Total private residential construction spending increased to a seasonally adjusted annual rate of $340.2 billion in August 2013 according to Census estimates. The August data for construction put in place data was released today after a delay of three weeks due to the government shutdown. The current reading is a 1.2% increase from the prior month and 18.7% higher than a year ago. After a tepid July, the pace of growth in construction spending improved in August.
Total private residential construction spending is at its highest level since August 2008. Since market low points, total private residential construction spending is up 48.9%, single-family 88.5%, multifamily 146.6%, and improvement-related spending 30.7%. Spending continues to improve for all categories, but remains well below their respective peaks.
Single-family spending registered an increase of 1.6% for the month, while the multifamily category saw a healthy increase of 3.2%. The home improvement category remained relatively flat with an increase of just 0.2% for the month.
For August, on a 3-month moving average basis, all categories continued to experience significant improvements over the course of 2013. Remodeling related spending is up 8.4% for the year-to-date. Single-family spending has increased by 12.9% and multifamily spending has increased 15.8%.
The data show improvements in construction for all categories. However, the government shutdown had yet to occur and is not reflected in the August data. A revised schedule posted by the Census indicates that September data for construction put in place will also be delayed one month. The September and October data are scheduled for release on the same date – December 2. This release should provide us with a better picture of construction spending moving forward.
Wednesday, October 30, 2013
Avoid Electrical Inspection Failure on Your Next Project
Top Electrical Code Violations for Residential Permits
Source: City of Greenville
According to Buddy Skinner, City of Greenville Assistant Building Codes Administrator, 25 percent of all electrical inspections on single family residential projects fail. Below is a list of the top reasons for inspection failures:
Source: City of Greenville
According to Buddy Skinner, City of Greenville Assistant Building Codes Administrator, 25 percent of all electrical inspections on single family residential projects fail. Below is a list of the top reasons for inspection failures:
- Receptacle outlets should be located so that one can be reached within 6-feet measured along the wall surface in either direction. Outlets should also be located on any wall space 2-feet or larger. (2012 International Residential Code E3901.2)
- Receptacle outlets on kitchen counters should be located so that one can be reached within 2-feet measured along the wall surface in either direction. Outlets need to be installed above any kitchen counter 12-inches or wider. (2012 IRC E3901.4)
- Seal all drilled or notched holes in top and bottom plates with an approved material. (2012 IRC R302.11)
- Any neutral conductors (white in color) used as a phase conductor for a 220-volt circuit should be marked with black tape. This is commonly seen on conductors feeding a water heater or mechanical unit. (2012 IRC E33407.1 and E3407.2)
- Receptacles cannot be installed within or directly over a bathtub or shower stall. (2012 IRC E4002.11)
- No light fixture or fan can have suspended parts within 3-feet horizontally or 8-feet vertically from the top of the bathtub rim or shower stall threshold. (2012 IRC E4003.11)
- Watch the number of conductors that are installed in electrical boxes. A standard 20-cubic inch nail-on electrical box can have two romex wires and a device. A 22-cubic inch nail-on electrical box can have three romex wires and a device (2012 IRC E3905.12)
- Provide at least 6-inches of wire for device connection at each electrical box. (2012 IRC E3406.11.3)
- Arc-fault circuit protection is required for all circuits within a dwelling except for those required to be ground-fault protected. Wiring that supplies only smoke detectors do not have to be arc-fault protected. (2012 IRC E3902.12)
- In new dwelling units that have attached garages or fuel-fired appliances, carbon monoxide alarms must be installed outside each separate sleeping area near the bedroom or bedrooms. (2012 IRC R3015)
- Make sure that the bonding device is properly installed on all temporary power poles. (2012 IRC E3609)
- Where rebar is installed in footings, a bonding jumper must be connected from the rebar to the ground in the panel box. (2012 IRC E3608.1.2)
- Tabs in plastic boxes are designed to secure conductors and should not be removed. (2012 IRC E3403.3)
- Outdoor receptacles are required at grade level (not higher than 6’6’’) at the front and back of every dwelling and on every porch and balcony. (2012 IRC E3901.7)
- Observe burial depth requirements for underground cables and raceways (2012 IRC Table E3803.1)
- Nonmetallic cable (Romex) can only be used in dry locations (2012 IRC Table E3801.4) Note: Romex cannot be used in conduit outside to feed a mechanical unit.
