May 2022
Worsening Affordability Conditions Dim New Home Sales
Worsening affordability conditions stemming from growing supply chain disruptions and rising mortgage rates pushed new home sales lower in March. Sales of newly built, single-family homes in March fell 8.6% to a 763,000 seasonally adjusted annual rate from an upwardly revised reading in February, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. New home sales are down 12.6% compared to March 2021. A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construc- tion: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the March reading of 763,000 units is the number of homes that would sell if this pace continued for the next 12 months. New single-family home inventory was up 52.4% over last year, rising to a 6.4 months’ supply, with 407,000 available for sale. However, just 35,000 of those are completed and ready to occupy. The median sales price rose to $436,700 in March from $421,600 in February and is up more than 21% compared to a year ago, due primarily to higher production costs, including materials. Regionally, on a year-to-date basis, new home sales fell in two regions, down 9.2% in the Midwest and 13.9% in the South. New home sales were up 10.5% in the Northeast and 8.5% in the West.
DOL Proposes New Prevailing Wage Rules The Labor Department has proposed new rules that would change "prevailing wage" standards for feder- al construction projects. NAHB opposes the changes. On March 18, the DOL’s Wage and Hour Division issued a proposed rule to amend the regulations implementing the Davis-Bacon and Related Acts (DBRA). The agency proposes to change the definition of "prevailing wage" by returning to the original methodology used to determine Davis- Bacon wage rates.
NAHB, HUD Sponsoring Housing Showcase NAHB and the U.S. Department of Housing and Urban Development are jointly sponsoring the Innovative Housing Showcase, a three-day event featuring new building technologies and housing solutions that are making housing more innovative, resilient and affordable for American families. Taking place June 10-12 on the National Mall in Washington, D.C., the event is expected to draw more than 2,500 people, including policymakers, housing industry representatives, media and the general public. Survey Shows Support for Production Incentives Americans expressed support for government initiatives to facilitate production of more housing, with 82% agreeing in a recent survey that policymakers should factor in housing affordability when consi- dering new legislation and regu- lations. The survey results and key economic data can be found on NAHB’s updated Housing Portal. Some 66% of survey respondents said government should provide incentives to private builders and developers to create more housing that is affordable to low- and moderate-income households.
NAHB Members Send Letter to Biden More than 10,000 NAHB members from all 50 states, the District of Columbia and Puerto Rico sent a letter to President Biden on April 27 calling on the White House to take immediate action as the growing housing affordability crisis pushes the housing market to an inflection point that threatens to derail the current housing and economic expansion. NAHB — through its powerful grassroots — called for meaningful steps to enable builders to increase the supply of affordable single-family and multi- family for-sale and for-rent housing.
Join NAHB's 2022 Legislative Conference NAHB members will have the opportunity to discuss how the supply chain is impacting their bottom line with their members of Congress during the 2022 Legislative Conference on Wednesday, June 15, in Washington, D.C. The Legislative Conference, NAHB's most important grassroots event of the year, is a day-long event that coincides with NAHB’s Spring Leadership Meetings. Registration for NAHB's Spring Leadership Meetings and the Legislative Conference is now open.
Remodeling Market Index Remains Strong
Builder Confidence Falls Rising interest rates, ongoing home price increases and higher construction costs continue to take a toll on builder confidence and housing affordability. Builder confidence in the market for newly built single-family homes moved two points lower to 77 in April, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released in late April. This is the fourth straight month that builder sentiment has declined. The decline is driven in part by rising mortgage interest rates, which have jumped more than 1.9% since the start of the year and currently stand at 5%, the highest level in more than a decade.
2022 NAHB Chairman Jerry Konter
The NAHB/Westlake Royal Remodeling Market Index (RMI) for the first quarter of 2022 posted a reading of 86, unchanged from the first quarter of 2021. The finding shows residential remodelers’ confidence in their markets, for projects of all sizes. “Business remains strong for most remodelers at the beginning of 2022,” said NAHB Remodelers Chair Kurt Clason, a remodeler from Ossipee, N.H. “However, a few are starting to report that customers are reluctant to move forward on projects due to the delays and higher costs caused by supply chain problems.” The RMI survey asks remodelers to rate five components of the remodeling market as “good," “fair" or “poor.” Each question is measured on a scale from 0 to 100, where an index number above 50 indicates that a higher share view conditions as good than poor.
