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NAIL The official magazine of Home Builders Association of Middle Tennessee President Keith Porterfield Vice President Justin Hicks Secretary/Treasurer David Hughes Executive Vice President John Sheley Editor and Designer Jim Argo Staff Connie Nicley Charlotte Fischer 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 11 Rising incomes boost housing affordability
Strong wage growth boosts housing affordability in first quarter.
12 RMC hosts Afternoon Luau Mixer
The Remodeler’s Council’s Afternoon Luau was a big hit last month at the Ferguson showroom in Nashville.
15 2018 HBAMT Golf Event, sign up to play or sponsor today! The annual HBAMT golf event is set for this August. Sign up now to participate in the big event as either a player or sponsor!
DEPARTMENTS 8 News & Information 17 SPIKE Club Report 18 June Calendar 18 Chapters and Councils
ON THE COVER: Housing affordability gets a boost from rising wages. See story page eleven. June, 2018
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Production drops but remains near post-recession high
otal housing production fell 3.7 percent in April to a seasonally adjusted annual rate of 1.29 million units after an upwardly revised March reading of 1.34 million, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department. The March report marked an 11-year high for housing production. The April reading of 1.29 million units is the number of housing units builders would begin if they kept this pace for the next 12 months. The drop in overall production can be attributable to a decline in the multifamily sector — which includes apartment buildings and condos — after a big uptick in March. Multifamily starts fell 11.3 percent in April to a seasonally adjusted annual rate of 393,000 units. Meanwhile, single-family starts remained essentially flat, inching up 0.1 percent to 894,000 units after an upwardly revised March reading. “We expected some pullback this month after such a strong March report, but housing starts remain at very healthy levels in April,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “With homeownership rates on the rise, demand for single-family homes should continue to spur production in the months ahead.”
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“Single-family starts are up 8.3 percent for the first four months of the year relative to the start of 2017, which is higher than our forecast and bodes well for the rest of the year,” said NAHB Chief Economist Robert Dietz. “However, builders must manage supply-side hurdles, such as ongoing building material price increases and shortages of land and labor, to meet growing housing demand. Lumber prices continue to rise, with recent increases adding more than $7,000 to the price of an average single-family home.” Regionally in April, combined single- and multifamily housing production increased 6.4 percent in the South. Starts fell 8.1 percent in the Northeast, 12 percent in the West and 16.3 percent in the Midwest. Overall permits — which are a sign of future housing production activity — inched down 1.8 percent in April to a seasonally adjusted annual rate of 1.35 million units after a post-recession high in March. Single-family permits ticked up 0.9 percent to 859,000 while multifamily permits fell 6.3 percent to 493,000 after a 20.4 percent jump in March. Permits rose 12 percent in the South. They fell 4.4 percent in the Midwest, 13.2 percent in the West and 31.9 percent in the Northeast. n
Builder confidence climbs to 70 in May
uilder confidence in the market for newly-built single-family homes rose two points to a level of 70 in May after a downwardly revised April reading on the National Association of Home Builders/ Wells Fargo Housing Market Index (HMI). This is the fourth time the HMI has reached 70 or higher this year. “The solid May report shows that builders are buoyed by growing consumer demand for single-family homes,” said NAHB Chairman Randy Noel. “However, the record-high cost of lumber is hurting builders’ bottom lines and making it more difficult to produce competitively priced houses for newcomers to the market.” “Tight housing inventory, employment gains and demographic tailwinds should continue to boost demand for newly-built single-family homes,” said NAHB Chief Economist Robert Dietz. “With these fundamentals in place, the housing market should
improve at a steady, gradual pace in the months ahead.” Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index 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 HMI chart gauging current sales conditions increased two points to 76 in May while the indexes measuring buyer traffic and expectations in the next six months remained unchanged at 51 and 77, respectively.
