The Home Builders Assocation of Greenville would like to officially welcome you, please join us for new member orientationat
the HBA office on Tuesday, August 4th at 5:30p.m. The reception will start with a short meeting on what
the HBA of Greenville is about and how you can get the most out of your
membership and get involved. After which, please stay for a reception
with the board of directors and current members of the HBA.
Responding to concerns from the Consumer Financial Protection Bureau, Wells Fargo announced on July 29 that it is voluntarily discontinuing affiliated marketing agreements with builders and realtors. In general, these type of agreements benefit both builders and lenders. Lenders receive business from builders who refer their buyers and because the lender is familiar with the builder, it helps to make the home buying lending process proceed more smoothly.
While these marketing agreements are legal, Wells Fargo has acted unilaterally to take this action to avoid any appearance of paying for referrals.
The Wells Fargo announcement is expected to have a limited impact on our industry, as the vast majority of our members do not have such agreements with Wells Fargo. However, if the Wells Fargo action causes other financial institutions to follow suit, this could affect builders who have similar agreements with other lenders.
Note that Wells Fargo is not a member of the Home Builders Association of Greenville.
Nationally, interest rates on conventional purchase-money mortgages increased from May to June, according to several indices of new mortgage contracts.
The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders index was 3.85 percent for loans closed in late June, up 10 basis points from 3.75 percent in May.
The average interest rate on all mortgage loans was 3.85 percent, up 10 basis points from 3.75 in May.
The average interest rate on conventional, 30-year, fixed-rate mortgages of $417,000 or less was 4.04 percent, an increase of 14 basis points from 3.90 in May.
The effective interest rate on all mortgage loans was 3.99 percent in June, up 9 basis points from 3.90 percent in May. The effective interest rate accounts for the addition of initial fees and charges over the life of the mortgage.
The average loan amount for all loans was $325,600 in May, up $14,700 from $310,900 in May.
Existing home sales, as reported by the National Association of Realtors,
increased in June to the highest level since February 2007. Although
the June percent share of first-time buyers declined from May to 30%,
that share remained at or above 30% for the fourth consecutive month.
Total existing home sales increased by 3.2% in June to a seasonally
adjusted rate of 5.49 million units combined for single-family homes,
townhomes, condominiums and co-ops, up from a downwardly revised 5.32
million units in May. Junel existing sales were up 9.6% from the same
period a year ago, and have increased year-over-year for nine
Existing sales increased in all regions, ranging from 4.7% in the
Midwest to 2.3% in the South. Year-over-year, all four regions also
increased, ranging from 12.7% in the Midwest to 7.3% in the South.
Total housing inventory in June increased by 0.9% from May, and is
very slightly above its level a year ago. At the current sales rate, the
June unsold inventory represents a 5.0-month supply, lower than the
5.1-month and 5.3-month supply the previous two months. Some 47% of
existing homes in June were on the market for less than a month, the
highest share since June 2013.
The distressed sales share decreased to 8% from 10% in May, and are
well below the 11% share during the same month a year ago. Distressed
sales are defined as foreclosures and short sales sold at deep
discounts. June all cash sales fell to 22%, matching the lowest share
since December 2009. Individual investors purchased a 12 share of homes
in June, down from 16% during June of 2014. The accelerating withdrawal
of cash investors will create more opportunity for first-time buyers.
The June median sales price of $236,400 was 6.5% above the same month
a year ago, represented the 40th consecutive month of year-over-year
price increases, and surpassed the peak median sales price set in July
2006. The median condominium/co-op price increased to $226,500 in June,
and was up 5.5% from the same month a year ago.
The Pending Home Sales Index
increased for the fifth consecutive month in May. The continued
increase in existing sales is expected to increase throughout the year,
as first-time buyers return to the market.
Jacqueline Jo Dey passed away onJuly 20, 2015, at her home in Dawsonville, GA, surrounded by her family. She was 74.
She is survived by her husband of 53 years, Jerry Dey of Dawsonville, GA. She is also survived by her four children, Michael Dey and his wife, Karen, of Greenville and Columbia, SC; Mark Dey and his wife, Lisa, of Rock Hill, SC; Michelle Hughes, of Orangeburg, SC; and Susan Koblasz and her husband, Jim, of Cumming, GA. She also is survived by her seven grandchildren, Patrick Dey of Denver, CO; Stacey Dey of West Columbia, SC; Bradley Dey and his wife, Miranda, of Greer, SC; Christopher Hughes of Newberry, SC; Cameron Dey of Rock Hill SC; Erin Koblasz of Cumming, GA; and Katie Koblasz of Cumming, GA. She is further survived by one great grandchild, Linden Dey of Greer, SC. She was preceded in death by her parents, Jack and Mildred Childers, her sister, Gerri Jean Rubino, and her brother, Ricky Keith Childers.
Known to family and friends as Jackie, she was a native of Virgie, KY. She graduated from Roseville High School in Roseville, MI. A professional lab technician, Jackie devoted her career to the care of others, but devoted her life to her family and friends. Jackie cherished family trips to Edisto Beach, SC, and her home state of Kentucky.
