Reprint from NAHB
September 26, 2012 – Following a substantial gain in July, the pace of new-home sales held virtually unchanged at a seasonally adjusted annual rate of 373,000 units in August, according to newly released figures from HUD and the U.S. Census Bureau.
“New-home sales in August effectively tied the pace they set in the previous month, when they were the strongest we’ve seen in more than two years — so this is really a continuation of the good news we’ve been getting on the housing front,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “Looking at the big picture, sales have been trending gradually upward since the middle of last year as favorable interest rates and prices have driven more consumers to get back in the market for a newly built home.”
“This latest report indicates that new-home sales continue to run at a steady pace that’s well ahead of what we were seeing this time last year, and at this rate, the third quarter of 2012 is going to be well ahead of the second quarter,” noted NAHB Chief Economist David Crowe. “That said, the razor-thin inventory of new homes for sale is very concerning because it indicates that builders aren’t able to access the credit they need to build new homes as demand for them improves.”
Crowe also observed that the share of new homes sold in the higher price ranges ($400,000 and above) rose significantly in August. “This reflects the fact that people who are able to buy homes right now are those in higher-income ranges who have cash and equity on hand, while first-time buyers are having a tougher time getting qualified for a mortgage,” he said.
Regionally, new-home sales gained in all but one area of the country this August, with the Northeast, Midwest and West posting increases of 20 percent, 1.8 percent and 0.9 percent, respectively. The South was the only region to post a decline, of 4.9 percent.
Meanwhile, the inventory of new homes for sale held at an historic low of just 141,000 units in August, which is a 4.5-month supply at the current sales pace
Based on past Shows we expect 3,000 attendees at this Show next month. Exhibitor details are below to reach the Home Show attendees! Booths now over 90% sold, don’t wait!
Pictured above, left to right: Steve Bomberger, BUILD PAC Trustee; Kevin Kelly, NAHB Second Vice Chairman; Jim Tobin, NAHB Sr. VP & Chief Lobbyist; Fred Fortunato, President HBADE; and Harry Miller, Regal Contractors and Prime Event Sponsor.
WILMINGTON, Sep 19 – Over 50 members of the Home Builders Association of Delaware (HBADE) participated tonight at a fundraiser/silent auction to benefit BUILD-PAC, the Political Action Committee (PAC) of the National Association of Home Builders (NAHB).
BUILD-PAC, or Builders United in Legislative Decisions Political Action Committee, helps elect pro-housing, pro-business candidates to federal office. BUILD-PAC is bipartisan, supporting candidates on both sides of the aisle. BUILD-PAC’s mission is to promote local industry issues at the federal level on topics such as the mortgage interest deduction, availability of credit for new home construction, and accessible, reasonable standards for responsible lending to millions of new home buyers to finance new home purchases. BUILD-PAC has disbursed over $1.5 million to pro-housing candidates this election cycle, and will work to keep housing at the forefront of the economic debate well beyond the November elections.
Tonight’s fundraiser was held at the University and Whist Club in Wilmington, where contributors were able to sample different whiskeys that were paired with cigars. Hors d’oeures were served, and of course non-alcoholic beverages were available.
The silent auction consisted of over a dozen different items donated to BUILD PAC and included Phillies tickets, Eagles tickets and Redskins tickets, gift certificates to local restaurants and food items.
Over $16,000 was raised and all of the admission ticket and sales prices will go to BUILD PAC.
Members – we would like to get as many attendees as possible to this Fall’s Delaware Home Show. This is a sample of the ticket, if you email Hollie at firstname.lastname@example.org she will send you the templates and instructions on how to personalize and print your own tickets so that you can offer your customers FREE admission to the Show.
A set of recent NAHB surveys suggest that the growth in housing will continue. This is a promising sign for home builders, remodelers and other housing industry stakeholders. It is also a hopeful indicator for the economy as a whole, which has underperformed in terms of growth and job creation during 2012.
With respect to the single-family market, the NAHB/Wells Fargo Housing Market Index rose another three points to 40 in September, the highest in more than six years and extending to five the number of consecutive months of increase. All three components also increased to levels last seen five or six years ago.
