January 2021
Forecast for Home Building in 2021 Remains Solid
Single-family builder sentiment fell back to a level of 86 in December, according to the NAHB/Wells Fargo Housing 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. 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. 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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Calendar of Events January 25 No General Membership Meeting February 26-28 Columbus Home Show CANCELED March 4, 2021 Legislative Banquet Wilderness Ridge Lincoln, NE March 22 General Membership Meeting 6:30 at Dusters Presentation by: City of Columbus Building Inspectors April 26 General Membership Meeting 6:30 at Dusters Presentation by: TBD
2021 CHB Board of Directors President Levi Abbott Vice President Jerry Nauenburg Treasurer Hollie Olk Past President Steve Long Director Danny Willets Nebraska State HBA Directors Sectretary Steve Long Directors Levi Abbot Jerry Nauenburg
IN THIS EDITION CHB BOARD OF DIRECTORS p.2 CALENDAR OF EVENTS p.2 NEWS ACROSS THE NATION p.3-5 BUILDING THE FUTURE p. 6
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Average New Home Uses 24 Subcontractors 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).
Do Business With an NAHB Member 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 Calls for COVID Safety Stand Down 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.
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 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.
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. trade officials to work with Canada to end the tariffs and achieve a long-term, stable solution in lumber trade.
Take Advantage of IBSx Education Sessions
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.
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.
State of the Nation's Housing 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).
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
Building the Future A new opportunity for students this school year at Columbus High School is found in the Advanced Construction class taught by Mr. Marcus Gillespie. This course is partnering with Shelby Lumber to build a house in Columbus. The partnership will allow the Columbus students to learn all of the aspects of home construction from foundation to the finished product. There are two classes involved: A class of 10 students which meets for one semester made up of juniors and seniors. A class of 12 seniors who will work on the house for the entire school year. The students have already began work on the home and it will be on the market in the fall of 2021. The house is 1600 square feet with 3 bedrooms and 2 bathrooms with a 3 stall garage. The house is located on 32nd St between 45th and 48th Avenue.
Mike Rowe's Work Ethic Scholarship Program is about recognizing the people who understand the importance of personal responsibility, delayed gratification, a positive attitude, and, of course, work ethic. The hardworking men and women who keep the lights on, water running, and air flowing—the next generation of skilled workers who will work smart and hard. These are the folks considered rock stars, and they want to reward them. Check here for updates regarding Mike Rowe's 2021 Scholarship!
Marcus Gillespie Skilled & Technical Sciences Columbus High School