Supply-side pressures, such as resurgent lumber prices, limited lot supplies, supply-chain issues, and a persistent skilled labor deficit foreshadow higher costs and longer build times heading into next year. Moreover, on the demand side of the housing market, limited inventories of single-family homes have generated strong price gains in 2020.
The deployment of a vaccine, while representing good news for the overall economy, will place upward pressure on interest rates. In turn, the combination of higher prices and rising rates will price some households out of the housing market next year.
Forecast for Home Building in 2021 Remains Solid
Charleston HBA
Single-family builder sentiment fell back to a level of 86 in December, according to the NAHB/Wells Fargo Housing
J A N U A R Y 2021
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New THIS Month MEMBERS ASSOCIATES GlassEco Surfaces Home Elevators & Lift Products Trico Exteriors Mercedes-Benz Van Center - Baker BUILDERS Allblue Home Services Prince Roofing Swagert Construction Group EVENTS & EDU Builder/Inspector Mtg. Jan 13th | 8:30AM N. Charleston Coliseum Membership 101 Jan 20th | 9:00AM Location TBD
Market Index (HMI), after achieving an all-time high of 90 in November. The dip was due to growing concerns over housing affordability in 2021. However, December’s HMI was still the second highest on record.
WEDNESDAY, JANUARY 20TH 9:00AM - 10:00AM | LOCATION TBD | Free to attend! Sponsored by SIC Learn about the HBA, what your membership means and the benefits of being involved! LEAD. LEARN. CONNECT. CONTRIBUTE.
continued from page 1)... The NAHB forecast is for ongoing gains for single-family construction in 2021, though at a slower growth rate than in 2020. Remodeling will remain strong as people continue to upgrade existing homes. The multifamily construction market will experience weakness as rent growth slows and vacancy rates rise. However, the development market should stabilize by 2022.
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Roughly 69% of home builders use between 11 and 30 subcontractors to build the typical single-family home. The average is 24 different subcontractors per home, according to responses to a set of special questions in a recent survey conducted as part of the monthly NAHB/Wells Fargo Housing Market Index.
At least 95 percent of builders said they always subcontracted five different jobs: HVAC (97 percent), electrical wiring and plumbing (96 percent each), and carpeting and security systems (95 percent each).
Average New Home Uses 24 Subcontractors
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Although housing has generally been a bright spot in the midst of the pandemic, the Harvard University’s Joint Center for Housing Studies recent report, “The State of the Nation’s Housing 2020,” shines a spotlight on key areas for improvement, especially the lack of an adequate supply of new housing. The report noted that the supply of existing homes was at its lowest level since 1982. Tightened supply and strong demand has led to increased home prices, with prices rising 5.7% year over year in September. The greater impact on low-income house- holds is also reflected in the rental market. According to the report, 37.1 million households, or 30%, were cost burdened in 2019, with 17.6 million (14%) identified as severely cost burdened (spending more than 50% of their incomes on housing).
Housing Starts Flat in November
Single-family starts flattened in November as builders struggled to meet demand, while overall housing starts increased 1.2% to a seasonally adjusted annual rate of 1.55 million units, according to a report from HUD and the U.S. Census Bureau. The November reading of 1.55 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 increased 0.4% to a 1.19 million seasonally adjusted annual rate. The multifamily sector, which includes apartments and condos, increased 4.0% to a 361,000 pace. On a year-to-date basis, combined single-family and multifamily starts are 14.4% higher in the Midwest, 7.6% higher in the South, 5.4% higher in the West and 3.3% lower in the Northeast.
State of the Nation's Housing
trade officials to work with Canada to end the tariffs and achieve a long-term, stable solution in lumber trade.
U.S. Lowers Duties on Canadian Lumber
A final determination of the first administrative review by the U.S. Commerce Department will reduce duties on shipments of Canadian softwood lumber into the United States from 20% to 9%. This is a step in the right direction for the lumber market, which has seen significant price volatility over the last year. NAHB encourages U.S.
Dynamic, in-depth education sessions – a hallmark of the traditional International Builders’ Show – will continue during the IBSx Virtual Experience, Feb. 9-12, 2021. From the convenience of your computer, you can expect to learn about best practices and solutions and hear insights from some of home building’s top experts. With more than 100 education sessions in nine industry tracks, you’ll access fresh strategies, trends and solutions for beginners and experienced professionals. Education sessions are accessible when you purchase an All Access pass. The industry tracks include: Architecture & Design; Building Techniques & Strategies; Business Management; Custom Building & Remodeling; Land Development & Community Design; Multifamily Housing; Project Management; Research & Trends; and Sales & Marketing; Education content will be available in live and semi-live sessions, as well as on demand. The on-demand content will be available for viewing during the four-day show through March 31, 2021. Learn more IBSx education sessions and register at BuilderShow.com.
Take Advantage of IBSx Education Sessions
second rule creates a new category for QMs - Seasoned QMs. In adopting a price-based approach to replace the spe- cific DTI limit for General QM loans, the CFPB deter- mined that a loan’s price is a strong indicator of a con- sumer’s ability to repay and is a more holistic measure of a consumer’s ability to repay than DTI alone.
