Home Builder and Remodeler Cost Breakdown

An analysis of the latest Economic Census data by NAHB economist Natalia Siniavskaia shows that, on average, residential construction establishments were able to cover their hard and soft construction costs and generate positive profits in 2012.

The 2012 data show that the direct costs of construction – consisting of construction payroll, costs of construction work subcontracted out to others, and costs for materials/supplies – vary from 65% of total revenue of specialty trade contractors to 87% of the business receipts of multifamily general contractors without land costs. For single-family general contractors (who build on land customers own), the direct costs of construction consume on average 81% of the total revenue.

For single-family general contractors, 7% of total business receipts go to pay wages of construction workers. Specialty trade contractors, who maintain larger construction payrolls and subcontract out a minimum amount of work, spend on average 19% of total revenue on construction payroll.

In sharp contrast, multifamily general contractors who subcontract out most of the work, spend only 3% on the construction payroll. Their biggest expenditure is the cost of construction work subcontracted out to others, 63% of the total revenue. This far exceeds the typical spending by single-family general contractors on subcontractors, which amounts to 36% of outlays.

For a more detailed breakdown, click here.

Builder: new home sales are 13.1 percent of total home sales

According to Builder magazine, new home sales were 13.1 percent of total home sales in October 2013, up slightly from 12.8 percent in September 2012.  While up, new homes as a percentage of total sales is significantly lower than other markets like Charlotte and Columbia, where the new home sales market share is closer to 20 percent.

One fifth of all new housing is infill

Did you know: 21 percent of all new housing is infill development?

Source: Builder

David Crowe: Materials prices up 5 percent in 6 months

According to David Crowe, PhD., NAHB Chief Economist, material prices in a typical new home have increased five percent in the last six months. In addition, he says prices are up even more in the South and Southwest than the rest of the country.

Crowe reports that the increase in materials costs equates to an $8,500 increase in the cost of a new home. He said builders report increases in framing lumber, OSB, plywood, gypsum, trusses, ready-mix concrete, roofing materials, and cement.

Crowe said the information is the result of a survey of HBA members conducted by NAHB.

Read the complete report at builderonline.com by clicking here. Builderonline is the website for Builder, a magazine that each HBA member receives as a benefit of membership in the Home Builders Association.

Builder: Greenville New Home Sales Continue to Rise, but More Slowly

According to Builder magazine, new home sales continued to rise, but the pace of growth is slowing a bit.  According to Builder's data, new home sales grew 21.3 percent in October, compared to the same month in 2010.  That growth follows a 48.6 percent increase the month before.

New home sales made up 15.7 percent of all home sales in October, up 12.5 percent in October 2010.

You can review Builder's report for Greenville at builderonline.com by clicking here.

Builder: Mungo Company named America's Best Builder

The Mungo Company has been named 2012 America's Best Builder in the category with the highest number of closings.  Four categories are honored in the America's Best Builder program.

Read the entire release on the America's Best Builder honor of the Mungo Company at mungo.com by clicking here.

BuilderOnline: 81 percent of Americans Say Homeownership is Still Part of the American Dream

A recent survey by Yahoo! Real Estate found that 81 percent of American still consider homeownership art of the American Dream.  In addition , 74 percent consider buying a home a good investment.

Read the results of the Yahoo! survey at BuilderOnline.com by clicking here.

Builder: "New Home Sales Suggest Climb Gaining Steam" in Greenville

A recent report by Builder magazine show that sales of new homes increased year-over-year in August, as well as for July.  The improvement suggests that "the market may be gaining momentum" in the Greenville-Mauldin-Easley MSA.

New home sales rose 41.6 percent in August, to 109, compared to 2011, and rose 32.3 percent in July, compared to the same month last year.  For the 12 months ending in August 2011, 949 new homes were sold, up from an annualized 917 in July.  However, out of all housing sales, new home sales made up just 14.5 percent of sales, although that is a rise from 11 percent in August 2010.

Big Box Homes?

BUILDER magazine featured super-size homes, and the builders who have profited from them, in an article on builderonline.com.  From the article:

"...the big-box home trend was born as a way to compete with resales because it is rare to find large homes among resales and foreclosures, making their plus-size a product differentiator. Also, the larger homes can often pass muster with appraisers more easily, because the bigger the house, the smaller the square-foot price, and the higher-priced portions of the home, kitchens and bathrooms, are amortized over a larger number of square feet. The lower price per square foot helps the homes compete with the lower per-square-foot cost of distressed home sales."

Read the entire article at builderonline.com by clicking here.

Housing is the key to our nation's economic recovery

Home building's economic multiplier effect, according to NAHB's chief economist David Crowe:

"Building 1,000 single-family homes creates 3,000 jobs, half in construction and half in support industries such as appliances, carpets, building materials, banking, etc. Single-family construction has dipped below 500,000 but underlying demographic demand requires 1.5 million single-family homes a year. The one million homes in lost production means a loss of three million jobs.

In addition to the lost economic activity from building homes, families moving into new homes would normally spend more than non-moving families on furnishings, decorations, landscaping, and other improvements. At roughly $5,000 per new home, an additional $5 billion in economic activity has been lost each year because of the new building slowdown."

Is there any question that housing is the key to our economic recovery?

Read David Crowe's complete report at BuilderOnline.com by clicking here.

South Carolina's Mungo Homes Remains 35th Largest Builder

The Mungo Companies has maintained its ranking as the 35th largest builder in the country according to Builder magazine. Mungo’s ranking is in the annual Builder 100 edition and, based on closings, ranks all public and privately held builders from across the country.

Read the article on Midlandsbiz by clicking here.

View Builder's Top 100 list by clicking here.

The Changing Nature of Home Building Companies

"Builders have remolded their businesses, and the ones left are a bit larger and stronger." David Crowe, Chief Economist, NAHB

According to research conducted by NAHB, the percentage of Builder members listing their primary business as single-family building has dropped to 59 percent in 2010 from 66 percent in 2008. Gaining during that period was Remodeling, up to 27 percent in 2010 from 20 percent in 2008, "confirming that builders sought other revenue avenues close to their expertise" during the downturn, Crowe said.

Source: Builder, June 2011.