Builder Confidence Falls for Ninth Straight Month
October 2022
In another sign that the slowdown in the housing market continues, builder senti- ment fell for the ninth straight month in September as the combination of elevated interest rates, persistent supply chain disruptions and high home prices continue to take a toll on affordability. Builder confidence in the market for newly built single-family homes fell three points in September to 46, the lowest level since May 2014 with the exception of the spring of 2020, according to the NAHB/Wells Fargo Housing Market Index (HMI). The HMI is projecting ongoing decline for the volume of single-family housing starts. In another indicator of a weakening market, 24% of builders reported reducing home prices, up from 19% last month. Due to tightening monetary policy, mortgage rates increased above 6% last week, the highest level since 2008, which is pricing buyers out of the market. More than half of the build- bers in our survey reported using incentives to bolster sales, including mortgage rate buydowns, free amenities and price reductions. Derived from a monthly survey that NAHB has been conducting for more than 35 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
Call the HBA Office at 864-583-5471 or visit www.hbaspartanburg.com/events to purchase your tickets!
RAFFLE TICKETS ON SALE NOW
WIN A $1,000 GIFT CERTICIATE - TICKETS ARE ON SALE NOW. Get yours at www.hbaspartanburg.com/events!
Tickets are $25 each or 5 for $100! Each ticket gets you a chance in the drawing to WIN a $1,000 Gift Certificate to Dewey’s Pawn Shop!Drawing will be held at the Annual Sporting Clay Event on October 6th. (You do not need to be present to win!)
Serve on a Committee or Council Members interested in serving the housing industry are encouraged to apply to one of NAHB's committees or council board of trustees for the 2023 leadership year. Committees and councils meet during the Spring and Fall Leadership Meetings and at the International Builders' Show to discuss key issues and consider NAHB policy. The online application is now open and the deadline to apply is Nov. 20, 11:59 p.m. ET. You must be logged in to nahb.org to see this page or submit an application.
Make Plans to Attend the Builders' Show in Las Vegas Registration is open for the 2023 NAHB International Builders’ Show® (IBS), the largest annual light cons- truction trade show in the world. IBS will take place in person at the Las Vegas Convention Center, Jan. 31-Feb. 2, where it will again co-lo- cate with the National Kitchen & Bath Association’s (NKBA) Kitchen & Bath Industry Show® (KBIS) for the 10th Annual Design & Construction Week® (DCW). The two shows will host more than 1,300 exhibiting brands spanning over 985,000 net square feet of exhibit space. This year, registration for IBS will also allow you access to the show floor of the National Hardware Show. More Women Joining Construction Workforce Women make up 11% of the construction workforce, the highest share on record, according to the most recent data from the 2021 Current Population Survey. Job gains by women have been outpacing overall job gains in construction in recent years. As a result, the share of women in construction increased from 9.1% to 11% from 2017 to 2021. As the home building industry faces an ongoing shortage of skilled labor, NAHB has made it a priority to bring women into the workforce.
NAHB Urges Action on Supply Chain NAHB CEO Jerry Howard participated recently in a White House meeting on actions to address hous- ing supply and affordability challenges across the country. The Sept. 21 meeting featured a diverse group of affordable housing leaders, including National Economic Council Director Brian Deese and HUD Secretary Marcia Fudge. Howard urged the administration to take steps to ease building material supply chain disruptions that are causing housing construction delays and higher home building costs.
Codes Victory over Nuisance Tripping A coalition of HVAC manufacturers and home builders has won an appeal to remove certain requirements in the 2020 National Electric Code (NEC) that were causing air conditioner units to trip due to an incompatibility of equipment. The ground-fault circuit interrupter (GFCI) mandate in the 2020 NEC will be halted until Sept. 1, 2026, to give manufacturers time to engineer a solution.
Report Considers Social Effects of Work from Home
Multifamily Permits Surge High mortgage rates and building production bottlenecks continue to act as a drag on the single-family housing market even as overall housing starts posted a double-digit gain in August due to a surge in multifamily production. Overall housing starts increased 12.2% to a seasonally adjusted annual rate of 1.58 million units in August from a downwardly revised July reading, according to a report from HUD and the U.S. Census Bureau. On a regional and year-to-date basis, combined single-family and multifamily starts are 4.6% higher in the Northeast, 2.4% lower in the Midwest, 5.6% higher in the South and 1.5% lower in the West.
During the COVID-19 outbreak in the early months of 2020, many businesses across the United States closed and millions of workers experienced the work from home trend out of necessity. This sudden and massive work from home experiment generated major lifestyle changes for workers, homeowners, business owners, and our communities. A new NBER working paper, “Working from Home Around the World,” provides some insight into the big shift to working from Home (WFH) and discusses implications for workers, organizations, cities, and the pace of innovation. The study surveyed full-time workers who had finished primary school in 27 countries as of mid-2021 and early 2022 and found several explanations of how and why the pandemic catalyzed the big shift to WFH. The pandemic has driven a mass, compulsory social experiment in WFH, which generated a tremendous flow of new information and greatly altered perceptions about the feasibility and productivity of WFH.
Fed Rate Hikes Slow Housing Continuing its tightening of financial conditions to bring the rate of inflation lower, the Federal Reserve’s monetary policy committee raised the federal funds target rate by 75 basis points, increasing that target to an upper bound of 3.25%. This marks the third consecutive meeting with an increase of 75 basis points. While committing to a increasingly hawkish policy path that will slow demand and reduce inflation, the Fed also noted that the economy is only growing at a “modest” pace. Among the clear signs of economic slowing are just about every housing indicator, including nine straight months of declines for home builder sentiment.
NEW MEMBER: Valaree Easler Truist 380 E. Main Street * Spartanburg, SC 29302 864-809-4047 valaree.easler@truist.com RENEWING ASSOCIATE MEMBERS Bobby Amaker, 1st Piedmont Federal Savings RENEWING BUILDER MEMBERS Wes Kyzer, Kyzer General Contracting Mike Seay, Mike Seay Construction MEMBER NEW LOCATION Mario Insabella Movement Mortgage 269 S. Church Street Spartanburg, SC 29306
Single-Family Lot Values Reach Record Highs
Lot values for single-family detached housing starts in 2021 increased across the nation, with the national value and six out of nine Census division values setting new records. The U.S. median lot price now stands at $55,000, according to NAHB’s analysis of the Census Bureau’s Survey of Construction (SOC) data. In the New England and Pacific divisions, lot values surged 67% and 39%, respectively, and reached new historic highs, even after adjustments for inflation. As a result, half of single-family detached (SFD) homes started in New England were built on lots valued at or more than $200,000. In the Pacific division, which has the smallest lots, median lot value reached $143,000 in 2021, the second most expensive value in the nation. As a result, Pacific division lots stand out for being the most expensive in the nation in terms of per acre costs.
Spartanburg Association of Realtors Monthly Indicators for August CLICK HERE Spartanburg County Inforamtion CLICK HERE for Permit Information, Planning etc. NAHB Addressing the Supply Chain Crisis CLICK HERE NAHB research and activism is funded by your membership in your local HBA. Thank you for your support of us and the building industry. South Carolina Legislature CLICK HERE
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