Total Housing Starts Up 15.6% in 2021
February 2022
While single-family starts dipped in Decem- ber due to ongoing supply-side challenges, they still managed to post double-digit gains in 2021. Overall housing starts increased 1.4% in December to a seasonally adjusted annual rate of 1.70 million units, according to a report from HUD and the Census Bureau. The December reading of 1.70 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts decreased 2.3% to a 1.17 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 10.6% to a 530,000 pace. Total housing starts for 2021 were 1.6 million, a 15.6% gain over the 1.38 million total from 2020. Single-family starts in 2021 totaled 1.12 million, up 13.4% from the previous year. Multifamily starts in 2021 (5+units) were up 22.1% compared to the previous year. On a regional and year-to-date basis (January through December of 2021 compared to that same time frame a year ago), combined single-family and multifamily starts are 22.2% higher in the Northeast, 10.9% higher in the Midwest, 15.3% higher in the South and 16.9% higher in the West. Overall permits increased 9.1% to a 1.87 million unit annualized rate in December. Single-family permits increased 2.0% to a 1.13 million unit rate. Multifamily permits increased 21.9% to a 745,000 pace.
FHFA Raising Fees on Second Homes In a move strongly opposed by NAHB, the Federal Housing Finance Agency (FHFA) in January announced increases for upfront fees that Fannie Mae and Freddie Mac will charge for second home mortgage loans and certain high balance mortgage loans that exceed standard conforming loan limits. These fees will significantly increase the purchase cost of a second home and some homes in high-cost areas. Beneficial pricing on the agencies’ affordable loan products will not be increased.
Sawmills Failing to Keep Pace with Strong Demand U.S. sawmills have failed to boost output at a pace sufficient to meet consumer demand for newly built homes. The lumber industry has cited ongoing challenges with labor as a key reason for the insufficient lumber production in the U.S. But Bureau of Labor Statistics data indicate that sawmill industry employment is higher than a year ago. As of October 2021, the most recent data available, sawmill employment was 90,100. This is a 2.4% increase from October 2020, or a net gain of 2,100 jobs. Resi- dential construction employment was up 4.0% or 118,500 net jobs over the same period.
 IRS Extends Relief
In Response to COVID Last summer, NAHB and other groups requested the IRS extend some of the COVID-19 relief granted one year ago. On Jan. 11, the agency released Notice 2022-05, which grants the extensions we requested, along with additional relief in response to COVID-19 related challenges. The relief includes extended compliance deadlines, as well as temporary waivers and revised compliance requirements.
Administration Withdraws Vaccine Rule The Biden Administration on Jan. 26 moved to formally withdraw its vaccine and testing mandate after the Supreme Court voted 6-3 to block OSHA from enforcing the mandate for employers with at least 100 workers. NAHB urged OSHA to withdraw the rule after the decision. NAHB had earlier filed a Petition for Review challenging OSHA’s rule and was pleased with the Supreme Court ruling, especially since it indicated that OSHA has the authority to “set workplace safety standards, not broad public health measures.â€
SCOTUS to Consider WOTUS At the urging of NAHB and other business groups, the U.S. Supreme Court has agreed to hear a challenge to the Clean Water Act that would clarify an earlier ruling from the nation’s highest court issued in 2006. In that case, Rapanos vs. U.S., the Supreme Court issued a split 4-1-4 decision regarding the definition of “waters of the United States†(WOTUS) that led to two different tests to determine jurisdictional waters.
Remodelers Show Confidence in Market at Close of 2021
Construction Wages Rising Average hourly earnings for residential building workers have been growing fast recently, driven by the tightening construction labor market. The Bureau of Labor Statistics (BLS) in January reported that the unemployment rate declined to 3.9% in December, the lowest rate since the pandemic. As the labor market remains tight, wages have increased rapidly, particularly in the residential building sector. According to a recent BLS report, average hourly earnings for residential building workers were $28.74 in November 2021, increasing 7% from $26.87 a year ago. Learn more at NAHB's Eye on Housing blog.
