Lower Interest Rates Mean it's a Great Time to Build
According to this recent article from the NAHB, lower interest rates helped to boost sales of new homes last month. If you're thinking of buying or building a new home, now is a great time to do it. In addition to lower interest rates, builders are building more homes that are affordable. Last month, 50% of new home sales were priced under $300k. Finding buildable lots and enough labor to build the new homes remains a concern. Continue reading the complete article below.
Sales of newly built, single-family homes rose to a seasonally adjusted annual rate of 692,000 units in March after a slightly revised February report, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the highest sales pace since November 2017.
"These numbers indicate that builders who can produce housing at affordable price points will experience sales growth,” said Greg Ugalde, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Torrington, Conn. “However, builders are still dealing with a shortage of construction workers and buildable lots, which limits housing affordability.”
“We saw a large gain at lower price points where demand is strong. In March of 2019, 50 percent of new home sales were priced below $300,000, compared to 39 percent in March of 2018,” said NAHB Chief Economist Robert Dietz. “These are the price points that are attractive for renters seeking to become homeowners.”
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 March reading of 692,000 units is the number of homes that would sell if this pace continued for the next 12 months.
The inventory of new homes for sale was 344,000 in March, representing a 6 months’ supply. The median sales price was $302,700 with strong gains in homes sold at lower price points. The median price of a new home sale a year earlier was $335,400.
Regionally, and on a year to date basis, new home sales fell 17.6 percent in the Northeast, 8.1 percent in Midwest and 5.9 percent in the West. Sales rose 9.6 percent in the South, where 58 percent of new home sales occurred in March.
Builder Confidence Holds Steady in March
In this recent press release from the National Association of Home Builders (NAHB), builder confidence remains strong through March. As the spring buying season begins, builders are encouraged by a healthy market. Affordability is a still a concern, as is the labor shortage and a shortage of buildable lots, but lumber prices have decreased and the economy continues to do well. You can read the complete press release below.
Builder Confidence Holds Steady in March
Builder confidence in the market for newly-built single-family homes held steady at 62 in March, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today.
“Builders report the market is stabilizing following the slowdown at the end of 2018 and they anticipate a solid spring home buying season,” said NAHB Chairman Greg Ugalde, a home builder and developer from Torrington, Conn.
“In a healthy sign for the housing market, more builders are saying that lower price points are selling well, and this was reflected in the government’s new home sales report released last week,” said NAHB Chief Economist Robert Dietz. “Increased inventory of affordably priced homes – in markets where government policies support such construction - will enable more entry-level buyers to enter the market.”
However, affordability still remains a key concern for builders. The skilled worker shortage, lack of buildable lots and stiff zoning restrictions in many major metro markets are among the challenges builders face as they strive to construct homes that can sell at affordable price points.
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index 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.
The HMI component charting sales expectations in the next six months rose three points to 71, the index gauging current sales conditions increased two points to 68, and the component measuring traffic of prospective buyers fell four points to 44. Looking at the three-month moving averages for regional HMI scores, the Northeast posted a five-point gain to 48, the South was up three points to 66 and West increased two points to 69. The Midwest posted a one-point decline to 51.
Editor's Note: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be found at nahb.org/hmi. More information on housing statistics is also available at housingeconomics.com.
Best of IBS Product Winners at 2019 International Builders' Show
Last month we attended the 75th International Builders' Show in Las Vegas. We weren't alone more than 100,000 attendees at both IBS and KBIS. It was a great show and we learned a lot while we were there.
There were more than 300 entries in the Best of IBS Awards. Awards were given to exhibitors with a product or line that shows the best combination of design, functionality and innovation, as well as its usefulness to consumers and/or home builders.
The winners were:
- Best in Show Winner: Easy Connect Joining System by Andersen Windows, Inc.
- Best Kitchen Product: Cafe 4-in-1 Oven with Advantium Technology by GE Appliances
- Best Bath Product: Redi Your Way by Tile Redi USA, LLC
- Best Energy Efficient Product: POWERHOUSE™ 3.0 Solar Shingle by RGS Energy
- Best Green Building Product: Heatlok HFO by Demilec Spray Foam Insulation
- Best Home Technology Product: Leviton Load Center Wi-Fi enabled Circuit Breaker by Leviton Manufacturing Company
- Best Indoor Living Product: Heat & Glo Foundation Series Luxury Gas Fireplace by Heatilator, Heat & Glo and Majestic (Hearth & Home Technologies)
- Best Outdoor Living Product: CAMO DRIVE by CAMO Fasteners and The Soho by Hampstead
- Best Window and Door Product: Easy Connect Joining System by Andersen Windows, Inc.
- Most Innovative Building Material Product: NTI GF200 Combi-Furnace by NTI Inc.
“Judges evaluated an impressive array of more than 300 product entries in nine categories up for consideration for this year’s Best of IBS Awards,” said Buddy Hughes, NAHB Conventions and Meetings Committee Chairman. “The competition was fierce, but these winners truly represent the best of the best in terms of innovation, design and functionality of the products going into today’s homes.”
Awards were given to exhibitors with a product or line that shows the best combination of design, functionality and innovation, as well as its usefulness to consumers and/or home builders.
