National Data Indicates First Time Home Buyers are Still MIA

In the last year home building has surged 22 percent, and building permits are up 8 percent.  Even the Builder Confidence Index is up, now above 60.  However, first-time home buyers, which usually account for 30 percent of all new home buyers, is just 16 percent.

Why?  Underwriting guidelines, underemployment, high student loan debt, and a lower than expected opinion of homeownership, according to Dr. David Crowe, Chief Economist of the National Association of Home Builders.

Keith Smith Builders Takes Cabinet Makers Association Honors

Keith Smith Builders won six Wood Diamond Awards at the annual Cabinet Makers Association meetings in Atlanta.  Below are the projects and honors earned by Keith Smith Builders:

First Place, Architectural Millwork Category, Best Overall Project, More than $25,000
First Place,Best Overall Project, Best Overall
First Place, Fireplace, Best Overal
First Place, Game Room, Best Overall
First Place, Home Theater, Best Overall, More than $25,000
Second Place, Residential Bar, Best Overall, More than $25,000

Visit the galleries to see images of the award winners by clicking here.

Home Construction Rebounds in July

After a disappointing June report, housing starts rebounded to an annual rate of 1.093 million for a 15.7% increase over the upwardly revised June level. The substantial June dip, caused by a fall in single-family construction in the South, was eliminated as single-family construction rose 8.3% with increases in three of the four regions. Midwest single-family starts were down 6.8% to a 109,000 rate, but remain at about the same level as the second quarter average.

The Census and HUD data also indicated that multifamily starts increased to a 437,000 annual rate, the highest since February 2006. This increase was also spread across three of the four regions. Rental demand should continue to be strong, with recent CPI data and NAHB calculations showing inflation-adjusted rents up 1.4% over the last 12 months.

July’s home construction rebound mirrored rising home builder confidence. The August NAHB/Wells Fargo Housing Index rose two more points to 55, approaching the 2014 high in January of 56. All three index subcomponents also increased. Expectations for the next six months increased by two points to 65, the highest since August 2013 and the index for traffic rose three points to 42, the highest since December 2013. The current sales index rose two points to 58.

A key question going forward is the degree to which the mix of buyers may change. The share of first-time home buyers remains weak, with a May NAHB survey showing only a 16% market share, compared to 25% to 28% between 2001 and 2007.

One consequence of this mix of buyers has been a rising trend in new single-family home size. However, this increase appeared to cool during the second quarter. Census data and NAHB analysis indicate that the median new single-family home size was 2,478 square feet, unchanged from the first quarter but 18% higher than cycle lows. More first-time buyers in the future will hold back growth in median new single-family home size.

Builder confidence in the single-family 55+ housing market was up again on a year-over-year basis in the second quarter, according to NAHB’s 55+ Housing Market Index. Compared to the second quarter of 2013, the 55+HMI for new single-family housing increased three points to 56–the highest second-quarter reading since the inception of the index in 2008 and the 11th consecutive quarter of year-over-year gains. One of the factors contributing to the positive outlook for new single-family 55+ housing is the slow but steady increase in existing home sales in the last three months.

The NAHB/First American Leading Markets Index advanced one point in the second quarter of 2014 to .89 from a June level of .88. The index measures the nation’s and 351 metropolitan markets’ proximity to normal economic and housing market activity. A value of one or more means the market is back to or above a normal level with an average of three components at or above one: single-family housing permits, house prices and employment levels. Over one-third (36%) of the metropolitan areas measured improvement since June and 78% of them improved since August 2014.

Consumer debt positions continue to improve, which should be a net positive for housing demand. Mortgage Bankers Association data indicate that mortgage delinquencies decreased to a seasonally adjusted rate of 6.04% at the end of the second quarter, 92 basis points below a year prior. And while total consumer credit, including auto and student loans, has expanded (by $62 billion in the second quarter), consumer debt service ratios remain low despite disappointing income growth.