The NAHB/Royal Building Products Remodeling Market Index (RMI) for the fourth quarter posted a reading of 83, up four points from the fourth quarter of 2020. The finding is a signal of residential remodelers’ confidence in their markets, for projects of all sizes. The NAHB/Royal Building Products RMI survey asks remodelers to rate five compo- nents 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. “Higher home equity provided resources for home owners to improve their existing homes, supporting high demand for remodeling,†said NAHB Remodelers Chair Steve Cunningham, CAPS, CGP, a remodeler from Williamsburg, Va. “Many remodelers are completely booked well into the future, however, supply chain problems continue to delay projects and make it difficult to work off the backlog.â€
High Prices Deterring Buyers The share of adults planning a home purchase within 12 months has fallen for two consecutive quarters — dropping from 17% in the second quarter of 2021 to 16% and 15% in the third and fourth quarter, respectively — according to data from NAHB’s Housing Trends Report. The downward trend provides evidence that higher home prices and low housing availability (relative to demand) are leading some Americans to postpone their homeownership plans. Meanwhile, the share of these prospective buyers who are purchasing a home for the first time dropped for the first time since mid-2020 from 65% in the third quarter to 63% in the fourth quarter of 2021.
NAHB Chief Economist Robert Dietz recently provided this housing industry overview in the bi-weekly e-newsletter Eye on the Economy. For the first time since the early 1980s, the U.S. economy is experiencing a period of elevated inflation. Because of supply-chain issues attributable to the pandemic and a significant rise in government spending, the consumer price index (CPI) measure of consumer inflation recorded a 7% year-over-year gain in December 2021 — the highest in nearly 40 years. In contrast, during the 2010s, the CPI averaged an annual growth rate of just 1.8%. The Federal Reserve, having retired the call that these inflationary pressures would be “transitory,†is now clearly signaling tighter monetary policy ahead. The NAHB forecast sees the Fed raising the federal funds rate three times in 2022 and accelerating the pace of the taper of asset-backed security purchases. These moves will continue to cause interest rates to rise over the course of 2022. The 10-year Treasury rate already rose from 1.4% at the start of December to higher than 1.7% during the second week of January, and the average 30-year fixed-rate mortgage is expected to increase to 4% near the end of the year. Combined with ongoing home price appreciation, higher rates will place additional pressure on housing affordability. To subscribe for free to Eye on the Economy, please visit nahb.org.
NAHB's Economic Outlook for 2022
Calendar of Events
Monthly Dinner Meeting - Mass Save/ICF March 8th DoubleTree Hyannis KAM Member Mixer April 12th KAM Hyannis Giant Jenga Challenge April 27th Hog Island, Orleans Monthly Dinner Meeting – Program TBD May 10th DoubleTree Hyannis Blitz Build Kick Off June 7th Bad Marthas Falmouth Island Queen Cruise June 16th Island Queen Falmouth 21stAnnual Nailbangers Golf Tournament July 21st Hyannis Country Club Lego Building Competition August 20th Johnny Kelley Park, Dennis HB&RACC/Habitat for Humanity Blitz Build Sept. 19-24 Falmouth Residential Construction Career Day Oct. 6h Barnstable Fairgrounds Annual Meeting & Holiday Party December 13th Location TBD
Membership Minute Sponsored By:
Laplante Construction Contact: Bill Laplante Phone: 413-636-5282 Email: Bill@Laplanteconstruction.com Website: www.laplanteconstruction.com Laplante Construction is a leading custom home builder in Western Massachusetts and Cape Cod, honing their luxury home building expertise over 50 years. Partnership with their clients is paramount; they blend their expertise in luxury home building with their clients’ imagination to achieve stunning results.Laplante Construction excels in project management, planning, communication, and service.Whether the budget is $250,000 or $5 million, they will use resources wisely and guarantee a superior outcome. As Certified Green Professionals, they are proud to use home remodeling materials and new home construction methods that support the health and sustainability of the planet. V.N. Lazic Construction Contact: Vladica Lazic Phone :(774) 534-6300 Email: vladica.lazic93@gmail.com Website: https://www.vnlazicconstruction.com Originally from Serbia, South Europe, Vladica moved to the Cape in the summer of 2016. Ever since, he’s been working in construction, on some of the most beautiful homes on our shore, being the first one to show up in the morning, and the last one to leave the job site. After five years of learning from some of the finest craftsmen and developing his skillset, as well as an appreciation tor the craft, he founded V.N. Lazic Construction in the fall of 2021, and is already on the path to build exceptional homes and spaces, while making his customers satisfied. Driven by the phrase: “ if it were easy, everyone would do itâ€, he offers all services in construction, from new builds and additions, to remodels, bathroom and kitchen renovations, decks, window&door replacement, as well as roofing and siding.
