2021 has been very busy. A fact you already know. Now that the State Legislative Session is cooling down, we will invest more time in bring you this news roundup.
This week’s Builder news will focus on recent economic reports on home sales and materials .
|
|
Strong Housing Demand Despite Conflicting Challenges
|
|
Sales Activity
Housing market activity dipped 3.7% from February to March 2021, bringing March’s existing home sales to 6.01 million, a 12.3% increase from March 2020. At the same time, it marked the 109th consecutive month of yearly gains for existing home prices for all housing types. Median existing home prices reached a new high $329,100 (nationally). ProBuilder
|
|
The U.S. Census Bureau reported that new home sales occurred at a seasonally adjusted annual rate of 1.02million in March. This beat economists forecast of 880,000 new home sales last month. The largest sales gain occurred in the South, with a 40% jump.
In today’s housing market, home builders continue to see elevated demand, in large part because buyers are struggling to find existing-homes to purchase. New home the inventory in March only equated to a 3.6-month supply. Of the new homes sold in March, only about a quarter of them had already been constructed — most were instead under construction or not yet started. MarketWatch
|
|
We interrupt this email…
Asking you to thank our Annual Sponsors for their support in 2021.
|
|
“Our members are seeing strong buyer traffic as continued low mortgage rates are helping fuel sales,” said NAHB Chairman Chuck Fowke. “However, builders still grappling with major supply chain issues and soaring materials costs, which are causing construction delays and preventing them from adding to the already very low inventory.” NAHB Now
|
|
Lumber & Other Materials:
|
|
At this point we all know that the price of lumber is too high. Plus, the cost and availability of other materials is a constraining factor on your business.
NAHB recently asked builders about their reactions to the rising and volatile lumber prices in its April 2021 survey for the NAHB/Wells Fargo Housing Market Index (HMI). Nearly half (47%) of single-family builders in the HMI panel indicated that they were including price escalation clauses in their sales contracts as their primary mitigation effort. NAHB Now 04/23
Other efforts include pre-ordering lumber (29%) and obtaining lumber price guarantees from suppliers (22%). According to responses, prices were typically guaranteed for 15-29 days (42% of respondents reported) or 30-59 days (33% of respondents reported), for a median length of 28 days.
|
|
“We are pricing each unit on a case-by-case basis, and only after we have a commitment on actual lumber costs for that unit,” noted Thomas Troy, a builder in New Jersey, in a testimonial. “We are at the point where we are withholding new sections in some projects.”
Nearly one in five builders (19%) have also, unfortunately, had to delay building or sales when costs spike, and 15% indicated they are laying the foundation but pausing before framing. This puts further strain on the much-needed housing supply necessary to help make housing affordable.
|
|
Two quick articles explaining why high demand and limited building supplies are failing the construction industry and driving prices higher.
|
|
Article 1: April 19 – Lumber prices are at a record high – $1,326.70 per 1,000 board feet, or $1.33 per board foot. The lumber supply chain wasn’t quite ready for the high demand. Without a stockpile to rely on, willing lumber buyers have to pay more for the limited lumber that is available. Read more. Article 2: April 22 – But it’s not just lumber, said economist Robert Dietz at the National Association of Home Builders. “Just about all input prices are rising right now in the construction industry.”
Diesel’s up 80%, milled copper and brass are up 44%. “It’s all the literally nuts and bolts – we’re hearing about delays or shortages or price increases from gypsum that goes into drywall, steel brackets to help lay down the concrete foundations for homes,” Dietz said
PS – it is worse for commercial construction.
|
|
You can help – Contact Your Congressmen & Senators
Tell their staff how soaring lumber costs are impacting your customers.
|
|
Housing’s potential to lead the economy forward is limited as long as lumber remains expensive and scarce. Congress needs to push the administration to undertake a thorough examination of the lumber supply chain, identify the causes for high prices and supply constraints, and seek immediate remedies that will increase production.
Since the U.S. does not produce enough lumber to meet domestic needs, Congress can do its part to boost domestic production by doing a better job of more actively managing federal forest lands in an environmentally sustainable manner.
Lawmakers should also urge the White House to make it a priority to work with Canada on a new softwood lumber agreement that would end tariffs that are contributing to extreme price volatility.
Learn more about NAHB’s efforts to provide relief for rising material costs here.
|
|
Healthcare Notice for HBAT Members
|
|
Due to the COVID-19 pandemic, the federal Health Insurance Marketplace is being reopened thru May 15th.
|
|
The HBATBT Health Plan is open for quoting and enrollment, as well.
The HBATBT Health Plan team would like to help you select a policy that meets your needs and budget. Take a look at all your available options before making a decision.
|
|
|
Builders Make Plans to Get Together
|
|
Spend a few days at the beach networking with other HBA members!
We’ve all been cooped up for too long, let’s reconnect with fellow Builders and HBA members at the beautiful Henderson Beach Resort, May 23-26, 2021 at our Summer Meeting in Destin, FL.
Attending the Summer Meeting is a great opportunity to build relationships with members from across Tennessee, learn the latest association and industry developments, and get more involved at the state level. It’s also a chance for some much needed relaxation and fun at the beach.
Registration & Hotel
We are excited to return to Destin’s 5-star luxury resort. The Henderson is Florida’s finest beach resort on the Northwest Gulf Coast. HBAT has a room block reserved at a discounted rate of $265 per night. The room block deadline is May 12, 2021.
|
|
Participate in Member Savings Programs
|
|
Home Builders preach the benefits of doing business with a member. We want you to do business with like-minded people who support our industry. We also encourage you to take advantage of savings by participating in Rebate Programs.
Builders and Remodelers, if you’re not participating in this rebate program, you’re leaving money on the table. Register and claim your rebates www.HBATrebates.com
|
|
NAHB has Additional Savings Programs for Business Savvy Members
Whether it’s a discount on a product or service or a more efficient way to operate, the smart business person is always looking at ways to cut costs and maximize returns.
Through agreements with more than 20 national companies, NAHB offers exclusive discounts on a variety of products and services that can benefit your business, employees and family.
|
|
|
|
|
|
|