However, home price gains, which improved consumer balance sheets, have taken a small toll on housing affordability. The NAHB/Wells Fargo Housing Opportunity Index reached a level of 62.6 for the second quarter, meaning 62.6% of new and existing homes sold during the quarter were affordable to a family earning the U.S. median income of $63,900—down from the first quarter reading of 65.5.

Besides housing demand concerns, recent industry headwinds have included rising building material prices and scarcity. July producer price index data from the Bureau of Labor Statistics reveal that softwood lumber prices declined from June but remain above late 2013 prices. OSB prices dipped in July and added production capacity has kept price pressures in check. Gypsum prices are below 2014 highs but remain above their 2006 housing boom peak.

This more positive news concerning material prices matches a July NAHB industry survey that shows that shortages of key building materials have eased in 2014. Only 15% of builders reported some or serious shortages of trusses or clay bricks, the highest incidence among the more than 20 materials builders were asked about. Fourteen percent reported shortages of windows and doors, gypsum wall board, and cabinets.

Nonetheless, other headwinds persist. The count of unfilled construction sector jobs increased in June to 127,000, the fourth highest tally since the end of the recession. The number of job openings has grown significantly since 2011 as the housing industry has recovered. Since the point of peak job losses during the recession, the industry has added more than 301,000 jobs and the unemployment rate has fallen from 22% to 8.8% in July.

In analysis news, NAHB economists recently examined some of the consequences and factors determining homeownership for immigrant households. Analysts also looked at Census data concerning how people commute to work. The estimates show that from 2000 to 2012, the largest increases in total commuting were for driving alone, with working at home coming in second. Carpooling was down. Finally, NAHB examined recent global home price data.

Your HBA meets with Senator Tim Scott's Legislative Advisers

Michael Dey and Mike Freeman, GMB, left, meet with Senator Tim Scott's Legislative Advisers at the Realtors Association offices.

Mike Freeman, GMB, President of your Home Builders Association and Partner in ACA/Freewood Contracting, and Michael Dey, Executive Vice President, met today with legislative advisers to Senator Tim Scott.  The meeting was a joint session with the Greater Greenville Association of Realtors and Spartanburg Association of Realtors.

Joining the meeting from Senator Scott's staff were Jaron Smith, Senator Scott's Legislative Adviser on tax, budget, and banking issues, and Danielle Smith, Senator Scott's Upstate Regional Director.

The association representatives discussed the following topics:

1.  Reforming and preserving the mortgage finance system and in particular, ensuring the continuation of the fixed-rate 30-year mortgage
2. Blocking EPA rulemaking that will expand the definition of Waters of the U.S.
3. Preserve real estate-related tax policies including: renewing Mortgage Debt Forgiveness Relief Act, preserving the mortgage interest deduction, preserving the property tax deduction, and preserving like-kind (1031) exchanges
4. Reauthorize the Terrorism Risk Insurance Act

Your Home Builders Association would like to thank the Greater Greenville Association of Realtors for setting up and hosting the meeting. "We have a great partnership with GGAR on governmental affairs matters," said Michael Dey, Executive Vice President.  "Our coalition continues to produce great results for the members of both associations."

Builder Breakfast TOMORROW! Sponsored by GBS

The HBA will be having our quarterly Builder Breakfast thisThursday, August 21st beginning at 7:30 a.m. This event is sponsored by GBS Building Supply and our featured speaker is Eric Vinson, AICP, Director of Planning and Codes Enforcement for Greenville County.

This event will be held at The Epicurean Restaurant. (1455 Woodruff Rd, Greenville)

Also, enjoy a short presentation on the latest and greatest products from KBRS-Tileable Shower Solutions and Plygem Stone courtesy of GBS Building Supply.

Don't miss out! 
Please R.S.V.P to 864-254-0133. This event is for Builder Members ONLY!

HBA to thank yearly sponsors at Annual Sponsorship Luncheon.

