development and Entitlement Manager with LS Residential. He was President of the HBA of Greenville in 2006. He also was the BB&T Builder Member of the Year in 2006. For the past several years Coleman has been an active participant and leader of the association's government affairs efforts.

Prior to his move into home building, Coleman was Executive Director of Greenville County's Planning Commission from 1974 until 1983. He also led the American Institute of Architects as President in 1977.

Coleman was honored by Governor David Beasley in 1998 with the Order of the Palmetto, the highest civilian honor bestowed on someone by the State of South Carolina.
Michael Nieri

Michael Neiri is founder and President of Great Southern Homes, an active builder member in Columbia and Greenville. Earl McLeod, Executive Director of the BIA of Central SC, says of Nieri that he is "an asset to the entire industry and his community."

The S.C. Housing Hall of Fame honors South Carolinians who have made a life-time commitment to housing and the home building industry in South Carolina. Recent recipients from Greenville include C. Dan Joyner, Howard Cox, Keith Smith, APB, and Dan Rawls. For more about the Hall of Fame, click here.

Coleman and Michael will be inducted at the State Convention on July 15 in Savannah. Click here to register.

State Convention is in Savannah July 13-16

The Home Builders Association of South Carolina State Convention will be in Savannah this summer at The DeSoto hotel.

Dates: July 13-16

Events will feature a luncheon to honor Pinnacle Award recipients and a dinner to honor two new inductees to the South Carolina Housing Hall of Fame. The event also will feature two days of education sessions on topics like understanding generational differences, a forum on construction issues, an economic forecast by Dr. Elliott Eisenberg, and a legislative and regulatory recap by your state association's legislative lobbying team.

Click here to register.
Congressman Jeff Duncan accepts Defender of Housing Award from (from left to right) Rick Quinn, APB, Quinn-Satterfield, and Dave Hagan, APB, and Scott Daniel, APB, of Ryan Homes.
Your HBA leaders and PAC donors met this week with Congressman Jeff Duncan.

During the meeting our members discussed with Duncan the need to resume negotiations with Canada over the lumber tariff, the need for a long-term renewal of the National Flood Insurance Program, the labor shortage and the need to expand the guest-worker program and support training in the building trades, and a long-term solution to the the mortgage-finance system.

During the meeting, HBA of South Carolina President Rick Quinn, APB, presented Congressman Duncan with the NAHB Defender of Housing Award. Thank you Ryan Homes for hosting the meeting.

Thursday, May 3, 2018

Fifth Annual Bridge Awards Recipients Announced

James Speer, APB








By James Speer, APB
President, Home Builders Association of Greenville
Partner, CarsonSpeer Builders


Each year the Home Builders Association of Greenville honors members for their contributions and achievements with the Bridge Awards presented by GBS Building Supply. The Sales and Marketing Council of the Upstate, a group within the Home Builders Association dedicated to education and professionalism in new home sales and marketing, recognized many of its members with 2017 Bridge Awards.

Nichole Moore, SMC Chairwoman, Tommy Coker, GBS, Terrie Easley, Greenville News, Kelly Bäcker, APB, Whitney Trexler, Greenville News, and Charlotte Norwood, Greenville News.

Tommy Coker, GBS, Nichole Moore, SMC Chairwoman, Michael Johnson, and Terrie Easley, Whitney Trexler, and Charlotte Norwood of the Greenville News.
The Greenville News Sales Agent of the Year 
New Home Sales Agent of the Year: Kelly Bäcker, APB, Ryan Homes
General Brokerage Sales Agent of the Year: Michael Johnson, The Haro Group of Keller Williams
Sponsor: The Greenville News

Tommy Coker, GBS, Nichole Moore, SMC Chairwoman, Tonya Lambrecht, APB, and Terrie Easley, Whitney Trexler, and Charlotte Norwood of the Greenville News.

Tommy Coker, GBS, Nichole Moore, SMC Chairwoman, Haro Setian, and Terrie Easley, Whitney Trexler, and Charlotte Norwood of the Greenville News.

The Greenville News Sales Executive of the Year 
New Home Sales Executive of the Year: Tonya Lambrecht, APB, Ryan Homes
General Brokerage Sales Executive of the Year: Haro Setian, The Haro Group of Keller Williams
Sponsor: The Greenville News

Nichole Moore, SMC Chairwoman, Amanda McCall, Tommy Coker, GBS, and James Speer, APB.

Lender of the Year
Amanda McCall, Prime Lending

The Haro Group of Keller Williams Historic District.
Ryan Homes.

Sales Team of the Year
Sales Team of the Year, General Brokerage: The Haro Group of Keller Williams Historic District
Sales Team of the Year, New Home Sales and Marketing: Ryan Homes

Million Dollar Circle
Sales and Marketing Council of the Upstate members who achieved new home sales of between $1 million and $5 million 2017:
  • Tim Sterr, The Haro Group of Keller Williams Historic District
  • Analeisa Latham, The Haro Group of Keller Williams Historic District
  • Benjamin Patat, The Haro Group of Keller Williams Historic District
  • Kayla Slice, The Haro Group of Keller Williams Historic District
  • Cory Wickline, The Haro Group of Keller Williams Historic District
  • Kathryn Farrand, The Haro Group of Keller Williams Historic District
  • Julie Thaxton, The Haro Group of Keller Williams Historic District
  • Nate Emery, The Haro Group of Keller Williams Historic District
  • Aubree Lewis, The Haro Group of Keller Williams Historic District
  • Jon Melton, The Haro Group of Keller Williams Historic District
  • Houston Goodwin, The Haro Group of Keller Williams Historic District
  • Marcia Jarisch, APB, Meritage Homes
  • Pamela Fulmer, APB, Meritage Homes
  • Sherry Criminger, APB, Meritage Homes
  • Rita Norton, APB, Meritage Homes
  • Crystal Daniel, APB, Meritage Homes
  • Sheridan Burgos, APB, Meritage Homes
  • The MacDonald Team, Berkshire Hathaway Home Services
  • Tim Keagy, Berkshire Hathaway Home Services
  • Melissa Morrell, Berkshire Hathaway Home Services
  • Anthony Hackney, Berkshire Hathaway Home Services
  • Wyatt Pollitz, Modern Real Estate Consultants
  • Courtney Hughey, Modern Real Estate Consultants
  • James Akers, Jr., Modern Real Estate Consultants
  • Lee Vining, Modern Real Estate Consultants
  • Bradley Smith, Cross Creek Realty
  • Lisa McDowell, Allen Tate
SMC members who achieved new home sales of between $5 million and $10 million 2017:
  • Lorraine Lewis, APB, Meritage Homes
  • Anita Stoddard, APB, Meritage Homes
  • Hunter Hurst, APB, Meritage Homes
  • Emily Wilbourne, APB, Meritage Homes
  • Margaret “Peg” Higgins, APB, Meritage Homes
  • Kimberly Ryan, APB, Ryan Homes
  • Denita Kozeny, APB, Ryan Homes
  • Mary Beth Berry, APB, Ryan Homes
  • Jessica Franco, Blackton Property Partners
  • Christine Cashman, APB, Cothran Properties
  • Stacie Thompson, ReMax Moves
SMC members who achieved new home sales of between $10 million and $20 million 2017:
  • Kate Edge, APB, Ryan Homes
  • Valerie McCall, APB, Ryan Homes
  • Joe Blackton, Blackton Property Partners
  • Michael Johnson, The Haro Group of Keller Williams Historic District
SMC members who achieved new home sales of between $10 million and $20 million 2017:
  • Kelly Bäcker, APB, Ryan Homes