- Ground-fault protected outlets are required in the crawl space and basement. (2012 IRC E3902.4 and 3902.5)
Tuesday, October 29, 2013
FHFA Index Shows Mortgage Interest Rates Continue to Rise in September
National data show interest rates on mortgages continued their upward trend. Contract mortgage interest rates increased 0.11 percent from August to September, according to an index of new mortgage contracts.
According to the Federal Housing Finance Agency (FHFA), the National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders index was 4.38 percent for loans closed in late September. The index is calculated using FHFA’s Monthly Interest Rate Survey. The contract rate on the composite of all mortgage loans was 4.36 percent, up 11 basis points from 4.25 in August.
Interest rates are typically locked in 30-45 days before a loan is closed. Consequently, September data reflect market rates from mid-to-late August. The effective interest rate was 4.51 percent, up 11 basis points from 4.40 percent in August. The effective interest rate accounts for the addition of initial fees and charges over the life of the mortgage.
FHFA’s interest rate survey shows the average interest rate on conventional, 30-year, fixed-rate mortgages of $417,000 or less was 4.63 in September, an increase of 14 basis points. The average loan amount for all loans was $270,100 in September down $4,400 from $274,500 in August.
According to the Federal Housing Finance Agency (FHFA), the National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders index was 4.38 percent for loans closed in late September. The index is calculated using FHFA’s Monthly Interest Rate Survey. The contract rate on the composite of all mortgage loans was 4.36 percent, up 11 basis points from 4.25 in August.
Interest rates are typically locked in 30-45 days before a loan is closed. Consequently, September data reflect market rates from mid-to-late August. The effective interest rate was 4.51 percent, up 11 basis points from 4.40 percent in August. The effective interest rate accounts for the addition of initial fees and charges over the life of the mortgage.
FHFA’s interest rate survey shows the average interest rate on conventional, 30-year, fixed-rate mortgages of $417,000 or less was 4.63 in September, an increase of 14 basis points. The average loan amount for all loans was $270,100 in September down $4,400 from $274,500 in August.
Friday, October 25, 2013
Building With Next Gen: Attracting and Retaining Gen X/Gen Y Employees
By Juli Bacon
If you are used to working with your hands and using tools for your craft, you may wonder how you are going to teach the younger generation the tricks of the home-building trade. If you are in a supporting business in the construction industry, you may have also found yourself frustrated by the new generation’s constant reliance on technology. You watch them texting on their phones, checking their Facebook page, playing on their iPads and watching television all at the same time. Electronic gadgets are their tools.
Rather than think of this as a problem, think of it as an opportunity. Generation X (Gen Xers) and Generation Y (Millennials) are your new workforce. Learning to work with their unique style and tapping into their specific skills just may give you the edge on your competition as labor shortages become the norm in the construction industry.
Looking back through the generations, I imagine that we would hear some common phrases used in one form or another such as: “kids today….”, “I don’t know how this company will survive with the next generation”, “This new generation doesn’t know what work is!” The cold hard truth for current and future business owners; however, is that if you do not learn how to work with each “new” generation, your company will not survive. The construction industry can ill afford to miss an opportunity for new labor. Those who take the time to listen and learn from the Gen Xers and Millennials will have an advantage when the labor shortage is hitting their competition. If you, as an employer, take the time to learn what drives them rather than making assumptions about their work ethics based on their seeming desire for “wasting time” on Facebook and other technology, you will increase your chances of attracting and retaining employees.
Understanding some basic background, characteristics and traits of each generation is the first step in attracting and retaining the Gen Xers and Millennials. Of course, employers need to look at the individual and avoid stereotyping, as each person’s upbringing and unique experiences shape the way he or she lives and works.