Looking at the three-month moving averages for regional HMI scores, the West and Northeast held steady at 76 and 55, respectively. Meanwhile, the South and Midwest each edged down one point to respective levels of 72 and 65. n
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Rising incomes boost housing affordability First quarter housing affordability benefits from rising wages.
trong wage growth more than offset an increase in mortgage interest rates to boost nationwide housing affordability in the first quarter of 2018, according to the NAHB/Wells Fargo Housing Opportunity Index (HOI) released recently. In all, 61.6% of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $71,900. This is up from the 59.6% in the fourth quarter of 2017. “Continued job growth, rising wages and strong consumer confidence are fueling housing demand. In turn, this should lead to more buyers entering the housing market in the coming months,” said NAHB chairman Randy Noel. “However, builders continue to face chronic labor and lot shortages, rising prices for building materials and excessive regulations.” “At the national level, median family income rose an impressive 5.7% to $71,900 in 2018 from $68,000 last year, and this wage growth helped to boost housing affordability,” said NAHB chief economist Robert Dietz. “A growing economy, along with tight inventories and increasing household formations, will
lift housing production in the year ahead. But we also expect mortgage rates to continue to rise, and this will place downward pressure on affordability.” Average mortgage rates jumped by nearly 30 basis points to 4.34% from 4.06% in the fourth quarter of 2017. Of the 237 metropolitan areas recorded in the first quarter HOI, 167 markets registered a gain in affordability from the fourth quarter of 2017, 68 posted a loss and two were unchanged. Youngstown-Warren-Boardman, OhioPa., was the nation’s most affordable major housing market. There, 90.9% of all new and existing homes sold were affordable to families earning the area’s median income of $60,100. Meanwhile, Cumberland, Md.-W. Va., was rated the nation’s most affordable smaller market, with 98.5% of homes sold in the first quarter being affordable to families earning the median income of $55,500. Rounding out the top five affordable major housing markets in respective order were Indianapolis-Carmel-Anderson, Ind.; Scranton-Wilkes Barre-Hazleton, Pa.; Toledo, Ohio; and Harrisburg-Carlisle, Pa. Smaller markets joining Cumberland at
the top of the list included Springfield, Ohio; Elmira, N.Y.; Wheeling, W.Va.-Ohio; and Fairbanks, Alaska, which also posted a fifth place tie with Binghamton, N.Y. San Francisco, for the second straight quarter, was the nation’s least affordable major market. There, just 9.2% of the homes sold in the first quarter were affordable to families earning the area’s median income of $119,600. Other major metros at the bottom of the affordability chart were also in California. In descending order, they included Los Angeles-Long Beach-Glendale, Anaheim-Santa Ana-Irvine, San Jose-Sunnyvale-Santa Clara, and San Diego-Carlsbad. All five least affordable small housing markets were also in the Golden State. At the very bottom of the affordability chart was Salinas, where 10.7% of all new and existing homes sold were affordable to families earning the area’s median income of $69,100. In descending order, other small markets at the lowest end of the scale were Santa Cruz-Watsonville, San Luis Obispo-Paso Robles-Arroyo Grande, Napa, and San Rafael. See nahb.org/hoi for tables, historic data and details. n June, 2018
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RMC hosts Afternoon Luau Mixer
Luau themed mixer at The Ferguson showroom a big hit! Aloha was the word from the RMC hosted â€œLuau,â€? an Afternoon Mixer sponsored by Ferguson Bath, Kitchen & Lighting Gallery and held at their Nashville showroom! A big thanks to Ferguson for the great food and their sponsorship of the fun-filled event! n
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Please return your completed registration form (provided below) to the HBAMT to enter. ALL COMPANIES & SINGLE PLAYERS ENTERING MUST BE A MEMBER OF THE HBAMT.
