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Focus on Construction: Update on Home Builders - News from Washington, D.C.

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RubinBrown recently attended the mid-year board meeting of the National Association of Home Builders in Washington, D.C. 
June 14, 2019
RubinBrown recently attended the mid-year board meeting of the National Association of Home Builders in Washington, D.C.  The following are some highlights from the event:

Economic Outlook
  • The HMI (Home Market Index), which measures how builders feel about sales and buyer traffic increased to 66 in May. It has now been over 50 for over 5 years.
  • Single family starts, although currently down, are expected to be flat with 2018. Declining interest rates are expected to fuel a strong second half to 2019. 2020, as of now, is expected to be up slightly.

Builder Concerns

Labor, labor, labor, is a huge issue throughout the country. Trades reported with the biggest shortages in order:

  • Carpenters – Rough
  • Carpenters – Framing
  • Carpenters – Finished
  • Concrete Workers
  • Brick Layers

Most significant concerns to builders in order (% reporting):

  • Labor – 82%
  • Building Material Prices – 69%
  • Cost of Lots – 63%
  • Negative Media Reporting making people cautious – 61%

All the talk with tariffs has the industry worried with potential higher material costs.

Did You Know?

  • 25% of the current cost of housing is due to regulation costs
  • Home builder sale prices have increased 40% since 2013
  • Subcontractor labor costs were up 5.9% in 2018 and 7.2% in 2017
  • The overall construction industry is currently 360,000 jobs short of capacity needs
  • Housing affordability is also getting a lot of attention in Congress. Two concepts being discussed to improve affordability include the use of more subsidies and simplifying regulations that are impeding density.

 

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