Gen X: No Hand-Holding Needed
Gen Xers, typically born between 1965 and 1977 (some say up to 1980), are the children of Baby Boomers, a generation that believes in working hard, paying your dues, and working your way to the top with or without an education. Some Baby Boomers became teenagers in the 1960s and created their own upheaval in America with their “wild” ways. However, they were mellowed by double-digit unemployment, starting families and new responsibilities.
Gen Xers’ parents typically lived to work and were defined by their work. They were dedicated to their jobs and loyal to their employers. Gen Xers were the first children to grow up with two working parents. The first latchkey kids, they came home from school to empty houses. They had to learn to be self-reliant; they did their homework without help, took care of their younger sibling(s) and cooked for themselves. They saw their parents divorce, often more than once. Their parents’ loyalty to their employers crumbled with corporate scandals that depleted their retirement accounts.
Gen Xers were shaped by myriad events that occurred while they were growing up; from the assassination of Robert Kennedy to the fall of the Berlin Wall; from the beginning of the AIDS crisis to the savings and loan crisis; from the Vietnam War to the Persian Gulf War. They saw the rise of the computer age. They remember rotary telephones, eight-track and cassette tapes and DOS-based computer systems.
Generation X Characteristics and Traits
Gen Y: Let’s Do This Together
Millennials, born in the mid to late 1970s up to mid to late 1990s, have been referred to as the “Me” generation. Millennials are the children of late-end Baby Boomers and early Gen Xers. Their parents negotiated with them and gave them choices rather than consequences. They were told everything they did was great, and everyone on their team received a trophy. Their parents kept them busy with endless extracurricular activities and team sports. They often have good relationships with their parents and may live with their parents until they are married. They went to college and their parents paid for it.
They don’t just use technology, they embrace it. They grew up with it, use it regularly, rely on it, and seem to be unable to live without it. They often work to buy more electronic gadgets and to play. For Millennials, technology is an integral part of their lives and they use it to make their life more pleasant and to make their work easier.
Millennial Characteristics and Traits:
Teach them the trade skills of your business, while allowing them to put their unique spin on the execution. They can learn from you as well; for instance, there is value to staying focused on one task at a time and completing without interruption. New ideas and new approaches are crucial to the survival of any business and especially for construction. You will always need the artisans, but you need the new ideas and excitement of the current generations.
The construction industry is facing serious labor shortages. Embrace the change now and get used to it because Generation Z— as the toddlers who are playing with their parents’ smart phones are called — will be entering the workforce before you know it. Who knows what challenges they will bring to the table.
This article first appeared in Building Women magazine, a publication of NAHB Professional Women in Building.
If you are used to working with your hands and using tools for your craft, you may wonder how you are going to teach the younger generation the tricks of the home-building trade. If you are in a supporting business in the construction industry, you may have also found yourself frustrated by the new generation’s constant reliance on technology. You watch them texting on their phones, checking their Facebook page, playing on their iPads and watching television all at the same time. Electronic gadgets are their tools.
Rather than think of this as a problem, think of it as an opportunity. Generation X (Gen Xers) and Generation Y (Millennials) are your new workforce. Learning to work with their unique style and tapping into their specific skills just may give you the edge on your competition as labor shortages become the norm in the construction industry.
Looking back through the generations, I imagine that we would hear some common phrases used in one form or another such as: “kids today….”, “I don’t know how this company will survive with the next generation”, “This new generation doesn’t know what work is!” The cold hard truth for current and future business owners; however, is that if you do not learn how to work with each “new” generation, your company will not survive. The construction industry can ill afford to miss an opportunity for new labor. Those who take the time to listen and learn from the Gen Xers and Millennials will have an advantage when the labor shortage is hitting their competition. If you, as an employer, take the time to learn what drives them rather than making assumptions about their work ethics based on their seeming desire for “wasting time” on Facebook and other technology, you will increase your chances of attracting and retaining employees.
