Americans Spent $150 Billion on Home Improvements and Repairs in 2013

U.S. home owners have significantly cut down on the amount of money they spend improving and repairing their homes, reports NAHB economist Rose Quint in a recent Eye on Housing blog post.

Home owners spent about $150 billion on home improvements and repairs in 2013, according to NAHB analysis of the most recent data from the American Housing Survey(AHS). The AHS is conducted every other year by the Census Bureau and sponsored by HUD.

The $150 billion in total remodeling expenditures in 2013 was 34% less than in 2007 ($227 billion), 19% less than in 2009 ($186 billion), and 16% less than in 2011 ($178 billion).

The AHS data also reveals total expenditures by job type. View the Eye on Housing blog post for full details.

Best Buy for Business Joins NPP

As a Home Builders Association member, you can now receive substantial savings from one of the nation's top consumer electronics companies. National Purchasing Partners (NPP) is excited to announce our newest partner, Best Buy for Business. Through your membership you now have access to top tier pricing on over 150,000 brand-name products.

Best Buy For Business offers:

• Multi-location shipping and local store pickup, returns and exchanges
• Technical support from Geek Squad
• Best Buy delivery and local installation services
• Flexible payment options like Net-30 invoicing, purchase orders and leasing
• Volume ordering on products and Best Buy gift cards

If you would like step-by-step instructions on how to create the account, click here.

To log into NPP click here, and for more information visit our website by clicking here.

Best Buy For Business offers products that may not be available at our retail stores. Product pricing, availability and offers may vary from our retail stores. BEST BUY, the BEST BUY logo, the tag design, GEEK SQUAD, BEST BUY FOR BUSINESS, the BEST BUY FOR BUSINESS logo and MY BEST BUY are trademarks of Best Buy. © 2015 Best Buy. All rights reserved.

FHFA Index Shows Mortgage Interest Rates Decreased in September

Nationally, interest rates on conventional purchase-money mortgages decreased from August to September, 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 3.93 percent for loans closed in late September, down 6 basis points from 3.99 percent in August.

The average interest rate on all mortgage loans was 3.95 percent, down 4 basis points from 3.99 in August.

The average interest rate on conventional, 30-year, fixed-rate mortgages of $417,000 or less was 4.17 percent, down 3 basis points from 4.20 in August.

The effective interest rate on all mortgage loans was 4.10 percent in September, down 5 basis points from 4.15 percent in August. 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 $307,700 in September, up $4,400 from $303,300 in August.

Congratulations to Pinnacle Award Winners

Home building industry professionals were awarded the Home Builders Association of South Carolina’s most prestigious awards last week in Asheville, NC. The thirteenth annual Celebration of Excellence awards ceremony was held to honor the recipients of the Pinnacle Awards.

About the Pinnacle Awards
The Pinnacle Awards were created to honor those in the home building industry who have achieved the highest standard of quality craftsmanship, innovative problem solving and customer satisfaction. This competition is a privilege of membership, as well as a means of challenging our members to greater levels of achievement. The Pinnacle Award recognizes the craftsmanship of the best home builders and remodelers in South Carolina, based on five categories:

• Green Building
• New Construction
• Remodeling
• Sales and Marketing
• Best Subdivision/Community

The 2015 Pinnacle Award winners from Greenville are:

• Ron Tate, Esq., Gallivan, White & Boyd, P.A., Thomas Bagnal Associate Member of the Year
• Patrick Square, Jason Armstrong, Community of the Year
• Patrick Square, Jason Armtstrong, Best Color Ad
• Dillard-Jones Builders, Susan Vernon, New Home Construction $1,000,000-1,499,999
• Gabriel Builders, Gus Rubio, New Home Construction $1,500,000-2,000,000
• Bergeron Custom Homes, Jason Bergeron, New Home Construction, $2,000,000-4,999,999
• Gabriel Builders, Gus Rubio, New Home Construction, more than $5,000,000

     

Jason Armstrong, Ron Tate, and Gus Rubio (respectively) receiving their awards.

Jason Armstrong, Ron Tate, and Gus Rubio hold their awards at the Celebration of Excellence ceremony

Jason Bergeron and Susan Peace-Vernon pick up their awards at the HBA office.

The HBA of Greenville is proud to have five of our members recognized for their hard work and dedication to the excellence of the industry.