Your HBA would like to thank each of our generous sponsors at the Annual Sponsorship Luncheon on August 27th at Progress Lighting.
The event will begin at 11:30 a.m, for more information or to register please contact the HBA office at 864-254-0133.
This years sponsors include:

Housing Production on Upswing, Tops 1 Million in July

Fueled by strong single- and multifamily growth, housing starts rose 15.7% to a seasonally adjusted annual rate of 1.093 million units in July, according to newly released figures from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the highest number since November 2013.

“A return to production levels over one million confirms consumer confidence continues to improve,” said Kevin Kelly. “Propelled by a healthier economy, more and more people are feeling ready to buy a home.”

Single-family housing starts were up 8.3% to a seasonally adjusted annual rate of 656,000 units in July, while multifamily production jumped 28.9% to 437,000 units. Multifamily production has not been this high since February 2006.

Regionally in July, combined single- and multifamily housing production rose in the Northeast, South and West, with respective gains of 44 percent, 29 percent and 18.6 percent. Total production fell by 24.8 percent in the Midwest from an unusually high June level.

Issuance of building permits registered an 8.1 percent increase to a seasonally adjusted annual rate of 1.052 million units in July. Multifamily permits rose 21.5 percent to 412,000 units while single-family permits increased by 0.9 percent to 640,000 units.

The Northeast, South and West registered overall permit gains of 18.8 percent, 9.6 percent and 7.2 percent, respectively, while the Midwest posted a 0.6 percent loss.

Greenville Roads Briefing Planned for August 26

A question will be on the ballot in November about whether the county should increase the general sales tax by one cent for eight years.  The proceeds of the tax increase, about $65 million per year, will be spent to improve the county's roads, bridges, and pedestrian facilities infrastructure.

If you are interested in knowing more about the proposal, you will have the opportunity to attend a briefing on Tuesday, August 26, 4 p.m. until 6 p.m., at Embassy Suites on Verdae Boulevard.  Light refreshments will be served.  The briefing will be provided by Citizens for a Better Greenville County, a coalition of business interests that your Home Builders Association has joined to support the referendum question.

You can RSVP to attend the briefing by emailing smoore@completepr.net.

Member Advantage Now Includes Geico

Protecting your assets is very important to you. After all, you have worked your whole life to obtain them. Your HBA membership and GEICO are here to help. GEICO has more than 75 years of industry experience and understands what you need from your insurer.

GEICO and Member Advantage are proud to be working together to offer exceptional insurance products and a great savings opportunity for HBA members. As a member of the Home Builders Association, you could qualify for an exclusive discount on GEICO auto insurance.

When you consider the fact that new GEICO policyholders report average annual savings of over $500, you could be saving a lot of money. But there’s more to GEICO than just great rates. GEICO policyholders receive 24/7, professional, courteous service. When it comes to claim handling, GEICO is able to settle many claims within 48 hours of being reported, and sometimes a check can even be written on the spot. That’s why GEICO customers report a 97% customer satisfaction rate. As a subsidiary of Warren Buffett’s Berkshire Hathaway Inc, GEICO has the stability of a company you can trust. Savings, service and reliability? They can all be yours.

Visit geico.com/disc/NAHB or call 800-368-2734 and mention NAHB, for a simple, no-obligation rate quote to see how much you could save with your exclusive member discount. GEICO also can help you obtain competitive rates on homeowner’s, condo, motorcycle and more insurance coverage.

Some discounts, coverages, payment plans, and features are not available in all states or in all GEICO companies. Discount amount varies in some states. One group discount applicable per policy. Coverage is individual. In New York a premium reduction may be available. Average savings amount based on national GEICO New Policyholder survey data through March 2014. GEICO is the second-largest private passenger auto insurer in the United States according to the 2013 A.M. Best market share report, published April 2014. Customer satisfaction based on an independent study conducted by Alan Newman Research, 2013. Homeowners, condo and renters coverages are written through non-affiliated insurance companies and are secured through the GEICO Insurance Agency, Inc. Motorcycle and ATV coverages are underwritten by GEICO Indemnity Company.