Introducing Girls to Construction Girl Scouts across the country can now participate in an exciting new patch program, The House That She Built, designed to empower girls to think about STEAM and construction by meeting real professional women in building. This program is inspired by the team of women from NAHB’s Utah Chapter of Professional Women in Building Council who came together to build a one-of-a-kind home in Utah: The House That SHE Built. The intent of this patch program is to build self-esteem and develop skills through curiosity and hands-on activities. The patch program, hosted by the Girl Scouts of California’s Central Coast, is available to all Girl Scouts across the country.
2022 GCBA Officers and Directors OFFICERS PRESIDENT Rafael Roca, DR Horton 1ST VP Michael Nunziata, 13th Floor Homes 2ND VP Frank Coppola, Coppola Brothers LLC ASSOCIATE VP Tony Macaluso, Universal Engineering Sciences VP FINANCE Steve Karp, Melamed & Karp PA IMMEDIATE PAST PRESIDENT Fred Pfister, Toll Brothers DIRECTORS Mark Richards, Stock Custom Homes Herb Tremble, Master Contractors & Subcontractors Assoc. of FL. Karl Albertson, DR Horton Mark Welsh, Lennar Jon Long, Ryan Homes Steve Dassa, Mattamy Homes Ethan Nelson, UMI Stone Peggy West, Capitol Lighting PRO Rick Baxter, Localiq (Palm Beach Post) Mark Anderson, US Bank Executive Officer: KT Catlin Design: Gregory J. Del Deo
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Calendar of Events Check GCBA's Monday eMail for current Location & Registration Information. Masks are recommended if vaccinated for all indoor events.
May 26 – GCBA Golf Outing June 1-3 – Ready To Work Boot Camp and Career Fair June 14-18 – NAHB Spring leadership & Legislative Conference June 22 – GCBA Board Meeting & Hard Hat Happy Hour August 3-4 – SEBC Orlando August 25 – Hard Hat Happy Hour September 21 – GCBA Board Meeting September 29 – PRISM Awards October 20 – GCBA Annual Meeting & Hard Hat Happy Hour October 24-27 – NAHB Fall Boards November 18 – 2nd Annual Chili Cook Off December 13 – 9 Wine & Dine & Hard Hat Happy Hour
Half of payroll workers in construction earn more than $49,070, and the top 25% make at least $75,820, according to the latest May 2021 Bureau of Labor Statis- tics (BLS) Occupational Employment and Wage Statistics (OEWS) and NAHB analysis. In comparison, the U.S. median wage is $45,760, with the top quartile (top 25%) making at least $68,590. The top two highest paid occupations in construction are CEOs and lawyers, making more than $162,390 and $152,650 per year, respectively. Out of the next 13 highest paid trades in construction, 12 are various managers. The highest paid managers in construction are architectural and engineering managers, with half of them making more than $135,900 annually. Among construction trades, elevator installers and repairers top the median wages list, with half of them earning more than $98,600 a year and the highest paid 25% making at least $120,950. First-line supervisors of construction trades are third on the list, with median wages of $72,600 and the top 25% highest paid supervisors earning in excess of $91,310. In general, construction trades that require more years of formal education, specialized training or licensing tend to offer higher annual wages. Median wages of construction and building inspectors are $61,360, and the wages in the top quartile of the pay scale exceed $78,940. Half of plumbers in construction earn more than $59,810, with the top quartile making more than $78,190. Electricians' wages are similarly high. Carpenters are one of the most prevalent construction crafts in the industry. Although the trade requires less formal education, the median wages of carpenters working in construction exceed the national median. Half of these craftsmen earn more than $48,420, and the highest paid 25% make at least $62,370.
