Building Material Shortages Seen
Home builders and lumber dealers are reporting significant shortages of key home building materials such as lumber and wall board, according to surveys by the National Association of Home Builders (NAHB) and the National Lumber and Building Material Dealers Association (NLBMDA).
Among builders, the highest incidence of shortages was for oriented strand board (OSB), with 22 percent of builders reporting shortages, followed by wall board (20 percent), framing lumber (18 percent) and plywood (18 percent). With the exception of wall board, the lumber dealers reported greater shortages of these products than the home builders. Among lumber dealers, 27 to 28 percent reported shortages of OSB and plywood, 36 percent reported shortages of framing lumber and 12 percent reported shortages of wall board.
Energy
Home Performance Bill Introduced in Congress
A bill to create a home performance-based rebate program that would provide an incentive to homeowners or contractors based on predicted energy savings up to $8,000 for a 50 percent energy performance improvement was recently reintroduced in the U.S. House of Representatives. The Home Owners Managing Energy Savings (HOMES) Act, H.R. 2128, emphasizes a technology-neutral approach based on performance with a quality assurance requirement. The HOMES Act was first introduced in the 112th Congress. Representatives David McKinley (R-WV) and Peter Welch (D-VT) re-introduced the bill.
Consumer Preferences
Size of Homes Grows
As the residential market improves, the size of homes has grown in response. This is the case for high-end and custom homes as well as additions to existing homes. Preferences for accessible space, like open-space layouts and single-floor designs, have also continued to rise, according to findings from the American Institute of Architects (AIA) Home Design Trends Survey for the first quarter of 2013. Homeowners have also expressed a desire to blend indoor and outdoor spaces.
New Construction
Housing Starts Gain 6.8 Percent
Housing starts rose 6.8 percent in May primarily on the multifamily side, according to newly released data from HUD and the U.S. Census Bureau. While single-family housing starts held at a solid but virtually unchanged pace of 599,000 units in May, multifamily production bounced back from an over-correction in the previous month with a 21.6 percent gain to 315,000 units. From a regional perspective, combined starts activity was mixed in the month, posting gains of 17.8 percent in the South and 5.7 percent in the West and declines of 9.0 percent in the Northeast and 13.7 percent in the Midwest.
Issuance of new building permits declined 3.1 percent to a seasonally adjusted annual rate of 974,000 units in May.
Market Index
Builder Confidence Hits Milestone
Builder confidence in the market for newly-built single-family homes hit a significant milestone in June, surging eight points to a reading of 52 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Any reading over 50 indicates that more builders view sales conditions as good than poor. This is the first time the HMI has been above 50 since April 2006, and he eight-point jump in the index was the biggest one-month gain since August and September of 2002.
Housing Markets
List of Improving Markets Rises
The number of U.S. housing markets on the mend rose by five to a total of 263 in June, according to the National Association of Home Builders/First American Improving Markets Index (IMI). The list includes entrants from 49 states and the District of Columbia. New entrants included such geographically diverse metros as Salinas, Calif.; Sioux City, Iowa; Chicago, Ill.; Topeka, Kan.; Baton Rouge, La.; Laredo, Texas; and Philadelphia, Pa.
Real Estate
Inventory Constraints Ease
The number of for-sale listings nationwide on Zillow was down in early June compared to the same time last year, but has improved since the beginning of the year as national inventory shortages eased during the spring selling season, according to online real estate marketplace. The overall number of was down 12.2 percent year-over-year earlier this month, a less severe crunch than the 17.5 percent shortfall recorded in January. In other words, inventory of for-sale homes on Zillow improved by 5.3 percentage points between January and June, controlling for seasonality.