The Nail, March 2022

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NAIL The official magazine of Home Builders Association of Middle Tennessee President Nick Wisniewski Vice President Brandon Rickman Secretary/Treasurer Jim Hysen 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 2022 Parade advertising and exhibiting opportunities The Pinnacle Financial Partners Parade of Homes returns this fall to Rosebrooke. Secure your planbook space today!

11 Building materials remain top challenge for builders

A recent NAHB survey shows material prices remaining at the top spot among problems builders are currently facing.

DEPARTMENTS 6 News & Information 13 SPIKE Club Report

Advertise in

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14 March Calendar 14 Chapters and Councils

NAIL Visit http://www.hbamt.org/nail.html and click The NAIL Advertising Rates (pdf) to download rates and registration form Email jargo@hbamt.org for more details

ON THE COVER: Building materials remain top challenge. More details on page eleven.

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NEWS&INFO

January new home sales lower but still solid

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ew home sales declined in January on rising interest rates but still posted a steady reading as demand remains

strong.

Sales of newly built, single-family homes in January fell 4.5% to an 801,000 seasonally adjusted annual rate from a sharp upwardly revised reading in December, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

“Demand is strong given a lack of existing home inventory,” said NAHB Chairman Jerry Konter. “Builders are grappling with supply-chain issues that are extending construction times and increasing costs. Policymakers need to focus on alleviating production bottlenecks, particularly as it relates to lumber and other building materials.”

“New home prices continue to rise as the cost of materials increases,” said NAHB

Policymakers need to focus on alleviating production bottlenecks, particularly as it relates to building materials.

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Chief Economist Robert Dietz. “Higher mortgage rates will slow home buying demand over the course of 2022 and the Russia-Ukraine crisis will add short-term volatility to the bond market.”

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 January reading of 801,000 units is the number of homes that would sell if this pace continued for the next 12 months.

New single-family home inventory was up 34.4% over last year, rising to a 6.1 months’ supply, with 406,000 available for sale. However, just 37,000 of those are completed and ready to occupy.

The median sales price rose to $423,300 in January from $395,500 in December, and is up more than 13% compared to a year ago, due primarily to higher development costs, including materials.

Regionally, on a year-to-date basis, new home sales fell in three regions, down 10.7% in the Northeast, 3.7% in the Midwest and 7.4% in the South. New home sales were up 1.2% in the West. n

Housing starts decrease, builder confidence edges down

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ith builders continuing to report supply chain problems that are causing construction delays, overall housing starts decreased 4.1% 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. However, in a sign of strong demand, building permits increased at a solid pace in January.

The January 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 decreased 5.6% to a 1.12 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, decreased 0.8% to an annualized 522,000 pace.

“The market needs more housing, but chronic production bottlenecks, including ongoing price increases for lumber and OSB, continue to raise housing costs and harm housing affordability,” said NAHB Chairman Jerry Konter. “In fact, the number of single-family homes under construction continues to rise as construction cycle times increase due to delivery delays with building materials.”

“While single-family starts dropped in January, the rise in permits, along with solid builder sentiment as measured in recent monthly surveys, suggest a positive start to the year given the recent rise in mortgage rates,” said NAHB Chief Economist Robert Dietz. “The average 30-year mortgage rate increased from 3.1% to a 3.45% from December to January. Fueled by higher mortgage rates and construction costs, declining

housing affordability will continue to affect the home building market in 2022.”

On a regional basis compared to the previous month, combined single-family and multifamily starts are 2.6% higher in the Northeast, 37.7% lower in the Midwest, 2.0% lower in the South and 17.7% higher in the West.

Overall permits increased 0.7% to a 1.90 million unit annualized rate in January. Single-family permits increased 6.8% to a 1.21 million unit rate. Multifamily permits decreased 8.3% to an annualized 694,000 pace.