The component measuring expectations for the next six months broke the 50-threshold, landing at 51. The three-month moving average indexes for all four Census regions also increased from two to five points to 30 for the Northeast, 40 for the Midwest, 36 for the South and 43 for the West.
The uptick in builder confidence was followed by a Census Bureau report of an increase in total housing starts for August. Housing starts increased 2.1% in August to a 750,000 seasonally-adjusted annualized (SAAR) level. The increase was concentrated entirely in the single-family sector increasing 5.5% to an SAAR of 535,000, the highest since early 2010 just before the home buyer tax credit expired. The improvement was broad based with increases in all four Census regions.
Recent quarterly data from the Census Bureau provide details concerning conditions of specific types of single-family building. As of the second quarter of 2012, total townhouse construction increased significantly in recent months, matching a post-Great Recession high set during the home buyer tax credit period.
Quarterly starts of townhouses rose from 11,000 in the second quarter of 2011 to 17,000 during the same period of 2012. Using a one-year moving average, the market share of townhouses now stands at 11% of all single-family starts, up from 10.4% for the first quarter of 2012.
Despite growth for all types of single-family building, the market share for custom home building also remains high as of second quarter 2012. Census data indicate that the number of owner- or contractor-built housing starts totaled 37,000, placing the 1-year moving average of the share of total single-family starts at 28%.
This is down somewhat from the cycle high share of 31.5% set during the second quarter of 2009, a period for which the custom home building sector played an important role of providing jobs and economic growth during the depths of the Great Recession.
The growth seen in builder confidence and single-family housing starts is matched by positive trends in the NAHB/First American Improving Markets Index. The number of improving housing markets across the country rose to 99 in September, up from 80 metros listed as improving in August. The index now includes representatives from 33 states as well as the District of Columbia.
More metros across the country are experiencing a sustained uptick in house prices, employment and new building activity as rising consumer confidence in local market conditions pushes more people to consider a new-home purchase. Existing home sales are on the rise as well, increasing 7.8% from July and up 9.3% from the same period a year ago, according to the National Association of Realtors. That said, overly tight lending conditions for builders and buyers continue to slow the ability of housing to contribute to more robust GDP growth.
Tight lending conditions are confirmed by a recent NAHB survey on acquisition, development and construction (AD&C) financing, which shows that while there may have been some modest easing in lending conditions for new single-family construction loans during the second quarter, that slight improvement was more than offset by tightening on new loans for land acquisition and multifamily condo construction.
In general, for any type of AD&C loan, more than half of builders and developers in the NAHB survey reported that availability of credit was about the same in the second quarter as it was in the first. About 23% said credit had become less available for land acquisition loans, versus 15% for both land development and single-family construction loans.
Meanwhile, the tendency to report declining availability of credit was stronger among builders with fewer than 25 starts. One upbeat finding of the survey was that the practice of lenders tightening terms on outstanding AD&C loans appeared to be receding.
With respect to multifamily construction, the NAHB Multifamily Production Index (MPI) improved for the eighth consecutive quarter with an index level of 54, the highest reading since the second quarter of 2005. The MPI, which measures builder and developer sentiment about current conditions in the apartment and condominium market on a scale of 0 to 100, rose from 51 in the first quarter to 54 in the second quarter.
The Multifamily Vacancy Index (MVI), which measures the multifamily housing industry’s perception of vacancies, increased five points to 36, bringing it back approximately to the level it sustained throughout 2011. With the MVI, lower numbers indicate fewer vacancies. After peaking at 70 in the second quarter of 2009, the MVI declined consistently through 2010, then held steady at either 35 or 36 in every quarter of 2011.
These survey findings suggest that multifamily construction will continue to increase over the long run. For August, Census data indicate that the seasonally adjusted annual rate of starts in buildings with five or more apartments was 208,000. This is a 2.8% decrease from the downwardly revised July starts rate. Despite the monthly drop, this rate is nearly 37% higher than the August 2011 rate of 5+ unit starts. Moreover, the three-month moving average of 5+ unit starts for the month of August is the fourth highest since 2008.
