The Nail, August 2021

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NAIL The official magazine of Home Builders Association of Middle Tennessee President Steve Shalibo Vice President Nick Wisniewski Secretary/Treasurer Brandon Rickman Executive Vice President John Sheley Editor and Designer Jim Argo Staff Connie Nicley Hannah Garrard

THE NAIL is published monthly by the Home Builders Association of Middle Tennessee, a non-profit trade association dedicated to promoting the American dream of homeownership to all residents of Middle Tennessee.

SUBMISSIONS: THE NAIL welcomes manuscripts and photos related to the Middle Tennessee housing industry for publication. Editor reserves the right to edit due to content and space limitations.

POSTMASTER: Please send address changes to: HBAMT, 9007 Overlook Boulevard, Brentwood, TN 37027.

Phone: (615) 377-1055.

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FEATURES 9 Silver Sponsorships available for the 2021 golf event

Time is running out! Secure a Silver Sponsorship for the big event and join us on the course during the tournament this month.

11 Prospective home buyers still becoming active buyers An NAHB reports shows that the share of prospective buyers becoming active buyers has increased for six straight quarters.

12 Showcase House program accepting contributions

Donate materials and/or labor to the HBAMT’s Showcase House program. There are currently two Showcase projects underway.

DEPARTMENTS

Advertise in

THE

NAIL Email jargo@hbamt.org for more details!

6 News & Information 13 SPIKE Club Report 14 August Calendar 14 Chapters and Councils

ON THE COVER: The share of prospective buyers becoming active buyers continues to increase. See page eleven (11) for more details.

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NEWS&INFO

New home sales fall in June as supply-chain challenges remain

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ales of newly built, single-family homes fell 6.6% in June to a 676,000 seasonally adjusted annual rate, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The June number follows downward revisions to the May estimate and marks the lowest rate since April 2020. Despite the recent cooling trend, new home sales are up 13.5% on a year-to-date basis.

“Sales continued to trend lower in June as some builders slow sales contracts to manage supply-chains, amidst longer delivery times and higher construction costs,” said NAHB Chairman Chuck Fowke. “While lumber prices have shown some improvement in spot markets, these declines take time to translate into lower construction costs. Moreover, other items like OSB remain elevated.”

“The June data came in lower than expected, and we anticipate an upward revision next month,” said NAHB Chief Economist Robert Dietz. “Nonetheless, sales have trended lower as construction costs have increased and

Inventory of homes available for sale, but not begun construction, was up 84%, a clear sign of supply-side limitations.

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builders have sought to manage material delays and cost challenges in the construction pipeline, in addition to dealing with shortages of lots and labor in many housing markets.”

A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed.

In addition to adjusting for seasonal effects, the June reading of 676,000 units is the number of homes that would sell if this pace continued for the next 12 months.

Inventory ticked up slightly, but remains low at a 6.3-month supply, with 353,000 new single-family homes for sale, 46.5% higher than June 2020. Inventory of homes available for sale, but not begun construction was up 84% year-over-year, a clear sign of supply-side limitations in the building market. In contrast, completed, ready-to-occupy inventory is down 44% year-over-year, to just 36,000 homes.

The median sales price was $361,800, up 6% from the $341,100 median sales price posted a year earlier.

Regionally, on a year-to-date basis, new home sales rose in all four regions, up 19.5% in the Northeast, 23.9% in the Midwest, 15.6% in the South and 4.1% in the West. These significant increases are due in part to lower sales volume during the Covid crisis a year ago. n

Remodeling industry confidence up from 2020

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he NAHB/Royal Building Products Remodeling Market Index (RMI) for the second quarter posted a reading of 87, up 14 points from the second quarter of 2020.

The finding is a signal of residential remodelers’ confidence in their markets, for projects of all sizes.

“Remodelers in many parts of the country are experiencing very strong demand for their

services,” said NAHB Remodelers Chair Steve Cunningham, CAPS, CGP, a remodeler from Williamsburg, Va. “So far, remodelers have been able to accommodate most customers, but as the backlog of projects in the pipeline grows, there is a tendency for them to take longer to start and complete.”

The NAHB/Royal Building Products RMI survey asks remodelers to rate five components

Housing starts increase in June, builder confidence down

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verall housing starts increased 6.3% in June to a seasonally adjusted annual rate of 1.64 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Despite the increase in housing production, there is concern over weakening permit numbers for both the single-family and multifamily markets.

The June reading of 1.64 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts increased 6.3% to a 1.16 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 6.2% to a 483,000 pace.

“While lumber prices have just recently begun to trend downward, builders continue to deal with rising prices of other building materials, such as oriented strand board, and major delays in the delivery of these goods,” said NAHB Chairman Chuck Fowke. “We are thankful that the White House recently held a meeting to seek solutions to these supply chain issues that are harming housing affordability.”