Looking at regional permit data compared to the previous month, permits are 48.3% lower in the Northeast, 0.7% lower in the Midwest, 11.4% higher in the South and 13.9% higher in the West.

There are now 785,000 single-family homes under construction, a 26.8% year-over-year gain.

There are 758,000 multifamily units under construction — a 14% gain..

Builder confidence slips one point Despite strong buyer demand, builder sentiment continued to slip in February as the industry grapples with ongoing building material production bottlenecks that are raising construction costs and delaying projects.

Builder confidence in the market for newly built single-family homes moved one point lower to 82 in February, marking the second straight month that confidence levels have declined by a single point, according to the NAHB/Wells Fargo Housing Market Index (HMI) released recently. Despite these monthly declines, the HMI has posted very solid readings at or above the 80-point mark for the past five months.

Robust turnout for 2022 IBS

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ore than 45,000 home building professionals filled the exhibit halls of the Orange County Convention Center in Orlando as the NAHB hosted the International Builders’ Show® (IBS) Feb. 8-10th.

Kitchen & Bath Industry Show (KBIS) once again combined for the annual Design & Construction Week® (DCW), which drew more than 70,000 attendees.

“The attendance at this year’s show exceeded our expectations and reflects the enthusiasm of the home building industry to collaborate

and discover the latest products and technology solutions for their customers,” said Geoff Cassidy, NAHB senior vice president of exhibitions and meetings.

Exhibit space for IBS totaled 425,000 net square feet, where more than 800 exhibitors displayed the latest in building products and technology. In all, DCW featured nearly 1,200 exhibitors occupying approximately 725,000 square feet of indoor and outdoor exhibits.

Many exhibitors also noted the strong foot traffic of attendees.

“Production disruptions are so severe that many builders are waiting months to receive cabinets, garage doors, countertops and appliances,” said Konter. “These delivery delays are raising construction costs and pricing prospective buyers out of the market. Policymakers must make it a priority to address supply chain issues that are harming housing affordability.”

“Residential construction costs are up 21% on a year over year basis, and these higher development costs have hit first-time buyers particularly hard,” said Dietz. “Higher interest rates in 2022 will further reduce housing affordability even as demand remains solid due to a lack of resale inventory.”

Derived from a monthly survey that NAHB has been conducting for more than 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 HMI index gauging current sales conditions increased one point to 90, the gauge measuring sales expectations in the next six months fell two points to 80, and the component charting traffic of prospective buyers posted a fourpoint decline to 65.

Looking at the three-month moving averages for regional HMI scores, the Northeast increased three points to 76, the West rose one point to 89, the Midwest fell one point to 73 and the South edged one point lower to 86. n

“We’re really pleased with the turnout.

We’re excited to have in-person meetings with our clients and be able to walk them around and show them our products,” said Nicole LeBlanc, shopper marketing manager for Builder Channel at Whirlpool Corporation.

In addition to meeting suppliers and seeing product demos throughout the three-day show, attendees networked with peers and attended any of more than 110 education sessions led by experts on a wide range of industry topics.

Next year, Design & Construction Week will return to Las Vegas Jan. 31-Feb. 2nd. n March 2022

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Pinnacle Financial Partners Parade of Homes The 2022 Parade of Homes at Rosebrooke

ADVERTISE & EXHIBIT

If your company depends on new homes or

related products, furnishings or services, here’s one opportunity you can’t pass up -- the 2022 Pinnacle Financial Partners Parade of Homes at Rosebrooke! Secure your space in the Plan Book or reserve an Exhibit Booth today.

THE PARADE PLAN BOOK

THE PARADE EXHIBIT BOOTH

At every Parade event each attendee is handed a magazine as they walk through the front gate - the Parade Plan Book.

Here’s your chance to demonstrate your product or service to the thousands of qualified prospects who pass through the Parade of Homes exhibit center when they enter and leave the show. As with Plan Book advertising, the exhib­it center produces virtually all pre-qualified customers!