Despite improving housing conditions, other economic factors offer negative headline and substantive risks. The employment market continues to experience lackluster growth. Monthly job openings data from the Bureau of Labor Statistics (BLS) repeat a pattern that has been in place for more than two years: Hiring rates remain positive but with no breakouts while job opening rates increase. This suggests the economy is having problems adding jobs by filling open positions, which in turn holds back housing demand for renter- and owner-occupied housing.
Low hiring rates mean that total employment growth is sluggish. BLS data for August indicated nonfarm payroll employment added a meager 96,000 jobs, down from a revised 141,000 last month. The private sector added 103,000 while the government sector shed another 7,000. Figures for the prior two months were revised downward by a total of 41,000.
The unemployment rate moved down to 8.1% from 8.3% in July. This would be positive news except that it happened for the wrong reason: a shrinking labor force. According to the household survey, the number of persons employed actually declined by 119,000. But the unemployment rate declined because an equal number plus an additional 250,000 workers, previously counted as unemployed, left the labor force.
Persistently high unemployment and softening GDP growth were certainly factors that led the Federal Reserve to announce effectively a new round of quantitative easing (QE). As expected, the FOMC extended its forward guidance, announcing that the Fed funds target rate would remain at its current 0-25 basis point range through mid-2015.
Under QE3, the Fed will purchase $40 billion in agency mortgage-backed securities per month. This combined with the maturity extension program (”operation twist”) and the current principal payment reinvestment practice will increase the Fed’s holdings of longer-term securities by $85 billion per month through the end of the year, reducing long term interest rates and providing support to mortgage markets. However, we expect QE3 to have little real effect on housing markets as appraisals and credit constraints offer more binding restraints on housing demand than mortgage interest rates.
The rate of inflation moved higher in August, with the CPI-U increasing 0.6% on a month-to-month basis. This ended a four-month streak in which the CPI-U was either unchanged or declined, plus it also marked the largest percentage change in overall consumer price levels since mid-2009.
Energy prices accounted for the bulk of last month’s increase in CPI as the energy index surged 5.6% from July 2012. The index for gasoline climbed 9% on a month-to-month basis, with the EIA indicating that the national average retail price of all grades rose from $3.50 to $3.78 per gallon.
Despite the headline risks, positive survey data concerning home building conditions and the growing amount of pent-up housing demand suggest better times ahead for housing. For example, recent NAHB analysis of households containing individuals who are not relatives provide another illustration of pent-up housing demand, which will be unlocked when job market conditions improve.
Reprinted from NAHB Eye on the Economy
Housing starts increased 2.1% in August to a 750,000 seasonally-adjusted annualized (SAAR) level. The increase was concentrated entirely in the single-family sector increasing 5.5% to an SAAR of 535,000, the highest since early 2010 just before the home buyer tax credit expired. The improvement was broad based with increases in all four Census regions. Multifamily starts dropped back to 215,000 SAAR, but the three-month moving average of this more volatile series has remained in the 214,000 to 221,000 levels for more than a calendar quarter.
Housing permits, an indicator of future building activity, dropped back 1% but again due to a more volatile multifamily sector decline from an unusually large level in July. Single-family permits were virtually even with July at 512,000 SAAR with two regions up and two down.
The sustained increase in single-family housing starts began about a year ago when monthly reports were in the low 400,000 range and have since climbed by more than 100,000. The NAHB/Wells Fargo Housing Market Index has shown a similar steady climb from 14 in September 2011 to 40 in September 2012. The steady increase in housing activity returns housing to the more traditional role of leading the economy out of a recession as the rest of the economy hesitates. As housing continues to improve, the 300 jobs per 100 starts will help improve the overall job market.
The housing recovery will be modest because many obstacles remain including limited access to credit for builders and buyers, low appraisals that mean some purchase contracts are cancelled, competition with low-priced foreclosures and distressed sales and, more recently, higher building materials costs that squeeze the already limited builder profits and a limited supply of building lots. NAHB expects to see a continuation of this modest recovery pace and end the year with housing starts at 800,000 SAAR.
Pictured above, left to right: Mary Field, Colleen Evans and Colleen Ostafy all of Noble’s Pond. Kate Cowperthwait and Stephanie Fitzpatrick, both from the National Multiple Sclerosis Society, Delaware Chapter.