Understanding some basic background, characteristics and traits of each generation is the first step in attracting and retaining the Gen Xers and Millennials. Of course, employers need to look at the individual and avoid stereotyping, as each person’s upbringing and unique experiences shape the way he or she lives and works.
Gen X: No Hand-Holding Needed
Gen Xers, typically born between 1965 and 1977 (some say up to 1980), are the children of Baby Boomers, a generation that believes in working hard, paying your dues, and working your way to the top with or without an education. Some Baby Boomers became teenagers in the 1960s and created their own upheaval in America with their “wild” ways. However, they were mellowed by double-digit unemployment, starting families and new responsibilities.
Gen Xers’ parents typically lived to work and were defined by their work. They were dedicated to their jobs and loyal to their employers. Gen Xers were the first children to grow up with two working parents. The first latchkey kids, they came home from school to empty houses. They had to learn to be self-reliant; they did their homework without help, took care of their younger sibling(s) and cooked for themselves. They saw their parents divorce, often more than once. Their parents’ loyalty to their employers crumbled with corporate scandals that depleted their retirement accounts.
Gen Xers were shaped by myriad events that occurred while they were growing up; from the assassination of Robert Kennedy to the fall of the Berlin Wall; from the beginning of the AIDS crisis to the savings and loan crisis; from the Vietnam War to the Persian Gulf War. They saw the rise of the computer age. They remember rotary telephones, eight-track and cassette tapes and DOS-based computer systems.
Generation X Characteristics and Traits
- Self-reliance, resourcefulness and working independently
- Adaptable to change
- Little patience for meetings without purpose
- Comfortable with technology
- Desire for a challenging workplace with accountability
- Emphasis placed on the quality of the work and accomplishing the work rather than the number of hours worked
- High value on family and personal time and working to live rather than living to work. Seek companies with work/life benefits.
- More likely to ask for flexible schedules to meet family needs or ask to work from home
- Creating a work/ life balance in their workplaces. Employers need to set aside the idea that if they don’t see the employee, they aren’t working. Gen Xers have strong work ethics, but will not sacrifice their family life for it. They like the ability to work from home if needed.
- Challenge them with interesting projects, make sure they understand the deliverables, performance measures, and then get out of their way. They may find a faster, more efficient way of completing the task that increases production and efficiencies.
- Invest in technology to help them complete their jobs in a timely manner; take time to ask what tools the Gen Xers would use.
- Appoint them as team leaders and let them do the leading.
- Allow for flexible schedules, ability to work from home as it pertains to their jobs. Reward them with additional paid time off.
- Motivate by direct positive feedback, while providing clear direction and goals to be met. Quarterly, to annual, performance evaluations are important. However, Gen Xers will need immediate feedback on their assigned projects to keep moving and complete their work.
Gen Y: Let’s Do This Together
Millennials, born in the mid to late 1970s up to mid to late 1990s, have been referred to as the “Me” generation. Millennials are the children of late-end Baby Boomers and early Gen Xers. Their parents negotiated with them and gave them choices rather than consequences. They were told everything they did was great, and everyone on their team received a trophy. Their parents kept them busy with endless extracurricular activities and team sports. They often have good relationships with their parents and may live with their parents until they are married. They went to college and their parents paid for it.
They don’t just use technology, they embrace it. They grew up with it, use it regularly, rely on it, and seem to be unable to live without it. They often work to buy more electronic gadgets and to play. For Millennials, technology is an integral part of their lives and they use it to make their life more pleasant and to make their work easier.
Millennial Characteristics and Traits:
- Often those that are “caught” on Facebook or texting at work, but they are actually managing their workload, as well as managing their busy electronic social lives.
- Make good team players and like working in teams, but that may not be a face-to-face team. They may want to work via web-based tools such as Skype or video conferencing. They will instant message or text a colleague in the next cubicle rather than get up and meet with them face-to-face.
- Appreciate mentors that don’t preach to them, but rather those that gently guide them with questions and choices.
- Need regular, and consistent, positive reinforcement on a daily, weekly, or monthly basis. They need to be told when they are doing a good job.