The Plan Book is a tremen­dous opportunity to put your message into the hands of pre-qualified customers who refer to the book several months after the Parade of Homes is over!

Plan Book Advertising Rates Half Page 7.5” x4.75” (Horizontal) Full Page 7.5”x10” 8.75”x 11.25” (B1eed) *Page One 7.5”x10” 8.75”x11.25” (Bleed) Inside Front Cover Inside Back Cover Double Truck Back Cover

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*SPECIALTY LOCATIONS SOLD. Email jargo@hbamt.org for ad specs and availability.

It’s like opening up shop and having thousands of prospects visit your show­room the first two weeks you’re in business. What other medium could come close to producing those kinds of results? The Parade ranks first of all home shows in the nation and you can take advantage of the prestige this show enjoys.

Exhibit Booth Price? $750 Each booth in the Parade of Homes exhibit center measures 10’ x 6’ at the front entrance where patrons must enter and exit -- perfect for eye-pop­ping kiosks and marketing publications!

2022 PARADE OF HOMES - PROMOTIONAL OPPORTUNITIES COMMITMENT FORM Return completed form to: HBAMT, 9007 Overlook Blvd., Brentwood, TN 37027 | Email: jargo@hbamt.org

PLAN BOOK AD - please check the size of ad you would like to secure in the 2022 Plan Book:

r Half Page

r Full Page

r Page One

r Inside Front

r Inside Back

r Back Cover

r 2-Page Spread

EXHIBIT BOOTH SPACE - please check here to secure your 2022 Exhibit Booth Space: r Your name: ____________________________________ Company: _____________________________________ Cell: _________________________________________ Email: _________________________________________ Total amount being paid: $___________ Credit Card _______________________ Credit Card # _______________________________ Exp. ____________ Credit Card V-Code _______________

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The “v-code” is found on the back of the card, usually printed or embossed atop or near the signature strip.

It is comprised of three digits found to the right of a longer number.

Signature ______________________________________________________________________________ March 2022

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Building materials top challenge for builders

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rices for building materials were a significant issue for 96% of builders in 2021, and 91% of the builders expect it to continue being a problem in 2022, according to the NAHB/Wells Fargo Housing Market Index.

Much like last year, the price and availability of building materials topped the list of problems builders face. According to special questions on the December 2021 survey for the NAHB/Wells Fargo Housing Market Index, building material prices were a significant issue for 96% of builders in 2021, and 91% of the builders expect it to continue being a problem in 2022. The second most widespread problem in 2021 was availability/time it takes to obtain building materials cited by 91% of builders. In 2022, the share of builders expecting availability/time it takes to obtain building materials is expected to be 90%. The high incidence of builders reporting building material problems is not surprising given recent increases in material prices.

Meanwhile the cost and availability of labor was reported as a significant problem by only 13% of builders in 2011. The share increased to 30% in 2012, 53% in 2013, 61% in 2014, 71% in 2015, 78% in 2016, 82% in both 2017 and 2018, 87% in 2019 and 65% in 2020. While 82% said it was problem in 2021, 85% expect it to continue being a problem in 2022. Again, this result is not surprising given the large number of unfilled job openings in the construction industry.

Compared to 2021 builders expect some of the problems to become worse in 2022. Rising inflation in US economy was significant problem for builders in 2021 and 2022. While the share was 63% in 2021, it is expected to increase significantly to 90% in 2022. Federal environmental regulations and policies was a significant problem for 37% of builders in 2021, compared to 52% who expected it to be an issue in 2022.

Gridlock/uncertainty in Washington making buyers cautious was a significant problem for 32% of builders in 2021, but 50% expect it to be a problem in 2022. Concern about employment/ economic situation was a problem for 24% of builders in 2021, but 46% expect it to be a problem in 2022. While Taxes on home builders was a problem for 23% of builders in 2021, it will be significant problem in 2022 for 43% of builders. High interest rates was a problem for only 2% of builders in 2021, but 31% of builders expect it to be a significant problem in 2022. Attempts to limit mortgage interest deduction/other was a problem for 12% of builders in 2021, but 30% expect it to be a problem in 2022. n March 2022

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SPIKE REPORT David Hughes 175 Randall Smith 172 Nick Wisniewski 168 Jim McLean 165

Fifteen 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 December 31st, 2021.