“The recent weakening of single-family and multifamily permits is due to higher material costs, which have pushed new home prices higher since the end of last year,” said NAHB Chief Economist Robert Dietz. “This is a troubling sign for future housing production. This is a challenge for a housing market that needs additional inventory.”

On a regional and year-to-date basis (January through June of 2021 compared to that same

time frame a year ago), combined single-family and multifamily starts are 41.4% higher in the Northeast, 25.5% higher in the Midwest, 21.5% higher in the South and 28.0% higher in the West.

Overall permits decreased 5.1 percent to a 1.60 million unit annualized rate in June. Single-family permits decreased 6.3% to a 1.06 million unit rate. Multifamily permits decreased 2.6% to a 535,000 pace.

Looking at regional permit data on a yearto-date basis, permits are 33.2% higher in the Northeast, 31.9% higher in the Midwest, 29.6% higher in the South and 32.2% higher in the West.

The count of single-family homes currently under construction is 675,000—up 32% compared to a year ago. The number of multifamily units under construction is up 2% to 684,000 apartments.

Builder confidence edges lower Strong buyer demand helped to offset supply-side challenges relating to building materials, regulation and labor as builder confidence in the market for newly built single-family homes inched down one point to 80 in July, according to the NAHB/Wells Fargo Housing Market Index (HMI) released recently.

“Builders continue to grapple with elevated building material prices and supply shortages, particularly the price of oriented strand board, which has skyrocketed more than 500 percent above its January 2020 level,” said Fowke.

“We are grateful that the White House heeded our urgent plea to hold a building materials

of the remodeling market as “good,” “fair” or “poor.” Each question is measured on a scale from 0 to 100, where an index number above 50 indicates that a higher share view conditions as good than poor.

The Current Conditions Index is an average of three of these components: (continued on page 13)

meeting with interested stakeholders on July 16 to seek solutions to end production bottlenecks that have harmed housing affordability.”

“Builders are contending with shortages of building materials, buildable lots and skilled labor as well as a challenging regulatory environment. This is putting upward pressure on home prices and sidelining many prospective home buyers even as demand remains strong in a low-inventory environment,” said Dietz.

Derived from a monthly survey that NAHB has been conducting for 35 years, the NAHB/ Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

The three major HMI indices were mixed in June. The HMI index gauging current sales conditions fell one point to 86, the component measuring traffic of prospective buyers dropped six points to 65 and the gauge charting sales expectations in the next six months posted a two-point gain to 81.

Looking at the three-month moving averages for regional HMI scores, the Northeast fell four points to 75, the Midwest moved one-point lower to 71 and the West posted a two-point decline to 87. The South held steady at 85.

Single-family home builders are invited to join the exclusive group of NAHB members who participate each month in the Housing Market Index survey. To begin receiving the monthly HMI surveys, please submit this form. n August, 2021

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Prospective buyers still becoming active buyers

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f the 17% of American adults considering a future home purchase in the second quarter of 2021, 61% have moved beyond planning and are already actively trying to find one to buy. This share of active buyers has increased for six straight quarters, a trend that began after the final quarter of 2019 when it stood at 43%. In the past year and a half, several factors have contributed to turning more prospective buyers into active ones: low mortgage rates, desire for more space, and desire for a new location in the suburbs/ exurbs.

The share of prospective buyers who are actively searching for a home has grown in every region of the US. From the final quarter of 2019 to the second quarter of 2021, the share went from 46% to 66% in the Northeast, 40% to 50% in the Midwest, 43% to 58% in the South, and 40% to 72% in the West. n As the share of prospective buyers actively searching for a home continues to increase, the length of time spent searching continues to grow. In the fourth quarter of 2019, 57% of buyers actively engaged in the purchase process had spent 3+ months looking. By the second quarter of 2021, that share was 66%. *All national and regional series in the HTR were seasonally adjusted for the first time in the second quarter of 2021. As a result, all data prior to this quarter have changed, as they now reflect the seasonal adjustments. Moving forward, non-seasonally adjusted data will no longer be published. **TheHousing Trends Report (HTR) is a research product created by the NAHB Economics team with the goal of measuring prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets.

The HTR is produced quarterly to track changes in buyers’ perceptions over time. All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult. Results are seasonally adjusted. A description of the poll’s methodology and sample characteristics can be found here This is the fifth in a series of six posts highlighting results for the second quarter of 2021.

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SHOWCASE HOUSE Fundraiser Program The HBAMT Showcase House program is an effort to generate funds to help fuel the association’s daily efforts to promote the home building industry and defend its builders against unjust legislative activity.

