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.
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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