The Nail, May 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 Spring Fling & Builders Show!

Sign up now to take part in the next Builders Show May 11 at the HBAMT. Exhibit booths and sponsorships still available.

11 Lumber prices add significantly to the price of new homes

Lumber prices have tripled over the past 12 months causing the price of an average new home to increase by nearly $36,000 according to an NAHB survey.

12 Contributions needed for the Showcase House program

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

Advertise in

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NAIL Email jargo@hbamt.org for more details!

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

ON THE COVER: New home sales and housing production see solid gains in recent months despite ongoing materials challenges. See page six and seven for more details.

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NEWS&INFO

New home sales jump in March on high consumer demand

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ow interest rates and strong consumer demand fueled a solid increase in new home sales in March, despite the ongoing building materials challenges impacting the industry. Sales of newly built, single-family homes rose 20.7% from an upwardly revised February number, to a 1.02 million 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. This is the highest sales pace since September 2006.

“Our members are seeing strong buyer traffic as continued low mortgage rates are helping fuel sales,” said NAHB Chairman Chuck Fowke. “However, builders still grappling with major supply chain issues and soaring materials costs, which are causing construction delays and preventing them from adding to the already very low inventory.”

“Despite the increase in sales, housing affordability remains a major concern,” said

Our members are seeing strong buyer traffic as continued low mortgage rates are helping fuel sales.

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NAHB Assistant Vice President of Forecasting Danushka Nanayakkara-Skillington. “With building material pricing, the challenge for builders in 2021 will be to deal with higher input costs while making sure home prices remain within reach for American home buyers.”

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 March reading of 1.02 million units is the number of homes that would sell if this pace continued for the next 12 months.

Inventory fell to a 3.6-months’ supply, with 307,000 new single-family homes for sale, 44.6% lower than March 2020.

Homes sold that have not started construction are up 150% over last year, an indicator of increasing delays and higher costs associated with construction.

The median sales price was $330,800, up from the $328,200 median sales price posted a year earlier.

Regionally on a year-to-date basis new home sales declined 3.3% in the West, and rose in the other three regions, up 36.6% in the Northeast, 53.9% in the Midwest and 50.5% in the South. n

Housing production rebounds, builder confidence up in April

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ousing production rebounded in March as buyer demand remains solid due to low mortgage interest rates. Overall housing starts increased 19.4% to a seasonally adjusted annual rate of 1.74 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This was the fastest pace for combined single-family and multifamily construction since June 2006.

The March reading of 1.74 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 15.3% to a 1.24 million seasonally adjusted annual rate.

When comparing the first quarter of 2021 to the first quarter of 2020, single-family starts are up 19.6%. The multifamily sector, which includes apartment buildings and condos, increased 30.8% to a 501,000 pace.

“Builder confidence remains strong, pointing to gains for single-family construction in 2021,” said NAHB Chairman Chuck Fowke.

“However, rising costs for most kinds of building materials continue to impede positive additional momentum in the market.”

“Demand remains solid due to low mortgage interest rates and a thin level of inventory in the resale market, which is spurring the need for additional supply,” said NAHB Chief Economist Robert Dietz. “The test for the industry this year will be balancing growth and higher construction costs, given ongoing housing affordability challenges.”

On a regional basis compared to the previous month, combined single-family and multifamily starts are 64% higher in the Northeast, 122.8% higher in the Midwest, 13.5% higher in the South and 13.6% lower in the West. The gain in the Midwest is likely weather-related.

Overall permits increased 2.7% to a 1.77 million unit annualized rate in March. Single-family permits increased 4.6% to a 1.2 million unit rate. Multifamily permits decreased 1.2% to a 567,000 pace.

Looking at regional permit data compared to the previous month, permits are 8% lower in the Northeast, 2% higher in the Midwest and 6.4% in the South. Permits held steady in the West.

Builder confidence up in April Strong buyer demand pushed builder confidence up in April even as builders continued to grapple with rising lumber prices and supply chain issues and consumers faced higher home prices due to a lack inventory. The latest NAHB/Wells Fargo Housing Market Index (HMI) shows that builder confidence in the market for newly built single-family homes rose one point to 83 in April.

“Despite strong buyer traffic, builders continue to face challenges to add much needed housing supply to the market,” said Fowke.

“The supply chain for residential construction is tight, particularly regarding the cost and availability of lumber, appliances, and other building materials. Though builders are seeking to keep home prices affordable in

COVID-19 continues to fuel desire for homeownership

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nterest in homeownership among prospective buyers continues to grow in the wake of the COVID-19 pandemic, with 16% of American adults looking to purchase a home in the next 12 months — up from 10% year over year — according to NAHB’s Housing Trends Report for the first quarter of 2021. This is the third — and largest — year over year increase in the series’ history.

This growth is driven primarily by millennials, whose interest doubled from 16% in the first quarter of 2020 to 32% in the first quarter of 2021. Other generations saw more modest increases of one to three percentage points.

Regionally, interest in the Northeast more than doubled year over year, from 8% to 20%, followed by increased interest in the West (up eight percentage points to 19%), South (up five

a market in need of more inventory, policymakers must find ways to increase the supply of building materials as the economy runs hot in 2021.”