Please welcome our new members when you see them at our events or around town.It’s great when members do business with other members!
Mitsubishi Electric Heating & Air Conditioning Local Contact: Dave Hazel Phone:6 03-391-9173 Email: dhazel@hvac.mea.com Website: http://www.metahvac.com Mitsubishi Electric is happy to join the HB&RACC Association! Our team helps performance builders and remodelers implement the latest high-performance heat pumps in new and existing buildings, providing unequalled efficiency, comfort, health and durability. We specialize in providing ductless and ducted heating and air-conditioning system design, as well as guidance on ventilation, dehumidification, and humidification to achieve optimal comfort for your new build or remodel. SiteOne Landscape Supply Contact: Thomas Malone Phone:( 774) 212-6445 Email: tmalone@siteone.com Website: https://www.siteone.com With the largest wholesale selection of landscaping products and a team with unsurpassed expertise, SiteOne® Landscape Supply has everything residential and commercial professionals need to grow and succeed. We partner with the top brands in irrigation, lighting, pest management, hardscapes, turf maintenance, landscape supply, nursery, equipment and more. No matter what your business needs, SiteOne has solutions you can count on.
Calendar of Events Monthly Dinner Meeting - Mass Save/ICF March 8th DoubleTree Hyannis KAM Member Mixer April 12th KAM Hyannis Giant Jenga Challenge April 28th Hog Island, Orleans Monthly Dinner Meeting – Program TBD May 10th DoubleTree Hyannis Blitz Build Kick Off June 7th Bad Marthas Falmouth Island Queen Cruise June 16th Island Queen Falmouth 21stAnnual Nailbangers Golf Tournament July 21st Hyannis Country Club Lego Building Competition August 20th Johnny Kelley Park, Dennis HB&RACC/Habitat for Humanity Blitz Build Sept. 19-24 Falmouth Residential Construction Career Day Oct. 6h Barnstable Fairgrounds Annual Meeting & Holiday Party December 13th Location TBD
News You Can Use 1.New members Outerland Landscaping has a new CEO - Phillip Hussey.Say hello and welcome if you meet him out and about! 2.RCC day update!!!The date is now October 6th. Same location @ Barnstable Fairgrounds. Much more info to come.If you have interest in exhibiting, please contact candice@capecodbuilders.org 3.The next issue ofAt Home on Cape Codis being prepped and will be out in early May.If you haven’t reserved your ad yet, please do so at your earliest convenience.If you have done so, you are in good company.It is going to be a beautiful issue.Thank You! 4.Want to be recognized throughout the year at every HB&RACC event and on our website and promotional messages? We are still accepting annual sponsorships and would like to thank the following members who have signed on- Platinum Level– Falmouth Lumber, MidCape Home Centers, Shepley Gold Level– Cape Cod 5, EJ Jaxtimer, KAM Appliances, M. Duffany Builders,
 Premium Plywood Specialties Silver Level– Cape Associates, Stonewood Products Bronze Level– Meyer & Sons Building, Pella Windows, White Wood Kitchens 5.Mark Your Calendars!!!We are planning a full day “summit†this Fall that will include CEU credit classes, exhibitors and networking opportunities.Stay tuned for details soon. 6.Member request:Please Like our Facebook page and Follow Us on Instagram.If you do so, you will get regular updates on upcoming events and info sessions.Don’t miss the chance to stay informed. 7.Need help with marketing/advertising?We have relationships with most media outlets here on Cape, as well as experience in video production, digital, print and radio campaigns.We are planning a Marketing 101 virtual session soon, so please let us know if interested. Please send submissions to:candice@capecodbuilders.org
Healthy green buildings address our escalating climate crisis, reduce ongoing operating costs and improve the human health. Join us on March 4 at 8AM for our Virtual First Friday withJoyce Lee, who will focus on the intersection of healthy building, active design and sustainable technologies.
 Joyce is a Fellow of the American Institute of Architect, WELL Accredited Professional and a LEED Fellow. She serves as president ofIndigoJLD, which provides green health, benchmarking and planning services for exemplary projects.
 More info and registrationhere