Home Builder Confidence Builds Stronger For Fourth Consecutive Month

 

Homebuilder sentiment was strong at the end of 2021 according to the NAHB/Wells Fargo Housing Market Index (HMI). This is good news for the home building market despite the inflation scares and material shortages. The NAHB/Wells Fargo Housing Market Index (HMI) reported the builder sentiment in the market for newly-built single-family homes moved one point higher to 84 in December.

As for the regions, the three-month moving averages for regional HMI scores rose in all of the four regions. Both the West and South saw an increase to 87, and the Northeast and Midwest both were are 74. The seasonally adjusted rates for the four regions were the highest in the South at 89, in the West 87, in the Northeast 79, and in the Midwest at 74.

“While demand remains strong, finding workers, predicting pricing and dealing with material delays remains a challenge,” said NAHB Chairman Chuck Fowke. “Policymakers need to work on supply chain improvements and controlling costly inflation. Addressing lumber tariffs would be a good place to start.”

“The most pressing issue for the housing sector remains lack of inventory,” said NAHB Chief Economist Robert Dietz. “Building has increased but the industry faces constraints, namely cost/availability of materials, labor and lots. And while 2021 single-family starts are expected to end the year 24% higher than the pre-Covid 2019 level, we expect higher interest rates in 2022 will put a damper on housing affordability.”

Click Here For the Source for the Information.

Ways Builders Are Increasing Energy Efficiency

Home Energy Rating System (HERS) Index is the standard that is used in the industry to measure a home’s energy efficiency. This system is nationally recognized and is used across the country when inspecting and calculating a home’s energy performance. Homebuilders today are finding ways to make sure the homes they are building have low HERS scores.

HERS Index standard scores are determined using energy modeling software. The most common HERS Index score in 2019 was 58 (the standard ranged was between 45 and 80). When building a

home, the lower the score, the more energy-efficient the home is. Here are some useful tools builders are using to make sure their new construction homes are energy efficient.

Builders are using specific heating equipment. In recent studies, ground source heat pumps had the lowest score ranges. Air source heat pumps had the best scores overall which ranged between -20 and 5. Traditional furnaces had high scores ranging from 25 to 70 and electric resistance heating scored the highest ranging 75 or higher.

Heating and cooling efficiency also plays a part. Seasonal Energy Ratios (SEERS), as well as the Annual Fuel Utilization Efficiency (AFUE), play a big part. Homes that scored lower on the HERS index from 25 to 40 had SEER ratings of 17-24. Homes with a SEER around 14 scored a high HERS index score of 45 and above. For an Annual Fuel Utilization Efficiency in the mid-80s, the HERS score ranged from 70 – 75. For a lower HERS score (below 55) the AFUE will need to be 90 and above.

Another tool to look at is the mechanical ventilation type. To achieve a HERS score of 40 and below, most homes must only have Energy Recovery Ventilators (ERVs) and Heat Recovery Ventilators (HRVs). Homes with HERS scores that range between 40 and 50 had exhaust only and those with HERS scores between 56 and 80 had air cyclers only.

Solar photovoltaics (PV) is a specific technology that changes sunlight into direct current electricity by using semiconductors. How it works is when the sun hits the semiconductor (within the PV cell) electrons are freed and the form an electric current.  Homes with PV had a HERS score of 30 and below. Homes without the solar photovoltaics had a Home Energy Rating System Index score of 40 and higher.

Homebuilders have vast resources when it comes to building an energy-efficient home. When a builder combines multiple efficient products with sound building science principles they will have a greater potential for building a great energy-efficient home.

Click Here For the Source of the Information.

2020 Is The Year For Millennial Home Buyers

“After a decade of cocooning, millennials want to buy homes that represent value, which is in keeping with the way they shop for everything else,” CNBC’s Jim Cramer said. “The delay in … homebuying is over, the spending is just beginning.”

The year 2020 will bring a new era to dominate the housing market. According to CNBC.com, ” Millennials are expected to be the largest single cohort of homebuyers in 2020.”

“People who have jobs and feel confident in the future are taking advantage of affordable luxury

wherever they can find it,” Cramer said. “I think that gives you great insight into the behavior of millennials, or at least the millennials who have money to spend.”

This generation, born between 1981 and 1997, make up around 33% of the homebuyers which is up from 20% just five years ago.

“In fiscal year 2019 over 20% of our closings had one purchaser 35 years old or under,” CEO of Toll Brothers Doug Yearley said.

Toll Brothers is the nation’s leading builder of luxury homes. The company builds in 23 states and the District of Columbia. The company had a strong fourth quarter in 2019. They reported earning $1.41 per share on revenue of $2.38 billion. Toll Brothers sold 2,672 units in home sales that totaled $2.29 billion in a three-month period.

Toll Brothers is focusing its affordable luxury communities on move-up, active adult and millennial

buyers. The older more affluent millennials have been the biggest factor in this decision.
“This market is strong and demographics suggest it will grow over the next decade as millennials mature,” Yearley said.

Another big homebuilder, Taylor Morrision, agrees that millenials are on an upward trend when it comes to homebuying. The homebuilder, which builds in nine states among the south, southwest and midwest regions, reports that a good majority of their homebuyers are millennials.

“People who have jobs and feel confident in the future are taking advantage of affordable luxury wherever they can find it,” Cramer said. “I think that gives you great insight into the behavior of millennials, or at least the millennials who have money to spend.”

Click Here For the Source of the Information.

Builders See an Almost 13% Increase in New Home Sales

Throughout all regions of the United States in February, the real estate industry had something to celebrate. All regions increased new home sales compared to the same time in February, 2016.  In the South, new home sales increased 3.6%, which was 7.9% higher than the past year.  Approximately 592,000 new homes sold in February, 2017, which was 12.8% higher than last year and 6.1% higher than January new home sales.
Bloomberg analysts had estimated 565,000 in new home sale for this time period but reporting from the Census Bureau and Department of Housing showed differently.  The number of new homes available for sale going into the month of March, 2017 was approximately 266,000, which is a 5.4 month’s supply of new homes for sale.  In January, this amount was a 6.4 month’s supply, but February’s new home sales numbers trimmed this amount substantially.

The average price of a new home sold for the month of February stood at $296,200, which was lower than January’s average price of sold new homes which was $308,200.  The total average sales price increased substantially month-over-month from $355,300 to $390,400.  It increased even more when compared to February one year ago – up from $349,400.

All of this is great news for new home builders and custom home builders building new homes for sale throughout Southeast Louisiana and the rest of the Gulf Coast.  Ron Lee Homes is a St. Tammany Parish custom home builder who is building and selling new homes throughout West St. Tammany Parish.  For more information about building your new home, Contact Us at 985-626-7619 or E-mail Info@RonLeeHomes.com.

Click Here for the Source of the Information.