Dover, DE – On Saturday, September 8th, Noble’s Pond, Delaware’s premier 55+ community, hosted Girl’s Night Out to Fight MS. The event was part of the Noble’s Pond commitment to supporting the great work the MS Society does, from raising funds for much needed research to providing local programs and services to those afflicted with the disease. “The rate of MS is so high in Delaware, and particularly high among women,” said Colleen Ostafy, the Lifestyle Director at Noble’s Pond and an event organizer whose daughter has multiple sclerosis. “Through efforts like this we can move closer to the day when M S will stand for Mystery Solved.” And in fact, the “Yeah, I Fight Like A Girl” evening moved enough participation to contribute well over $10,500 to the Delaware Chapter of the National Multiple Sclerosis Society. Way to go, Girls!
Members of HBADE that participated: Noble’s Pond, Wells Fargo, Bath Kitchen and Tile Center, Architectural Alliance, and REMN.
Of course joining the fight that night offered more than a few perks for the some 200 women who came out. They were treated to a heavenly Hollywood-esque evening of complimentary wine, signature cocktails and sumptuous hors d’oeuvres from a host of local eateries. Getting behind the cause and serving up tasty treats were area favorites including Abbott’s Grill, Main Street Market, McGlynn’s Pub, Classic Cakes II, Sheridan’s Irish Pub, Vincenzo’s and Vitale’s Ice Cream. The final touch? A Tinsel Town themed delight by Patty Cakes.
Other highlights included a fashion show by Blooming Boutique of Milford, DE, with Tourette Williams providing Mary Kay makeup stylings for the runway models. Harris School of Business provided two talented ladies to style the models hair. Guests also enjoyed a fun-filled silent auction of must-have goodies…everything from Fire Fly concert tickets to handmade quilts, jewelry to gift certificates, wine baskets to spa days. And one lucky lady walked away the winner of a three-day, two- night, loaded-with-extras weekend for two at the Rehoboth Beach Henlopen Hotel in the Girls Getaway Raffle. Included in the weekend is an “Ahhhhhhh” spa day for two at Bad Hair Day Beauty and Body Shop.
All evening long, hot sounds by DJ Dee-Va had ladies up and dancing. While others sat down to soothing chair massages provided by Harris School of Business. And because no Girls Night Out would be complete without shopping, many local retailers were on hand. Barb’s Good Scents, Bead-A-Licious , Celebrating Home, Heart of Smyrna, Lia Sophia, Mary Kay, Pampered Chef, Seestone Jewelry, Suds Bar and Tastefully Simple, all offered up so many irresistible somethings to take home that evening.
While clearly not an evening one would soon forget, C. M. Baker Photography captured complimentary photos of each attendee posed against a Hollywood Hills backdrop. Donating a photo booth as well as providing attendants and bartenders, Circle That Date ensured the good times would just keep on going. And as the party wound down, every lady in attendance received a token of appreciation for their participation in this important effort. Parting gifts included a potted mum compliments of Cerillo Landscaping, as well as a gift bag with an MS T-shirt, gift certificates for Mary Kay products, Chick Fil-A restaurants and more.
Girls Night Out to Fight MS was indeed a rousing success. So much so, that Noble’s Pond has already set the date for a return engagement next year. So save the date. Join the fight. Saturday, September 21, 2013. See you there?
Noble’s Pond is an amenity rich, active adult community, filled with yesterday’s charm but created for today’s active lifestyle. Located just minutes from downtown Dover, Delaware, the Community offers unique floor plans, exquisite homes, a breathtaking clubhouse and pool, all situated amid the serene surroundings of Noble’s Pond. The Noble’s Pond Welcome Center, Clubhouse and Model Homes are open Monday through Saturday 10 AM to 5 PM and Sunday Noon to 5 PM. For more information, call 1.888.222.0030 or visit http://www.noblespondhomes.com
Join us at the Wynn in Las Vegas, selected hotel for the Delaware delegation! Members register now and get the 3-day FREE expo pass. By show time this will rise to $125. Don’t wait.!