CONTACT ________________________________ COMPANY _____________________________________ EMAIL ___________________________________ PHONE ________________________________________ Print names of players. Four (4) players per team ($210.00 per player). Players reserving for ONE only ($225.00) will be assigned a foursome. 1.) _________________________________________ 2.) _____________________________________________ 3.) _________________________________________ 4.) _____________________________________________ Check your preference (to accommodate all golfers we are hosting two rounds): r Morning Round | r Afternoon Round _______ No. of players x $210.00 or One (1) player for $225.00 | Make checks payable to HBAMT; call 377-1055 to pay by cc Return: HBAMT - 9007 Overlook Blvd, Brentwood, TN 37027 | Fax: 615-377-1077 | Email: email@example.com
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Eighteen 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 April 30, 2018. Top 20 Big Spikes Mitzi Spann Terry Cobb Jim Fischer John Whitaker Trey Lewis James Carbine Jennifer Earnest David Crane Kevin Hale Reese Smith III James Franks Steve Moody Davis Lamb Jackson Downey
762 570 566 548 401 386 363 306 299 261 243 219 203 182
Tim Ferguson Jim McLean Louise Stark Harry Johnson Steve Cates C.W. Bartlett
177 164 163 146 142 138
Life Spikes Sam Carbine Tonya Esquibel B.J. Hanson Steve Hewlett Jordan Clark Carmen Ryan Randall Smith Dave McGowan John Zelenak Wiggs Thompson Duane Vanhook Michael Dillon Helmut Mundt Christina Cunningham David Hughes Erin Richardson Lori Fisk-Conners Justin Hicks Beth Sturm Don Bruce Marty Maitland Keith Porterfield John Broderick
135 134 119 119 116 115 108 107 102 99 98 93 93 79 79 77 68 68 63 62 59 55 54
Joe Morgan Ron Schroeder Andrew Neuman John Ganschow Derenda Sircy Bryan Edwards Jody Derrick Ricky Scott Ashley Crews Phillip Smith Rick Olszewski Don Mahone Steve Shalibo Frank Tyree
54 53 50 49 49 44 42 41 40 38 30 28 28 28
Spikes Jay Elisar Frank Jones John Burns Kenny Burd Perry Pratt Will Montgomery Rob Pease Bob Bellenfant Stacy DeSoto Kim Carman McClain Franks Jim McCann
19 17 16 10 10 10 10 8 7 6 6 6
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JUNE Calendar Sunday
Sales & Marketing Council meeting
Dickson County Chapter meeting
Remodelers Council meeting
Metro/Nashville Chapter meeting
Chapters & Councils CHAPTERS CHEATHAM COUNTY CHAPTER Chapter President - Roy Miles: 615/646-3303 Cheatham County Chapter details are being planned. Next meeting: to be announced. Chapter RSVP Line: 615/377-9651, ext. 310 DICKSON COUNTY CHAPTER Chapter President - Mark Denney: 615/446-2873. The Dickson County Chapter meets on the third Monday of the month, 12:00 p.m. at the Ponderosa Restaurant in Dickson. Next meeting: Monday, June 18. 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 - John Whitaker: 615/843-3300. The Metro/Nashville Chapter meets on the fourth Monday of the month, 11:30 a.m. at the HBAMT offices. Next meeting: Monday, June 25. Topic: 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
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ROBERTSON COUNTY CHAPTER Next meeting: to be announced. Robertson County RSVP line: 615-377-9651, ext. 313.
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
SUMNER COUNTY CHAPTER 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
HBAMT REMODELERS COUNCIL Council President - Ricky Scott. The HBAMT Remodelers Council meets on the third Wednesday of the month at varying locations. Next meeting: Wednesday, June 20. Location: to be announced. Topic: to be announced. Price: free for RMC members with RSVP pending sponsorship; $15 for non-members with RSVP ($20 w/o). Council RSVP Line: 615/377-9651, ext. 263
WILLIAMSON COUNTY CHAPTER Chapter President - B.J. Hanson: 615/884-4935. 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 The Wilson County Chapter meets on the second Thursday of the month, 11:30 a.m. at the Five Oaks Golf & Country Club in Lebanon. Next meeting: to be announced. Chapter RSVP Line: 615/377-9651, ext. 309 COUNCILS GREEN BUILDING COUNCIL Council President - Erin Richardson: 615/883-8526. The Green Building Council meets on the fourth Wednesday of the month, 11:00 a.m. Next meeting: to be announced. Topic: to be announced.
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 - Ashley Crews. The SMC typically meets on the first Thursday of the month, 9:00 a.m. at the HBAMT offices. Next meeting: Thursday, June 7, 9:00 a.m. at the HBAMT. Topic: “How to Make Your Listings Shine,” with Stacy Dudley, Real Tracs, Inc. Don’t miss the final installment of this year’s “Marketing Yourself and Your Business” series! SMC members free thanks to the Meyers Group; non-SMC members $25 w/RSVP, $35 w/o RSVP Council RSVP Line: 615/377-9651, ext. 260.
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The June 2018 issue of The Nail, the official monthly publication of the Home Builders Association of Middle Tennessee.