Top 20 Big Spikes Jim Ford 912 Mitzi Spann 792 Bill King 776 Terry Cobb 570 Jim Fischer 567 Trey Lewis 527 James Carbine 427 Jimmy Franks 384 Jennifer Earnest 380 David Crane 343 Kevin Hale 302 Reese Smith III 261 Davis Lamb 224 Steve Moody 221 Sonny Shackelford 219 Jackson Downey 182

Life Spikes Steve Shalibo 163 Tonya Esquibel 153 Steve Cates 146 Harry Johnson 146 Brandon Rickman 141 C.W. Bartlett 138 Jordan Clark 129 B.J. Hanson 122 Michael Dillon 121 Carmen Ryan 121 Steve Hewlett 119 John Zelenak 118 Justin Hicks 116 Dave McGowan 116 Edsel Charles 111 Wiggs Thompson 108 Duane Vanhook 107 Joe Morgan 96 Jeff Zeitlin 87 Keith Porterfield 84 Sam Henley 79 Jody Derrick 78 Erin Richardson 77 Beth Sturm 74 Ron Schroeder 72 Nelson Bordeau 71 Lori Fisk-Conners 70

Christina James 66 Andrew Neuman 65 Joe Dalton 58 Brian Sebring 56 John Broderick 55 Rick Olszewski 54 John Ganschow 51 Rachel Holloway 49 Ryan Meade 49 Phillip Smith 47 Frank Jones 46 Ricky Scott 45 Frank Tyree 33 Don Mahone 31 Jeffrey Caruth 28 Jim Hysen 28 Maverick Green 25 Spikes Perry Pratt 23 Margaret Tolbert 21 Tammy Chambers 17 Nicole Bird 15 Rob Pease 15 John Nehrenz 14 Lisa Underwood 14 Will Montgomery 10 Chris Richey 10 George Simpson 10 Eli Routh 9 Bob Bellenfant 8 Clint Mitchell 8 Matt Dryden 7

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MARCH CALENDAR Sunday

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Saturday

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Sales & Marketing Council meeting

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Wilson County Chapter meeting

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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 Colton’s Steakhouse in Dickson.

Next meeting: to be announced.

Price: FREE, lunch dutch treat.

Chapter RSVP Line: 615/377-9651, ext. 264 MAURY COUNTY CHAPTER Chapter President - Kelly Beasley.

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 third Tuesday of the month, 11:30 a.m. at the HBAMT offices.

Next meeting: to be announced.

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 ROBERTSON COUNTY CHAPTER

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Next meeting: to be announced.

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

SUMNER COUNTY CHAPTER Chapter President - Joe Dalton: 615/972-7149 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 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 - Margaret Tolbert 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: Thursday, February 17, 9:00 a.m.

Topic: to be announced.

Free with RSVP - coffee and donuts courtesy of Tolbert Marketing and Events.

Chapter RSVP Line: 615/377-9651, ext. 309 COUNCILS HBAMT REMODELERS COUNCIL Council President - Eli Routh.

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

Next meeting: to be announced. 11 a.m. to 12:30 p.m. at a location to be determined.

Topic: to be announced.

Price: free with RSVP. 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 - Lisa Underwood.

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

Next meeting: Thursday, March 3, 9:00 a.m. at the HBAMT. Topic: “Expert Panel of the Local Markets Top Builders.”

SMC members free thanks to Landmark Homes; non-SMC members $25 w/RSVP, $35 w/o RSVP Council RSVP Line: 615/377-9651, ext. 260.

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