- They ask first about the money or benefits of a job rather than about the company.
- Lack loyalty to an employer that stifles their creativity or will not allow them the use social media or electronic devices in the workplace.
- Creating social media and electronic media usage policies, with generous allotment of time for personal use, provided their essential job functions are completed in a timely manner.
- Create a team-based atmosphere and provide recognition and reward for a job well done.
- Invest in cutting-edge technology with input from the Millennials.
- Assign mentors to new employees, with specific instructions to the mentors on how to guide the new employee.
- Enlist Millennials in researching new products, procedures and best practices. They may find a new program that streamlines your production process or more accurately estimates the amount of material you use on a job.
- Ask them for their input on new benefits and compensation plans and offer them something that allows them the freedom to “work to live”.
- Engage them in assisting with social media and other e-media marketing.
- Motivate them with positive reinforcement and constructive correction, rather than criticism.
Teach them the trade skills of your business, while allowing them to put their unique spin on the execution. They can learn from you as well; for instance, there is value to staying focused on one task at a time and completing without interruption. New ideas and new approaches are crucial to the survival of any business and especially for construction. You will always need the artisans, but you need the new ideas and excitement of the current generations.
The construction industry is facing serious labor shortages. Embrace the change now and get used to it because Generation Z— as the toddlers who are playing with their parents’ smart phones are called — will be entering the workforce before you know it. Who knows what challenges they will bring to the table.
This article first appeared in Building Women magazine, a publication of NAHB Professional Women in Building.
How Long Does It Take to Build a House?
The 2012 Survey of Construction (SOC) from the Census Bureau shows that on average it takes about 7 months from obtaining a building permit to completing a new single-family home. Looking at the houses completed in 2012, houses built for sale, on average, register the shortest time from permits to completion – between 5 and 6 months. Houses built on owner’s land take longer – about 8 months if built by a contractor and more than 11 months if they are owner-built (i.e., where the owner of the land serves as a general contractor). Single-family homes built for rent take, on average, between 8 and 9 months from permits to completion.
In most cases, no time is wasted from the moment a permit is obtained and construction is started. Most homes built for sale and on owners’ land are started prior or within the same month as authorization. Houses built for rent, on average, register a slight delay of one month before construction is started.
The time from permits to completion varies across the nine Census divisions. New England and Middle Atlantic register longer times of between 9 and 10 months. Pacific and East North Central division also show above average time of 8 months to completion. Builders in the East South Central Division manage to complete a home in 7 months, on average. The rest of the country registers times between 5 and 6 months.
For houses built for sale, the SOC also gathers information on sales, registered at the time when a buyer signs a sale agreement or makes a deposit on the home, not the final closing. For new single-family homes sold in 2012, the average time from completion to sale is under one month. However, this average is highly skewed by a relatively small number of homes that are not sold prior or while under construction. Looking at new single-family homes completed in 2012, more than three quarters of these properties were sold before or during the completion month, including 30 percent that were pre-sold (i.e., sold before being started). Only 6 percent of homes completed in 2012 remain unsold as of the first quarter of 2013. So, for most new single family homes there is no additional lag from completion to sale.
Remodeling Market Index Climbs For Second Quarter in a Row
The Remodeling Market Index (RMI) continued to climb at a modest pace in the third quarter of 2013 rising two points to 57, the highest reading since the first quarter of 2004, according to the National Association of Home Builders (NAHB).
An RMI above 50 indicates that more remodelers report market activity is higher (compared to the prior quarter) than report it is lower. The overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity. The RMI’s current market conditions index rose from 54 in the previous quarter to 58, the highest reading since the creation of the RMI in 2001, driven partly by rising existing home sales.
“The growth in home equity and home sales prompted home owners to remodel as they prepare to move or undertake upgrades that they put off during tough times,” said NAHB Remodelers Chairman Bill Shaw, GMR, GMB, CGP, a remodeler from Houston. “NAHB Remodelers looks forward to continuing our tradition of professional service and craftsmanship as the housing recovery makes progress.”