For more information on the Best of IBS Awards, visit buildersshow.com/bestofibs.
Recap of the International Builder's Show
Last month Preston Wood & Associates attended the International Builders' Show in Las Vegas, NV. It was the 75th anniversary of the show hosted by the National Association of Home Builders.
The show was a huge success with more than 67,000 home building professionals from around the world attending educational seminars and visiting more than 2000 exhibitors.
IBS and the Kitchen & Bath Industry Show (KBIS) once again combined for the annual Design & Construction Week® (DCW), which drew a total of more than 100,000 attendees.
This year the International Builders' Show returned to Las Vegas after being in Florida for the past several years. Next year the event will also be in Las Vegas - January 21-23, 2020.
Hopefully it will be warmer next year. This year it was unseasonably cold and it actually snowed twice while we were there. Historic? Yes, but a little more warmth would be appreciated.
The international Builders' Show is the premier event for everyone involved in home building. We rubbed shoulders with home builders, architects, vendors, suppliers, marketers and experts in the industry.
We attended many educational classes, always the most informative part of the show and the part we look forward to most next to meeting others in the industry. This year the classes were exceptional and incredibly informative. From marketing strategies to the latest in tech news, these classes are always so helpful. There were more than 130 education sessions this year, all led by professionals in the industry.
In addition to the educational seminars, the show is about the exhibitors. Truly an international show, we saw products from all over the world.
What's trending? Many things. Of course tech will continue to lead the way. Homeowners want smart homes and they want it easy to use and install. Smart home features ranged from the simple - Amazon's Alexa being included in new homes like you'd expect to see light fixtures or plumbing fixtures. It's simply standard now, to the more complex - smart windows, a home that anticipates your behavior and acts accordingly. Privacy is always a concern, but homeowners want a home that is a step ahead at all times. Smart homes are just going to get smarter and smarter over time.
Color was another trend that seemed to be everywhere. From incorporating color in sinks and tubs, instead of the standard white, though there was still plenty of classic design as well, to walls of knobs in a wide variety of colors you wouldn't expect - purples, reds, yellows.
Pet comfort continues to be important to homeowners and it showed at the International Builders' Show with many exhibits featuring pet products. Some of the more memorable included a stainless walk-in sink for bathing your best fur friend.
IBS was great this year and we're looking forward to next year's show already!
New Home Sales Higher Than Expected in November
In this recent article from the National Association of Home Builders (NAHB), new home sales were higher than expected in November 2018. While this is the highest sales pace since March of 2018, sales are down 7.7 percent on a year-to-date basis. Continue reading below for the full article from the NAHB.
New Home Sales Higher Than Expected in November
Sales of newly built, single-family homes rose to a seasonally adjusted annual rate of 657,000 units in November after an upwardly revised October report, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the highest sales pace since March 2018. However, on a year-to-date basis, sales are down 7.7 percent from this time in 2017.
The sales report was delayed due to the partial government shutdown.
“The sales increase was fueled by a notable uptick in homes sold at the affordable end of the market,” said Randy Noel, chairman of the National Association of Home Builders (NAHB) and a custom home builder from LaPlace, La. “There is clearly a demand for new home homes even as builders continue to grapple with supply-side challenges, including shortages of lots and labor and higher building material costs stemming from tariffs.”
“Solid job growth and growing household formations should support future demand for housing even as builders continue to address mounting affordability woes,” said NAHB Chief Economist Robert Dietz. “Builders are doing all they can to hold the line on costs to meet this demand, particularly at the entry-level market.”
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 November reading of 657,000 units is the number of homes that would sell if this pace continued for the next 12 months.
The inventory of new homes for sale rose to 330,000 in November. The median sales price fell to $302,400, as the market has shifted to lower-cost houses.
Regionally, on a monthly basis, new home sales jumped 100 percent in the Northeast, 30.5 percent in the Midwest and 20.6 percent in the South. Sales fell 5.9 percent in the West.
International Builders Show
Preston Wood and Associates are currently attending the International Builders' Show in Las Vegas Nevada. We've been looking forward to this event for several months and can't wait to share all that we've learned while we're here.
The International Builders' Show is hosted by the National Association of Home Builders (NAHB), it is the largest annual light construction show in the world. It takes place this year in Las Vegas from February 19th - 21st. Next year it will also be held in Las Vegas. In 2021 and 2022 it will be held in Orlando, FL.
The show features more than 1,500 manufacturers and supplies from around the world sharing the latest products and services in the residential home building industry.
In addition to all the newest home building products and services there's also plenty of eduction to be had. Topics range from sales and marketing to construction and code. We're interested in several including the 50 Storage & Home Organization Trends, Must-Have Design Ideas for Today's Busy Lifestyle, and Sweet Home Alabama: A Case Study in Creating a Thriving 55+ New Home Neighborhood.
Of course we're also excited about connecting with home builders, designers, developers and everyone else that helps to make today's homes so amazing. IBS is a great place to connect with those from all over the globe and a fun way to learn about what's coming next with regard to home design and all it's features.
There is truly something for everyone at the NAHB International Builder's Show and we can't wait to share it with you.
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