Building the Future of the Lowcountry
January New Home Sales Lower but Still Solid
Charleston HBA
New home sales declined in January on rising interest rates but still posted a steady reading as demand remains strong. Sales of newly built, single-family homes in January fell 4.5% to an 801,000 seasonally adjusted annual rate from a sharp upwardly revised reading in December, according to data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the January reading of 801,000 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 34.4% over last year, rising to a 6.1 months’ supply, with 406,000 available for sale. However, just 37,000 of those are completed and ready to occupy. The median sales price rose to $423,300 in January from $395,500 in December, and is up more than 13% compared to a year ago, due primarily to higher development costs, including materials. Regionally, on a year-to-date basis, new home sales fell in three regions, down 10.7% in the Northeast, 3.7% in the Midwest and 7.4% in the South. New home sales were up 1.2% in the West.
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IN THE NEWS
March 2022
Materials Prices Rise Again in January The prices of goods used in residential construction ex-energy climbed 3.6% in January (not seasonally adjusted), according to the latest Producer Price Index (PPI) report released by the Bureau of Labor Statistics. The index was led higher by a 25.4% jump in softwood lumber prices, and 9% price increases for indoor and outdoor paint. Building materials prices increased 20.3% year over year and have risen 28.7% since January 2020. Over the past four months, the index has climbed 8.4%.
Strong Turnout at 2022 Builders' Show More than 45,000 home building professionals filled the exhibit halls of the Orange County Convention Center in Orlando as the National Association of Home Builders hosted the NAHB International Builders’ Show® (IBS) Feb. 8-10, which followed extensive health and safety protocols. IBS and the Kitchen & Bath Industry Show (KBIS) again combined for the Design & Construction Week® (DCW), which drew more than 70,000 attendees. More than 800 IBS exhibitors displayed their products across 425,000 net square feet.
Rising Home Values Pricing Out Millions Rising home prices and interest rates are taking a toll on housing affordability, with 87.5 million households — or roughly 69% of all U.S. households — unable to afford a new median priced home. In other words, seven out of 10 households lack the income to qualify for a mortgage under standard underwriting criteria. The data comes from NAHB’s recent 2022 priced-out estimates, which show that if the median price goes up by $1,000, another 117,932 households would be priced out of the market. Townhouse Construction Surged in 2021 Townhouse construction jumped 28.1% in 2021, according to NAHB analysis of the most recent Census data. Medium-density construction lagged for much of 2020, with persistent affordability headwinds, and housing demand shifting to more suburban and exurban areas. However, demand for medium-density neighbor- hoods returned as the economy more fully reopened during the past year. During just the fourth quarter of 2021, single-family attached starts totaled 39,000.
Brett Miller President Jay Piner Vice President Robby Arnold Secretary Wade Green Treasurer Ward Mungo Past President Board Members Adam Baslow Chris Brace Doug Hayden Becky Holdsworth Mick Jewell Alex Kellner Sally Liipfert Jamey Nelson Trae Redmond Ted Terry Ashley Valdivieso For a full list of life board members, click here
Upcoming Events
Home Buyer Preferences Home buyer preferences have continued to reverse trends in home building as builders work to respond to new interests in the wake of COVID-19. Increased desire for bigger homes, suburban locations and more outdoor amenities are driving new home design, resulting in a rise in the average size of a new home to 2,524 square feet, and the percentage of new homes with 4+ bedrooms and 3+ full bathrooms to 46% and 34%, respectively. Baby boomers buck those trends, with a greater interest in smaller homes on smaller lots, preferably in the suburbs. Certain home features do resonate with all generations, however. The top five are: laundry rooms; exterior lighting; ceiling fans; patios; and walk-in pantries.
Multifamily Sentiment up in Q4 Confidence in the market for new multifamily housing improved in the fourth quarter of 2021, according to results from the Multifamily Market Survey (MMS) released recently by NAHB. The MMS produces two separate indices: the Multifamily Production Index (MPI) increased one point to 54 compared to the previous quarter while Multifamily Occupancy Index (MOI) decreased six points to 69. The MPI measures builder and developer sentiment about current conditions in the apartment and condo market on a scale of 0 to 100. The index and all of its components are scaled so that a number above 50 indicates that more respondents report conditions are improving than report conditions are getting worse.
Builder/Inspector Meeting March 9 | 8:30am N. Charleston City Hall 2500 City Hall Lane N. Charleston, SC Golf Tournament March 16 | 9:00am Charleston Municipal Golf Course SMC Bus Tour March 29 | 9:00am Bus leaves from CHBA Office Membership 101 March 30 | 9:00am CHBA Office Breakfast with the Builder April 6 | 9:00am CHBA Office For a full list of events from now until the end of the year, click here
Leadership List
NAHB, Boys & Girls Clubs Announce Partnership
NAHB and the Boys & Girls Clubs of America are teaming up to introduce more of America’s youth to a potential career in residential construction. The announcement was made at a press conference held during the International Builders’ Show (IBS) in Orlando. The announcement comes as the residential construction industry continues to struggle to overcome the lack of available skilled trade workers. In fact, a recent survey of NAHB members showed nearly two thirds rank this issue as the most significant challenge they faced last year. Working together to promote construc- tion career pathways, NAHB and Boys & Girls Clubs of America will connect young people to individuals in the industry, providing them with work-based learning activities and access to essential skills development programs to further their career exploration. To kick off the pilot program, 10 local home builder associations (HBAs) will work with local Boys & Girls Clubs to mentor young men and women, showcase the multiple career oppor- tunities available in the home building industry and help guide them to choose a career in residential construction. The local HBA chapters will host events, including career panels, jobsite visits and job shadowing. HBAs interested in connecting with their local Boys & Girls Club can submit a request on nahb.org.
From left, NAHB CEO Jerry Howard, Boys & Girls Clubs CEO Jim Clark and 2021 NAHB Chairman Chuck Fowke prepare to sign proclamation on workforce readiness.
Members Elect NAHB’s 2022 Leadership Team
2022 NAHB Chairman Jerry Konter
NAHB members elected senior officers to the association's top leadership positions at NAHB’s Leadership Meetings during the 2022 International Builders’ Show. Taking the helm as NAHB’s Chairman of the Board this year is Jerry Konter, a Savannah, Ga.-based home builder and developer with more than 40 years of experience in the home building industry. Also moving up on the association’s leadership ladder was Alicia Huey, a Birmingham, Ala.-based custom home builder. She was elected First Vice Chairman of the Board. Carl Harris, a Wichita, Kan.-based small volume spec and custom home builder, was elected Second Vice Chairman of the Board. Buddy Hughes, a Lexington, N.C.-based home builder and developer, joined the NAHB leadership ladder with his election as Third Vice Chairman of the Board. 2021 NAHB Chairman Chuck Fowke remains on the leadership ladder as the 2022 Immediate Past Chairman. Rounding out the association’s leadership is NAHB Chief Executive Officer Jerry Howard, from Washington, D.C.