EPA Publishes Final Clean Power Plan

The Clean Power Plan has been published in the federal register more than two months after the President and EPA Administrator Gina McCarthy announced the finalization of the rule. It goes into effect Dec. 22.

The final rule includes key changes championed by NAHB on behalf of our members. It has triggered a series of state actions as states develop their plans to be in compliance with EPA-established emission reduction requirements.

Additionally, EPA published a related proposed rule that is open to public comment. It contains multiple companion items to help implement the Clean Power Plan, including two model rules that states could use — once finalized — for their compliance plans to ease the approval process. The proposed rule also includes two draft federal plans.

EPA has included several new provisions in the final Clean Power Plan that were not open for comment under the original proposal. One is the Clean Energy Incentive Program, intended to encourage early action on renewable energy and energy-efficiency projects in low-income communities. NAHB is reviewing the program, which is outlined in the proposed model rules, and will submit comments on this and all other relevant provisions.

EPA is also accepting comments on related draft guidance that will affect how emission reductions from demand-side energy-efficiency programs are accounted for if states choose to use them as a compliance tool.

Comments on the proposed rule and draft guidance are due Jan. 21, 2016.

New Home Sales Drop in September

Sales of newly built single-family homes fell 11.5% to a seasonally adjusted annual rate of 468,000 units in September, according to newly released data from HUD and the U.S. Census Bureau.

“Despite this monthly drop, our members continue to tell us that housing is moving in the right direction,” said NAHB Chairman Tom Woods. “Consumers may have simply been reacting to soft job numbers.”

“It is not surprising to see sales pull back in September following a strong August reading, especially after a few months of weak job creation,” said NAHB Chief Economist David Crowe. “However, new-home sales year to date are up 17.6% compared to the same period of 2014, and we expect the market to continue improving at a gradual but steady pace for the rest of year.”

Regionally, new home sales were down across the board. Sales fell 61.8% in the Northeast, 8.3% in the Midwest, 8.7% in the South and 6.7% in the West.

The inventory of new homes for sale was 225,000 units in September. This is a 5.8-month supply at the current sales pace.

Housing Market Forecast

Save the date! The Home Builders Association of Greenville will be hosting its own Housing Market Forecast on February 9. The guest speaker will be Lawrence Yun, Chief Economist at the National Association of Realtors.

Steady employment and economic growth, pent-up demand, affordable home prices and attractive mortgage rates will keep the housing market on a gradual upward trend in 2016. However, persistent headwinds related to shortages and availability of lots and labor, along with rising materials prices are impeding a more robust recovery, according to economists who participated in the NAHB Fall Construction Forecast Webinar on Oct. 21.

“This recovery is all about jobs,” said NAHB Chief Economist David Crowe. “If people can get good jobs that pay decent incomes, the housing market will continue to move forward.”

The good news, Crowe added, is that total U.S. employment of 142 million is now well above the previous peak of 138 million that occurred in 2008.

The one caveat is that job growth has been concentrated heavily in the service sector, which tends to pay lower wages than goods producing jobs. Meanwhile, home equity has nearly doubled since 2011 and now stands at $12.5 trillion.

“The single biggest asset in most people’s portfolio is the home they own,” said Crowe. “That’s important because the primary purchasers of new homes are the sellers of existing homes. The more equity they have, the more comfortable they feel about purchasing a new home.”

And while mortgage interest rates are expected to rise over the near-term, averaging 4.5% in 2016 and 5.5% in 2017, Crowe said this is not expected to have an impact on the housing recovery. “As the economy gets better, job and wage growth should keep pace. So even though mortgage rates will rise, they will still be low by historical standards and very affordable.”

Supply Headwinds

Crowe noted several factors that are hindering a more robust recovery. Citing an NAHB survey of its members, 13% of builders reported the cost and availability of labor was a significant problem in 2011 and that concern jumped to 61% in 2014.

About one-fifth of builders shared the same concerns regarding lots in 2011 and that ratio shot up to 58% in 2014. Concerns over building materials stood at 58% among builders in 2014, up from 33% in 2011.

Single-Family Continues to Post Gains

Turning to the forecast, NAHB is projecting 719,000 single-family starts in 2015, up 11% from the 647,000 units produced last year. Single-family production is projected to increase an additional 27% in 2016 to 914,000 units.