Highest Paid Occupations in Construction
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GCBA 2022 TOP RECRUITERS Michele Mockenhaupt – 7 KT Catlin - 7 Rafael Roca – 5 S. Robert August –2 Ray Puzitiello – 1 Beth Cohen – 1 Kate Nordstrom – 1 Jay Huebner - 1 Herb Tremble – 1 Jamil Mikati – 1 Kathy Macaluso – 1 Michael Brown – 1 Peggy West – 1 Gary Brown – 1 Tom Corona - 1 GCBA SPIKE CLUB Members reach the GCBA Spike Club once you recruit 5 or more members in the current year. GCBA Spike Club Members will be recognized at Board Meetings & more!
BUILDERS Timothy Stepanek Stepanek inc, Remodeling Services Maria Camporeale Forestar Group Inc. ASSOCIATES Tahsin Gurdogan AllTrust Title & Escrow Randy Seltz TD Bank Nick Luciano Illumination FL Gary Akridge Aterra Designs Beth Rappaport Campbell Property Management AFFILIATES Richard Gasbarro Nustar Building Materials, LLC If you sponsored one of these individuals please let KT or Robin know! We will be having year long contests and recognition for Recruiting & Retention!
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Registration is open for SEBC 2022! You don’t want to miss this year’s event, including the return of the New Southern Home and Live Demonstration Stage. With more than 300 exhibitors and five different continuing education tracks to choose from, the opportunities to advance your career are endless! Get all the details at twww.sebcshow.com or click the button below to register now! Don't forget your hotel room, the room block is filling quickly!
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Demand in South Florida Will Stay Strong, Despite Higher Mortgage Rates By Brad Hunter For most of our careers, we have been in an environment of falling mortgage rates. Now, suddenly, we are entering a phase of rising mortgage rates, which suddenly are at the highest level since 2010. Going forward there will be a tug-of-war between huge demand growth from a demographic perspective, and declining affordability. For most buyers, especially starter families, it’s all about the monthly payment.The monthly payment on a $300,000 loan at 5% comes to about $1,610, excluding taxes and insurance.At 3.04%, where the average mortgage rate was a year ago, the payment would have been $1,371 (calculations from LendingTree). Some buyers are now accelerating their home-buying decision in order to beat additional future increases in rates, but the long-term effect is going to be declining affordability. This means that young families who are just starting to look at the suburbs will find it increasingly difficult to afford the monthly payment associated with owning a home. And, we will be watching to see if contracts to purchase homes start getting cancelled as closing time approaches and the sticker shock of the suddenly higher rate of interest comes home to roost. Yet, on the positive side of the demand equation, household formation rates are far higher than they were a couple of years back, recently having hit 1.6 million nationwide. There is a shortage of supply relative to demand, and that is heavily driven by the shift toward family life among the massive millennial group. Even if the pace of household formations slows to 1.4 million per year, that equates to demand for more than 1.7 million new homes per year (particularly when accounting for replacement demand and second homes), and we are only building 1.6 million per year, with a rising share being multifamily apartments. There is a clear need to increase housing production, particularly single-family homes and townhomes, but construction activity is failing to keep up. People’s attitudes toward homebuying have taken a turn as well.Only 30% of adults nationwide now say it is a good time to buy a home, down 23 percentage points from a year ago (Gallup Poll).That is the first time the share has been below 50% since the question was first asked by Gallup in 1978. But this is all being offset by The Great Migration from New York to Florida. And this is not a temporary or one-time Covid-driven exodus. This migration was well under way before the pandemic, and has only been accelerated by the work-from-home (and work-from-anywhere) shift.I see the trend continuing, and I believe that the massive influx of people moving down from New York will continue to fuel strong demand in South Florida, across all price ranges. The largest demographic group ever is just entering its prime family-forming and home-buying years. The peak age range for forming families (having babies) nowadays is age 34-37, and the peak of the millennial bulge is just starting to move into this child-rearing age range.The oldest millennials have already moved through this age range, and many of them have by now formed their families, but the largest “chunk” of this population will just be getting there during the next five years. More housing must be built in South Florida and nationwide, in order to meet the needs of young families as well as move-up buyers, new residents from New York, empty nesters and retirees. The next several years will feel like catching up with demand, or trying our hardest to do so.
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