In lieu of flowers, the family requests donations be made to the Alzheimer’s Association of Georgia or Good Shepherd Catholic Church, Cumming, GA.
Jackie's son, Michael Dey, is the Executive Officer of the Home Builders Association of Greenville. On behalf of the HBA members and staff we send our sincerest condolences to Michael and his family.
by Tom Woods, Chairman, National Association of Home Builders
The U.S. Department of Labor (DOL) on July 15 issued guidance regarding application of the criteria used to assess whether a worker is properly classified as an independent contractor under the Fair Labor Standards Act, which determines overtime, unemployment insurance and other obligations. Independent contractors are not covered under the act.
The test used under the FLSA is one of several used at the federal level to determine worker classification. The Internal Revenue Service, the National Labor Relations Act, and Employee Retirement Income Security ACT (ERISA), each use a different test to distinguish independent contractors from employees.
The DOL document does not appear to signal a shift or change in the law as it relates to how workers are classified as either employees or independent contractors. Rather, it clarifies the factors to be considered in making such a determination.
On its face, this "interpretation" does not appear to place any new or additional burdens on the industry. However, given the emphasis on the construction industry to date, and in the guidance document, NAHB will have to be vigilant in monitoring enforcement to determine how DOL is applying the "economic realities" test in the field. Arguably, the factors leave a lot of room for interpretation, and the document confirms there is clearly a bias towards worker status as employees.
We are also concerned that the Administration is too focused on enforcement and providing less individualized assistance to employers who are in need of compliance information. NAHB plans to urge Congress to use its oversight authority to ensure DOL hasn't overstepped its boundaries.
NAHB has provided analysis on the DOL guidance to help you determine whether a worker is an independent contractor or employee.
We will continue to monitor this situation closely.
by Ron Tate, Esq.
General Counsel, Home Builders Association of Greenville
Shareholder, Gallivan, White & Boyd, PA
Changes are coming to an employer’s requirement to pay overtime to employees, and it is going to have a significant effect on many employers, including home builders. As employers know, under the Fair Labor Standards Act (FLSA), employees are generally entitled to overtime pay for hours worked in excess of 40 hours in a work week. Unless exempt, this rule applies to all employees, including craftsmen, construction workers, carpenters, electricians, plumbers, and other laborers on a construction site.
There are certain exemptions, however, including for employees who hold positions with supervisory, managerial, administrative, and professional responsibilities and who earn more than $23,660 per year ($455 per week). Under the current rules, if these employees are compensated above that threshold amount, they are considered exempt from overtime pay under the FLSA, and are not entitled to overtime pay regardless of the number of hours they work.
The Department of Labor (DOL), however, is in the process of changing the threshold amount. Specifically, on July 6, the DOL issued a Notice of Proposed Rulemaking in the Federal Register at 80 FR 38515, which, if finalized, will increase the threshold amount for exempt employees to more than double the current amount: $50,440.00. The basis for the proposal is to set the threshold amount to the top 40 percent of wage earners. The proposal also calls for indexing the threshold to inflation.
There is a comment period for this rule, which ends on September 4, 2015, and a final rule will be issued sometime thereafter. The rule, if finalized, will take effect 30-90 days after it is finalized.
The new regulation increasing the threshold to $50,440 is likely to increase the number of employees in the home building industry who are entitled to overtime pay. Specifically, many full-time supervisory construction employees have been exempted and not entitled to overtime as a result of the $23,660 threshold. But many of these employees do not make more than $50,000 per year.
According to the Bureau of Labor Statistics, the mean salary for first-line construction supervisors in South Carolina in 2014 was $55,680. The National Association of Home Builders estimates that 47 percent of the supervisors involved in residential construction in South Carolina will be affected by this change. With the new regulation, these employees will be entitled to time-and-one-half for all hours worked over 40 hours in a work week. This can potentially wreak havoc on cost projections and planning.
As we know, construction jobs occasionally require 60-hour (or more) work weeks when there is a push to complete a project, when there is bad weather in the forecast, or when an emergency arises. In those situations, nonexempt supervisory employees will be entitled to overtime pay for all hours over 40.
The predicament for home builders is that these employees are critical for providing customers a good product. These employees perform critical functions that might include managing labor forces, updating and managing schedules, keeping the accounting records, or insuring quality control. Furthermore, unlike many other laborers, these employees might be involved in every aspect of construction. They play a valuable role in the quality of the product being built.
If the new rule is approved, home builders may need to take action to avoid unplanned expenses. Possible actions include scheduling work to avoid overtime, raising the salaries of supervisory employees to the new threshold, or to hire additional supervisory employees to spread the work out so that each can work less than 40 hours per week and avoid overtime. Of course, none of these are very attractive or workable solutions. Reducing hours might lead to project delays; adding other supervisory employees would further increase costs and will cause inefficiency. Thus, while overtime pay can potentially be avoided, the solutions might involve even greater costs. Any way you slice it, for many home builders, it may get more expensive to build a house.