We currently have TWO projects underway: - The Showcase House at Nature’s Landing - The Showcase House at Hardeman Springs See the brochures below for a complete list of materials and labor needed for each project. Contact information for donating to each of the programs is listed below the brochure links.

SEE INSIDE FOR A COMPLETE LIST OF MATERIALS AND LABOR NEEDED FOR THE PROJECT. Visit https://hbamt.org/natures-landing/ for updated lists on needed materials/labor.

SEE INSIDE FOR A COMPLETE LIST OF MATERIALS AND LABOR NEEDED FOR THE PROJECT. Visit

For specific details regarding materials please contact Jimmy Franks: 615-794-7415 or franco314@aol.com; or Blake Parks: 615-243-6373 or blake@tennesseevalleyhomes.com

For specific details regarding materials please contact Steve Shalibo: 615-772-1019 or shalibo42@gmail.com

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https://hbamt.org/hardeman-springs/ for updated lists on needed materials/labor.

SPIKE REPORT Randall Smith 169 Jim McLean 164 David Hughes 163

Top 20 Big Spikes Jim Ford 912 Mitzi Spann 789 Bill King 776 Terry Cobb 570 Jim Fischer 567 John Whitaker 565 Trey Lewis 520 James Carbine 411 Jennifer Earnest 379 Jimmy Franks 363 David Crane 340 Kevin Hale 302 Reese Smith III 261 Steve Moody 221 Sonny Shackelford 219 Davis Lamb 218 Jackson Downey 182

Life Spikes Tonya Esquibel 152 Nick Wisniewski 151 Steve Cates 146 Harry Johnson 146 C.W. Bartlett 138 Steve Shalibo 131 Jordan Clark 125 B.J. Hanson 122 Carmen Ryan 121 Steve Hewlett 119 John Zelenak 118 Michael Dillon 116 Dave McGowan 114 Justin Hicks 113 Brandon Rickman 113 Edsel Charles 111 Wiggs Thompson 106 Duane Vanhook 103 Joe Morgan 95 Jeff Zeitlin 87 Keith Porterfield 82 Erin Richardson 77 Jody Derrick 75 Sam Henley 75 Beth Sturm 74 Lori Fisk-Conners 70 Ron Schroeder 69 Andrew Neuman 63

the current market for large remodeling projects, moderately-sized projects and small projects. The Future Indicators Index is an average of the other two components: the current rate at which leads and inquiries are coming in and the current backlog of remodeling projects. The overall RMI is calculated by averaging the Current Conditions Index and the Future Indicator Index. Any number over 50 indicates that more remodelers view remodeling market conditions as good than poor.

The Current Conditions Index averaged 91, a 14-point increase from the second quarter of 2020. All components also posted increases compared to the second quarter of last year: large remodeling projects ($50,000 or more) jumped 20 points to 90, moderately-sized remodeling projects (at least $20,000 but less than $50,000) increased 13 points to 91 and small remodeling projects (under $20,000) rose nine points to 92.

The Future Indicator Index averaged 83, up 13 points from second quarter of 2020. Both components increased as well: the current rate at which leads and inquiries are coming in rose nine points to 81 and the backlog of remodeling jobs jumped 19 points to 86.

“As the market attempts to balance the number of households that want homes and

the number of homes available, the value of homes is rising, helping to fuel demand for remodeling,” said NAHB Chief Economist Robert Dietz. “This has been sufficient to keep remodelers optimistic, despite the significant headwinds of labor and material shortages. And while there has been some easing of framing lumber prices, prices for other materials like OSB remain significantly high— OSB is up more than 500 percent since the start of 2020.”

The RMI was redesigned in 2020 to ease respondent burden and improve its ability to inter-

Twenty SPIKES (in bold) increased their recruitment numbers last month. What is a SPIKE? SPIKES recruit new members and help the association retain members. Here is the latest SPIKE report as of June 30th, 2021.

Christina James 59 Brian Sebring 56 John Broderick 55 Rick Olszewski 52 John Ganschow 51 Phillip Smith 47 Joe Dalton 45 Ricky Scott 45 Rachel Holloway 43 Frank Jones 43 Ryan Meade 40 Frank Tyree 33 Don Mahone 31 Jeffrey Caruth 26 Spikes Maverick Green 23 Jim Hysen 21 Perry Pratt 21 Margaret Tolbert 19 Tammy Chambers 16 Nicole Bird 15 Rob Pease 14 Eric DeBerry 12 John Nehrenz 12 MacKenzie Curtis 10 Will Montgomery 10 Chris Richey 10 Bob Bellenfant 8 Clint Mitchell 8 Lisa Underwood 8 Matt Dryden 7 McClain Franks 6

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pret and track industry trends. As a result, readings cannot be compared quarter to quarter until enough data are collected to seasonally adjust the series. To track quarterly trends, the redesigned RMI survey asks remodelers to compare market conditions to three months earlier, using a “better,” “about the same,” and “worse” scale.

