New Home Sales at Highest Pace Since September 2006
Building for the Future
Southeastern Louisiana Home Builders Association, Inc.
In another indicator that housing continues to lead the economy forward, sales of newly built, single-family homes in August topped the 1 million mark and reached their highest pace since September 2006.
Sales increased 4.8% to a seasonally adjusted annual rate of 1.01 million units, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
The August rate is 43.2% higher than the August 2019 pace.
“Surging sales are consistent with record builder confidence levels stemming from higher buyer traffic, historically low interest rates and a shift in demand for lower density markets,” said NAHB Chairman Chuck Fowke. “However, higher lumber costs and limited building material availability in some markets signify we could see higher prices down the road.”
“New home sales are now 15% higher on a year-to-date basis, with gains in all regions,” said NAHB Chief Economist Robert Dietz. “But with inventory at just a 3.3 months’ supply, more construction is needed. The challenge will be whether materials and labor are available.”
That 3.3 month's supply means just 282,000 new single-family homes are for sale, 40% lower than August 2019. The current months’ supply is the lowest in the history of the data series, which goes back to 1963. Of the inventory total, just 54,000 are completed and ready to occupy.
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Apartment Absorption Rate Falls to 45%
The absorption rate of unfurnished, unsubsidized apartments (the share rented out in the first three months following completion) fell to 45% in the first quarter of 2020 (from 53% in the first quarter of 2019), according to data from the U.S. Census Bureau’s Survey of Market Absorption. This is the lowest absorption rate for the first quarter since 1986.
The decline in the absorption rate is related to the emergence of COVID-19 in the US.
HUD Secretary Carson Speaks with NAHB
HUD Secretary Ben Carson on Sept. 24 participated in an exclusive webinar that more than 1,000 members and invited guests registered to attend. He discussed the need to address the lumber crisis as well as HUD’s actions to address housing needs in response to COVID-19.
Carson told the NAHB members that lumber prices are “a big roadblock” and that he would seek to “elevate” this issue by engaging with other top administration officials.
Is Now Open
Registration is open for the 2021 NAHB International Builders’ Show® (IBS), the premier event in the resident- ial construction industry. The in-person show will follow all safety protocols set forth by the CDC and federal, state and local government agencies.
IBS will move back to the Orange County Convention Center in Orlando, Feb. 9-11, where it will again co-locate with the National Kitchen & Bath Association’s Kitchen & Bath Industry Show® (KBIS).
CDC Imposes Eviction Moratorium
The U.S. Centers for Disease Control and Prevention (CDC) has issued a nationwide order that will halt millions of U.S. renters from being evicted through Dec. 31, 2020. The CDC said halting residential evic- tions of any covered tenants for failure to pay rent is necessary to prevent the further spread of COVID-19.
NAHB is deeply concerned the CDC’s rental eviction moratorium through the end of the year will result in negative economic consequences without dedicated funding for rental assistance.
ICC Board Agrees with NAHB on Appeal
The ICC Board of Directors on Sept. 23 agreed with NAHB’s appeal related to a proposed change to the International Energy Conservation Code (IECC) that dealt with the efficiency of water heaters. NAHB and others argued, and ICC agreed, that the changes would have preempted federal law or would have exposed adopting jurisdictions to potential litigation related to the proposed requirements.
The ICC Board decided to reject RE126-19 (and RE107-19) on the basis that “potentially preempted provisions in the I-Codes are inconsistent with the spirit, intent and mission of the Code Council.”
The White House recently joined NAHB in opposing House energy bill H.R. 4447 due in part to problematic language regarding building codes that would harm housing affordability.
NAHB has come out in strong opposition to the legislation because it would needlessly raise home construction costs while doing little to boost energy efficiency in the housing sector.
NAHB ran a strong grassroots campaign asking members to reach out to their
congressional members and urge them to oppose the legislation.
Over the past two years, NAHB has also met with the White House to discuss concerns about the building code language. NAHB's leadership was pleased to see that the administration shares the association's concerns.
The full Statement of Administration Policy can be viewed on the White House's website.
Video Highlights 2020 NGBS
With so many green rating systems available, understanding how each one compares to the others is imperative for making a choice that works best for your project, climate zone and market. The recent release of the 2020 National Green Building Standard™ (NGBS) provides a great opportunity to conduct a side-by side comparison, starting with energy performance — an easy element to measure.
Buyers also can relate to energy perform- ance without difficulty; they desire energy efficiency, whether it’s the numbers they see on their electric bill or the familiar ENERGY STAR label.
NAHB has produced a two-minute video highlighting the strengths of the 2020 NGBS that members can share on social media.
EPA Finalizes Reg Guidance
The EPA has finalized a rulemaking that establishes regulatory standards for all EPA regulatory guidance documents. EPA’s final rule, intended to increase transpar- ency and access, has four key elements:
Establishes a regulatory definition for the “guidance documents” and “significant guidance documents” that are subject to the rule’s requirements.
Responds to President Trump’s directive under Executive Order 13891, “Promoting the Rule of Law Through Improved Agency Guidance Documents.”
Requires “significant regulatory guidance documents” to be subject to public com- ment before being finalized by the Agency.
Creates a process by which anyone can petition the agency to modify or withdraw any existing regulatory guidance document.
White House Joins NAHB in Opposing House Energy Bill
Calendar of Events
NAHB Senior Officers and senior staff held a 30-minute virtual meeting with Commerce Secretary Wilbur Ross on Sept. 25 to discuss the growing problem that escalating lumber prices and supply shortages are having on the housing industry and economic recovery.
During the discussion with NAHB leaders, Ross repeatedly acknowledged how “critical” housing is to the U.S. economy.
NAHB Chairman Chuck Fowke and Second Vice Chairman Jerry Konter told the secretary how higher costs are affecting their businesses, with Konter adding that his business is planning for reduced sales due to higher lumber costs.
According to Random Lengths, lumber prices have skyrocketed more than 170% since mid-April, and the residential construction industry has absorbed the largest four-month increase in lumber prices since such data was first recorded in 1949.
NAHB Chief Economist Robert Dietz told Ross that this unprecedented lumber price spike has added more than $16,000 to the price of a typical new single-family home and $6,000 to the price of an average new multifamily unit.
Rising lumber prices are clearly making it much harder to build homes that are affordable to low- and moderate-income families.
NAHB Third Vice Chairman Alicia Huey and Immediate Past Chairman Greg Ugalde told the secretary what the association has heard from members about how the lumber crisis is hurting their businesses and impeding an even more robust housing upturn.
Secretary Ross told NAHB leaders that lumber mills are concerned that the ongoing housing upturn is temporary, and Dietz assured Ross that the solid housing market is sustainable.
NAHB stressed that between harvesting and mill capacities, the fact that most mills are running at two shifts rather than three is the greater problem.
View more NAHB actions on the lumber issue here.
NAHB Conveys Urgent Concerns on Lumber with Commerce Secretary
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