All three major components of the RMI’s current market conditions index increased in the third quarter. Major additions and alterations increased from 51 to 55, minor additions and repairs from 55 to 58 and maintenance and repair from 57 to 59. The future market indicators component of the RMI remained even with the previous quarter reading of 56.
Regionally, the RMI has registered two consecutive quarters of gains in the Northeast, Midwest and West. In the South, the RMI edged down slightly in the third quarter after a five point gain the previous quarter. All four regions were above 50 and higher in the third quarter than in the first quarter of 2013.
“In addition to existing home sales, which support remodeling activity as owners fix up their homes before and after a move, remodeling has benefitted from rising home values,” said NAHB Chief Economist David Crowe. “This boosts home equity that owners can tap to finance remodeling projects. We expect existing home sales and house prices to increase, but at a slower rate over the next year, so the demand for remodeling services should also increase, but more gradually over that period.”
For more information about remodeling, visit www.nahb.org/remodel.
An RMI above 50 indicates that more remodelers report market activity is higher (compared to the prior quarter) than report it is lower. The overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity. The RMI’s current market conditions index rose from 54 in the previous quarter to 58, the highest reading since the creation of the RMI in 2001, driven partly by rising existing home sales.
“The growth in home equity and home sales prompted home owners to remodel as they prepare to move or undertake upgrades that they put off during tough times,” said NAHB Remodelers Chairman Bill Shaw, GMR, GMB, CGP, a remodeler from Houston. “NAHB Remodelers looks forward to continuing our tradition of professional service and craftsmanship as the housing recovery makes progress.”
All three major components of the RMI’s current market conditions index increased in the third quarter. Major additions and alterations increased from 51 to 55, minor additions and repairs from 55 to 58 and maintenance and repair from 57 to 59. The future market indicators component of the RMI remained even with the previous quarter reading of 56.
Regionally, the RMI has registered two consecutive quarters of gains in the Northeast, Midwest and West. In the South, the RMI edged down slightly in the third quarter after a five point gain the previous quarter. All four regions were above 50 and higher in the third quarter than in the first quarter of 2013.
“In addition to existing home sales, which support remodeling activity as owners fix up their homes before and after a move, remodeling has benefitted from rising home values,” said NAHB Chief Economist David Crowe. “This boosts home equity that owners can tap to finance remodeling projects. We expect existing home sales and house prices to increase, but at a slower rate over the next year, so the demand for remodeling services should also increase, but more gradually over that period.”
For more information about remodeling, visit www.nahb.org/remodel.
Request for Information on Flood Insurance Rates
We are well aware of the shocking price increases some properties are facing for flood insurance policies in 2014. Your HBA is working to get Congress to mitigate these changes, and we may have some windows of opportunity to raise the profile of this problem with Congress in the coming weeks.
What we need, however, are some specific examples of price increases. We are aware of plenty of anecdotal stories, as is Congress, but we lack pricing information linked to a specific property.
If you are running into problems with flood insurance, you may be able to help.
What we need: is documentation showing the current policy’s rate and the new rate. We don’t need the property owner’s name but must have the address.
Any information shared with us will be shared with congressional committee staff and, very likely, FEMA. We realize this may make some property owners uncomfortable, but there is always the possibility that FEMA will review and adjust it in light of a congressional inquiry!
It would be incredibly helpful to have some documented case examples to highlight the problem.
What we need, however, are some specific examples of price increases. We are aware of plenty of anecdotal stories, as is Congress, but we lack pricing information linked to a specific property.
If you are running into problems with flood insurance, you may be able to help.
What we need: is documentation showing the current policy’s rate and the new rate. We don’t need the property owner’s name but must have the address.
Any information shared with us will be shared with congressional committee staff and, very likely, FEMA. We realize this may make some property owners uncomfortable, but there is always the possibility that FEMA will review and adjust it in light of a congressional inquiry!
It would be incredibly helpful to have some documented case examples to highlight the problem.
Subscribe to:
Posts (Atom)

