RubinBrown leaders recently attended the International Builders Show in Las Vegas. Attendance this year exceeded 70,000 with much optimism being displayed by many in the industry. The following are some highlights:
- Housing starts hit a 12 year high in December 2019.
- The HMI (Home Market Index) which measures how builders feel about sales and buyer traffic remains strong at 75.
- 2019 starts were up 2% from 2018 activity. 2020 and 2021 are predicted to be up 3% and 1% respectively.
- Demand is expected to remain strong due to:
- Existing home inventory being at an ALL TIME low.
- Interest rates also continue to be at record lows and are not expected to increase until well into 2021, at the earliest. Some predict the Fed will actually have one more rate cut the first quarter of 2020.
- Increasing number of household formations.
- Home prices increased 3.6% in 2019 and are expected to climb 4.8% in 2020.
According to a recent survey, the top 5 issues affecting builders are:
1. Availability of labor
2. Building material prices
3. Availability of lots
4. Impact fees
5. Gridlock in Washington D.C.
- “Affordability” remains a huge issue in most markets.
- Building codes are coming under attack around the country mostly related to costly energy and environmental concerns.
Did You Know?
- It is the first time in history that interest rates and unemployment are both below 4%.
- 1 of 5, 25-34 year olds are still living at home.
- There are an estimated 300,000 construction jobs that are not filled.
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