On the multifamily side, production ran at 354,000 units last year, slightly above the 331,000 level that is considered a normal level of production. Multifamily starts are expected to rise 9% to 387,000 units this year and post a modest 3% decline to 378,000 units in 2016.

Residential remodeling activity is forecasted to increase 6.8% in 2015 over last year and rise an additional 6.1% in 2016.

FHFA House Price Index Up 0.3 Percent in August

U.S. house prices rose in August, up 0.3 percent on a seasonally adjusted basis from the previous month, according to the Federal Housing Finance Agency (FHFA) monthly House Price Index (HPI). The previously reported 0.6 percent increase in July was revised downward to reflect a 0.5 percent increase.

The FHFA HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. From August 2014 to August 2015, house prices were up 5.5 percent. The U.S. index is 0.9 percent below its March 2007 peak and is roughly the same as the December 2006 index level.

For the nine census divisions, seasonally adjusted monthly price changes from July 2015 to August 2015 ranged from -0.4 percent in the East North Central and Middle Atlantic divisions to +0.8 percent in the East South Central division. The 12-month changes were all positive, ranging from +2.2 percent in the Middle Atlantic division to +8.3 percent in the Mountain division.

EPA Launches Online Permit Program

Beginning Dec. 21, the Environmental Protection Agency (EPA) will require builders to submit their National Pollutant Discharge Elimination System (NPDES) program information online, replacing the current paper-based reporting system.

This rule does not require online submission of Stormwater Pollution Prevention Plans, or SWPPPs. It does, however, apply to forms such as the Notice of Intent for coverage, Notice of Termination and Low Erosivity Waivers.

NAHB has long supported EPA’s effort to develop an online reporting rule. “Since permit coverage is usually expedited when done electronically, we are hopeful that bringing clean water reporting out of the Dark Ages will save builders time and money,” said NAHB Environmental Issues Committee chair Geep Moore. “However, there is still work to be done to ensure that certain types of sensitive data are handled correctly and efficiently.”

In its comments to EPA, NAHB voiced concern that, under this rule, builders might have to “double report:” submit online to EPA while still submitting paper forms to a state regulator if their state failed to meet strict electronic reporting implementation deadlines.

The final rule promises to solve this problem by allowing states to not require any additional forms from builders until its online reporting process is working. So this “switching” of whom to report to doesn’t cause confusion for permitees, EPA will seek to ensure that, regardless of whether EPA or the state is supporting the database, builders will still report their information via familiar state Web portals.

NAHB also convinced EPA to give states five years, rather than only two, to get their online permit collection systems up and running.

Where Reporting is a Problem

NAHB was also concerned about builders working in rural areas where Internet access is often spotty at best. Under EPA’s original proposal, temporary waivers for such issues would be available for only one year at a time. In the final rule, EPA now allows each state or authorized NPDES program to extend the maximum waiver time to five years: another NAHB victory for members.

Stakeholders also voiced concern over requiring builders to use expensive authentication software to submit certified electronic signatures on compliance documents. (A signature is required by law.)

Under the final rule, construction site operators can either submit a certified electronic signature or submit all paperwork electronically without a certified electronic signature, as long as they also send a signed hard copy of electronic forms.

Moving to online permits means an increased potential for false or incomplete enforcement data to be published and released via public websites: a security and confidentiality issue raised by NAHB on behalf of its members. NAHB will work closely with states to ensure that builders and developers have ample opportunity to address potential misrepresentations of data, and that clear systems allow permittees to expediently address any reporting errors.

President-Elect Joe Hoover Asks You to Serve on a Committee

Want to help make your association better, smarter, and more relevant? Join a Home Builders Association Committee and let your voice be heard.

To learn more about the different committees we have, click here to see the list and committee descriptions. Once you've found the one you feel best suited for, email Michael Dey at mdey@hbaofgreenville.com and state your committee preference.

Don't want to serve on a committee but still want to volunteer? Send Michael an email with your areas of interest. The board forms task forces on a regular basis that handles a specific task and then disbands. Your association will be grateful for your help.

If you'd like to hear more about volunteer opportunities within the HBA, please come to our New Member Reception and Meet the Board event sponsored by Pestban on November 5. Arrive at 4:30 p.m. to hear from some of the current chairs of the committees before the rest of the festivities begin at 5:30.