CFPB Issues Final Qualified Mortgage Rules
The Consumer Financial Protection Bureau has issued two final rules related to qualified mortgage (QM) loans. The General QM Final Rule replaces the current requirement for General QM loans that the consumer’s debt-to-income ratio (DTI) not exceed 43%, with a limit based on the loan’s pricing. The
NAHB has begun a broad campaign to encourage everyone in the federation to “Do Business with an NAHB Member.” The effort seeks to foster cross-functional relationships among Builder, Associate and Affiliate members. More members working together means more opportunities across the home building industry and the NAHB Federation. NAHB has developed logos and banner ads that members and HBAs can use on their websites and in social media.
NAHB encourages members and all other residential construction companies to halt work for at least 10 min- utes the week of Jan. 11-15, for a COVID-19 Jobsite Safety Stand Down to remind workers what they should do to keep themselves safe from coronavirus and to help reduce its spread. Precautions include wearing face cover- ings, maintaining a distance of at least six feet, and cleaning and sanitizing frequently used tools and surfaces.
NAHB Calls for COVID Safety Stand Down
Do Business with an NAHB Member
Upcoming Events
Leadership List
BUILDER/INSPECTOR MTG N. Charleston Coliseum Jan. 13th | 8:30AM MEMBERSHIP 101 Location TBD Jan. 20th | 9:00AM MORTGAGE LENDING 101 Location TBD Jan. 21st | 9:00AM GMM: RESIDENTIAL ANALYSIS WITH EDSEL CHARLES Crown Plaza, North Charleston Jan. 26th | 9:00AM L&L: SOIL & PERC TESTING FOR SECPTIC PERMITTING Location TBD Jan. 28th | 11:30AM HEALTHCARE 101 CHBA Office Feb. 4th | 9:00AM BREAKFAST WITH THE BUILDER N. Charleston Coliseum Feb. 9th | 9:00AM *** If you have any questions, contact Ashley at ashley@charlestonhomebuilders.org
Chrs Klick President Ward Mungo Vice President Brett Miller Treasurer Adam Copenhaver Secretary Lane Baker Past President Board Members Ted Terry Chris Brace Jesse Bray Jay Piner Wade Green Jamey Nelson Tricia Haggerty Jamie Doyle Robby Arnold Mick Jewell Tom Lauderdale Gus Brabham Doug Hayden For a full list of life board members, visit our website hbacharleston.com
A $900 billion economic relief package approved by the House and Senate on Dec. 21 includes key provisions that NAHB championed. President Trump signed the measure into law six days later on Sunday, Dec. 27. NAHB worked closely with Democratic and Republican congressional leaders to ensure the recovery legislation addresses three major builder concerns: • Provides relief for small businesses from burdensome loan forgiveness requirements. • Helps struggling renters and landlords with dedicated rental assistance. • Assists HBAs that have largely been excluded from previous relief measures. The final package covers these three areas and contains several other policy objectives that NAHB has championed, including a permanent minimum 4% credit floor on low-income housing tax credits that will allow multifamily developers to finance thousands of additional affordable rental units and an extension of temporary tax provisions for newly-built energy-efficient homes and for home owners who engage in remodeling activities.
The legislation also includes other important provisions that: • Extend all pandemic unemployment benefits expiring at the end of December through March 14, 2021. • Extend weekly enhanced federal unemployment payments (paid out on top of regular UI benefits) of $300 per week through March 14, 2021. • Provide a direct payment of $600 to most Americans. View further analysis on the following areas of the $900 billion rescue package: Tax Relief Rental Assistance Paycheck Protection Program
Latest Stimulus Package Contains Key Provisions for Housing
President Trump Signs USMCA Trade Pact In a positive development for the housing industry, President Trump on Jan. 29 signed the U.S.-Mexico- Canada Agreement (USMCA). The U.S. residential construction and remodeling industries rely on tens of billions of dollars in building materials sourced from Mexico and Canada each year. By modernizing and strengthening free trade with our largest trade partners, the USMCA will boost U.S. economic growth and help keep the price of homes and home improvements low.
New App Offers Accessibility Guidance NAHB unveiled the "Pocket Guide to the Fair Housing Act," a free app to help home builders, contractors and designers meet the accessibility requirements of the act, during the Builders' Show in Las Vegas. “HUD welcomes the efforts of this important housing industry partner in working to meet the needs of persons with disabilities,” HUD Secretary Ben Carson told NAHB's Leadership Council.
EPA Announces Water Rule at IBS EPA Administrator Andrew Wheeler announced a final “waters of the United States” (WOTUS) rule during the International Builders’ Show in Las Vegas. “The Navigable Waters Protection Rule is a big win for states, municipalities, builders and developers, landowners and the American public,” Wheeler said in remarks to NAHB’s Leadership Council. “It will make it easier to understand where the Clean Water Act applies and, as importantly, where it does not.” The EPA administrator noted the new water rule is good for the economy and the environment.
NAHB Unveils All-New Website To better serve the needs of its members, industry partners and other key stakeholders, NAHB recently unveiled an all-new nahb.org website. The site not only features a much more modern look, but also greatly improved search performance, enhanced content functionality and improved navigation for a better user experience. DOL Announces Joint Employer Rule In a win for NAHB, the Labor Department in January announced a final rule to provide a clearer method for determining joint employer status. The rule will provide clarity and certainty regarding employers' responsibility to pay federal minimum wage and overtime for all hours worked over 40 in a week. The new rule will take effect March 16. It includes a set of joint employment examples to further assist in clarifying joint employer status.