In the second quarter, 30 percent of respondents indicated that the market is “better” and only 9 percent rated it “worse” than the first quarter of 2021.

For the full RMI tables, please visit nahb.org/ rmi. n

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AUGUST CALENDAR Sunday

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Saturday

Sales & Marketing Council Meeting

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Remodelers Council Meeting

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Sales & Marketing Council Meeting

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CHAPTERS & COUNCILS CHAPTERS

Robertson County RSVP line: 615-377-9651, ext. 313.

CHEATHAM COUNTY CHAPTER Chapter President - Roy Miles.

Cheatham County Chapter details are being planned.

Next meeting: to be announced.

Chapter RSVP Line: 615/377-9651, ext. 310

SUMNER COUNTY CHAPTER Chapter President - Joe Dalton.

The Sumner County Chapter meets on the fourth Tuesday of the month, 11:30 a.m. at the new Hendersonville Library.

Next meeting: to be announced.

Chapter RSVP Line: 615/377-9651, ext. 262

DICKSON COUNTY CHAPTER Chapter President - Mark Denney.

The Dickson County Chapter meets on the third Tuesday of the month, 12:00 p.m. at Colton’s Steakhouse in Dickson.

Next meeting: to be announced.

Topic: to be announced.

Price: FREE, lunch dutch treat.

Chapter RSVP Line: 615/377-9651, ext. 264 MAURY COUNTY CHAPTER Maury County Chapter details are currently being planned.

Next meeting: to be announced.

Chapter RSVP line: 615-377-9651, ext. 312; for callers outside the 615 area code, 1-800-571-9995, ext. 312 METRO/NASHVILLE CHAPTER Chapter President - Tonya Esquibel.

The Metro/Nashville Chapter meets on the fourth Monday of the month, 11:30 a.m. at the HBAMT offices.

Next meeting: to be announced.

Builders Free pending sponsorship.

Price: $10 per person with RSVP ($20 w/o RSVP).

Chapter RSVP Line: 615/377-9651, ext. 261 ROBERTSON COUNTY CHAPTER Next meeting: to be announced.

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WILLIAMSON COUNTY CHAPTER Chapter President - John Nehrenz.

The Williamson County Chapter meets on the third Tuesday of the month, 11:30 a.m. at the HBAMT offices.

Next meeting: to be announced.

Builders Free pending sponsorship.

Price: $10 per person with RSVP ($20 w/o RSVP).

Chapter RSVP Line: 615/377-9651, ext. 305 WILSON COUNTY CHAPTER Chapter President - Nick Wisniewski.

The Wilson County Chapter meets on the second Wednesday of the month, 11:30 a.m. at the Lebanon Wilson County Chamber of Commerce in Lebanon.

Next meeting: to be announced.

Topic: to be announced.

Chapter RSVP Line: 615/377-9651, ext. 309 COUNCILS GREEN BUILDING COUNCIL Council President - Erin Richardson.

The Green Building Council meets on the fourth Wednesday of the month, 11:00 a.m.

Next meeting: to be announced.

Price: free for Green Building Council members pending sponsorship; $20 for non-members with RSVP ($25 w/o).

Council RSVP Line: 615/377-9651, ext. 308 HBAMT REMODELERS COUNCIL Council President - Eli Routh.

The HBAMT Remodelers Council meets on the third Wednesday of the month at varying locations.

Next meeting: Wednesday, August 18th, 11:30 a.m. at the HBAMT. Topic: Special guest Kevin Hale, Hale Insurance.

Price: free with RSVP thanks to VaVia. Council RSVP Line: 615/377-9651, ext. 263 INFILL BUILDERS COUNCIL The Infill Builders Council typically meets on the third Thursday of the month, 11:30 a.m. at the HBAMT offices Next meeting: to be announced.

Price: to be announced.

RSVP to: 615/377-9651, ext. 265.

MIDDLE TENN SALES & MARKETING COUNCIL Council President - Jessica Neal.

The SMC typically meets on the first Thursday of the month, 9:00 a.m. at the HBAMT offices.

Next meeting: Thursday, August 5th.

Topic: “Managing Today’s Market,” a panel discussion with industry experts sharing their strategies for maximizing sales in today’s real estate market.

SMC Members FREE w/RSVP thanks to Lennar.

Non-SMC members: $15 with RSVP; $20 w/o RSVP RSVP REQUIRED - LIMITED SEATING RSVP to cnicley@hbamt.org Council RSVP Line: 615/377-9651, ext. 260.

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