November 2021
Top Markets for New Home Permits over the Last Decade
Home building staged a slow, modest recovery during the last decade in the wake of the Great Recession, then saw an uptick last year during the COVID-19 pandemic. Increased building activity can been seen in both the single-family and multifamily sectors, based on data for permits from the U.S. Census Bureau. In 2020, builders applied for 979,360 single- family permits, which is 134% higher than the 2011 level of 418,498. For multifamily construction, 491,781 permits were issued in 2020. This is 139% higher than in 2011. Texas took the top spot, with three out of the five largest single-family markets in the Lone Star state. The graphic to the right shows the top 20 metropolitan statistical areas for single-family permits issued between 2011-2020. For multifamily construction, the New York- Newark-Jersey City, NY-NJ-PA metro area topped the list with 377,761 permits from 2011 through 2020. The No. 2 market over the same period was Dallas-Fort Worth-Arlington, TX with 217,621 permits, followed by Los Angeles-Long Beach- Anaheim, CA (185,732), Houston-The Woodlands-Sugar Land, TX (162,545), and Seattle-Tacoma-Bellevue, WA (139,659).
Solid Gain for September New Home Sales Fueled by strong demand and buyers’ anticipation of future higher mortgage rates, new home sales posted a solid gain In September. Sales of newly built, single-family homes in September rose 14% to a seasonally adjusted annual rate of 800,000, from a downwardly revised reading in August, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
More New Homes Receive HERS Rating A home’s Home Energy Rating System (HERS) Index Score is calculated by a certified Resi- dential Energy Services Network (RESNET) HERS Rater who pro- vides an energy rating for a home by comparing its features against a defined reference home (a 2006 standard built home). Since the inception of the HERS Index in 1995, there have been more than 3.2 million HERS-rated homes, with more than 230,000 rated this year. 2020 saw a 24% increase in the number of rated homes over 2019, with nearly one in four new homes built receiving a HERS Index Score, according to RESNET. FHFA Announces Measures To Promote Affordability The Federal Housing Finance Agency has announced measures to advance the affordability of homeownership, especially in underserved communities. Over the coming months, Fannie Mae and Freddie Mac (the Enterprises) will expand certain eligibility requirements for their RefiNow and Refi Possible refinance programs aimed at assisting low-income borrowers. Second, the Enterprises will be incorporating desktop appraisals into their selling guides for new purchase loans, beginning in early 2022.
NAHB Calls for Action on Supply Chain NAHB is calling on Congress and the Biden admin- istration to help ease building material supply chain bottlenecks by removing trade barriers and seeking solutions to port congestion and persistent delays in truck and rail transportation. Testifying Oct. 20 before the House Small Business Subcommittee on Oversight, Investigations, and Regulations, NAHB Chairman Chuck Fowke told lawmakers that extraordinarily high lumber and building materials prices are serious headwinds for the U.S. housing sector and for housing affordability.
Remodeling Index Remains Strong NAHB released its NAHB/Royal Building Products Remodeling Market Index (RMI) for the third quarter, posting a reading of 87. That’s unchanged from the second quarter, but up five points from the third quarter of 2020. The finding is a signal of residential remodelers’ confidence in their markets, for projects of all sizes. An index number above 50 indicates that a higher share of remodelers view conditions as good than poor.
Property Taxes Vary Widely from State to State
Lot Shortage Getting Serious Even as home builders deal with a shortage of skilled labor and building materials supply challenges, in many areas they are also facing a serious lot shortage. In a recent NAHB survey, 76% of builders reported that the overall supply of developed lots in their areas was low to very low. This is a record-high response to this question since NAHB began collecting the information in the 1990s. The previous record was 65% in 2018. Responding to questions in the September 2021 NAHB/Wells Fargo Housing Market Index (HMI) survey, 46% of single-family builders characterized the supply of lots simply as low, and 30% said the supply of lots was very low.
Property taxes vary widely across states both in terms of annual taxes paid as well as effective tax rates. In 2019, the difference between average real estate taxes paid by New Jersey and Alabama home owners was $7,974. New Jersey continued its distinction as having the highest average real estate tax bill per home owner ($8,687) as well as the highest effective tax rate (2.13%). Alabama ($713) and Hawaii (0.31%) were at the other end of the spectrum, with the lowest annual real estate tax bill and average effective tax rate, respectively. The difference in taxes between New Jersey and Alabama grew by $170 between 2017 and 2019. The map above shows the concentration of high average property tax bills in the Northeast. In contrast, southern states (with the exception of Texas) boast some of the lowest RET bills for their resident homeowners.
And Where Are the Workers? Economic growth for 2021 is expected to post the best GDP expansion rate since 1984. But the labor shortage has taken some of the bloom off the economic rose. The Bureau of Labor Statistics employment report for September registered a gain of only 194,000 jobs. Forecasters, including NAHB, were looking for a gain closer to 500,000. Indeed, the number of open, unfilled jobs in the construction sector now totals 344,000. As of September, residential construction workers totaled 3.1 million, broken down as 882,000 builders and 2.2 million residential specialty trade contractors. Over the last 12 months, home builders and remodelers added 136,300 jobs on a net basis.
The NAHB/NAR Home Performance Counts: Virtual Green Home Tour Series continues in November from Pebble Beach, Calif., at Villa Bilancia. Healthy home construction is one of the hottest topics in homebuilding today. Bill Hayward and his family experienced firsthand why it is critical. Years ago, they moved into what they thought was their dream home, only to discover the house was making them sick. From that exper- ience, Bill was inspired to help people better design their homes, leading to the creation of the Hayward Healthy Home principles and the Hayward Score. Villa Bilancia is the Hayward’s recently completed dream home. It was built using leading edge building science and healthy living knowledge. Experience high- performance at the highest level while also learning how the efficient and healthy strategies used are scalable to all homes. Another of the guiding principles for this home comes from the Wellness Within Your Walls (WWYW) program. WWYW founder Jillian Pritchard Cooke joins Bill on the tour and the post-tour Q&A. Register for the tour at nahb.org/greentour. These free 45-minute green tours are held the third Thursday of each month and include a live Q&A with building and real estate professionals. Registrants can access the replay for this event and others in the series through NAHB's webinar replay library. The series is a product of Home Performance Counts, a joint educational initiative between NAHB and the National Association of Realtors (NAR).
Green Home Tour Looks at Healthy Home in Pebble Beach
Membership Minute sponsored by: In the spirit of doing business with other HB&RACC members, we are happy to welcome the following new members into the fold.If you see them at any of our upcoming events, please introduce yourself and start a conversation! Agricola Construction Contact: Wendy Agricola Phone: (508) 477-6549 Email:agricola1@comcast.net Website:http://www.agricolaconstruction.com Agricola construction has been building beautiful homes for over 35 years. We do both residential and commercial projects and range from simple additions and renovations to high end magnificent custom homes. We have our own mill shop and can customize all interior features. Redbud Contracting Contact: James & Mary Muckinhaupt Phone: (413) 426-2942 Email: marymuckinhaupt@gmail.com Custom deck buildersspecializingin composite decks with wood or galvanized steel framing for truly maintenance free outdoor living. Add amenities such as outdoor kitchens, roofs, pergolas, fire features and pizza ovens for a one of a kind experience.
Mark Your Calendars 2022 Events Dinner Meeting January 11th March 8th February 15th April 12th May 17th Bowling For Beds March 31st Giant Jenga April 28th 5th Annual Residential Construction Career Day May 12th & 13th Island Queen Cruise June 16th 21st Annual Nailbangers Golf Tournament July 21st