“While mortgage interest rates have trended higher since February and home prices continue to outstrip inflation, housing demand appears to be unwavering for now as buyer traffic reached its highest level since November,” said Dietz. “NAHB’s forecast is for ongoing growth in single-family construction in 2021, albeit at a lower growth rate than realized in 2020.”

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 HMI index gauging current sales conditions increased one point to 88 and the gauge charting traffic of prospective buyers posted a three-point gain to 75. The component measuring sales expectations in the next six months fell two points to 81.

Looking at the three-month moving averages for regional HMI scores, the Northeast rose six points 86 and the South moved up one point to 83. The West held steady at 90 and the Midwest fell two points to 78.

HMI tables can be found at nahb.org/hmi.

More information on housing statistics is also available at housingeconomics.com. n

percentage points to 16%) and Midwest (up three percentage points to 11%).

Rose Quint, assistant vice president of survey research, provides more analysis — including details on interest among first-time home buyers — in this Eye on Housing post. n

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Builders SHOW Exhibit Tent 13 14

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The Builders Show exhibit tent will be located on the south

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Red booths are SOLD and not available.

side of the HBAMT building and measure 100 x 50 feet boasting space for forty-five (45) 10 x 5 feet exhibit spaces.

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DON’T MISS OUT ON THIS TERRIFIC OPPORTUNITY! 9

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Return your registration form to the HBAMT today to reserve your space or sponsorship!

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Exhibit Space

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2021 SPRING BUILDERS SHOW EXHIBITORS/SPONSORS REGISTRATION FORM

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Return to: 615-377-1077 (fax) | cnicley@hbamt.org (email)

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I am registering as an: r EXHIBITOR - $595 per booth r SPONSOR - $550 - 120 feet -

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EXHIBITORS are provided exhibit space inside the exhibit tent.

SPONSORS enjoy all the benefits of an exhibitor, including access to the tent, without being provided exhibit space in the tent.

Your name: ______________________________________

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Company: _______________________________________

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Cell: __________________ Email: ____________________

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EXHIBITORS: Top 3 booth location preferences (not guaranteed):

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________

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Number of booths you’re purchasing (no more than two):

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_______ x $595 = your total payment: $____________ SPONSORS: will be charged $550.

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R DE IL R! BU BA

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ENTRANCE

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- 40 feet -

= SOLD

Return your registration form to the HBAMT today!

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= 10’x5’

Tuesday, May 11

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Exhibit spaces are limited to two per company.

Credit Card ______________________________________ Credit Card # ______________________ Exp. __________ Credit Card V-Code _______________

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.

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Home prices rise with lumber price hike

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oaring lumber prices that have tripled over the past 12 months has caused the price of an average new single-family home to increase by $35,872, according to new analysis by the NAHB Economics team. This lumber price hike has also added nearly $13,000 to the market value of an average new multifamily home, which translates into households paying $119 a month more to rent a new apartment. Further adding to affordability woes, building material prices have by and large been steadily rising since 2020 and were up across the board in March.

The latest Random Lengths prices as of the week ending on April 23 show the price of framing lumber near $1,200 per thousand board feet — up nearly 250% since last April when the price was roughly $350 per thousand board feet.

NAHB calculated these average home price increases based on the softwood lumber that goes into the average new home, as captured in the Builder Practices Survey conducted by Home Innovation Research Labs.

Included is any softwood used in structural framing (including beams, joists, headers, rafters and trusses), sheathing, flooring and underlayment, interior wall and ceiling finish-

ing, cabinets, doors, windows, roofing, siding, soffit and fascia, and exterior features such as garages, porches, decks, railing, fences and landscape walls.

Why Lumber Prices Have Surged These unprecedented lumber price hikes are attributable to the following factors: l Many mills reduced production last spring due to stay-at-home orders and social distancing measures enacted by state and local governments at the onset of the coronavirus pandemic. l When it became clear in the ensuing months that housing weathered the storm much better than predicted and demand remained strong, lumber mills did not ramp up production accordingly. l Moreover, producers did not anticipate the massive uptick in demand from do-ityourselfers and big box retailers during the pandemic. l Finally, the extreme lumber price volatility has been exacerbated by tariffs on Canadian lumber imports into the U.S. market.

NAHB Actions As lumber prices remain stubbornly high, NAHB continues to work relentlessly with the White House, Congress and lumber producers to increase production and bring prices lower.

This is the top priority for the association.

Since President Biden was sworn into office in January and the new 117th Congress was seated, NAHB has taken the following actions: l NAHB Chairman Chuck Fowke and First Vice Chairman Jerry Konter held in-person and virtual meetings with congressional leaders earlier this month to urge them to address rising lumber prices and to take steps to ensure an adequate supply of lumber and other building materials to stem rising housing costs. l In an effort led by NAHB, more than 35 organizations recently sent a joint letter to Commerce Secretary Gina Raimondo calling on her to “examine the lumber supply chain, identify the causes for high prices and supply constraints, and seek immediate remedies that will increase production.” l NAHB has also sent letters to President Biden, Agriculture Secretary Tom Vilsack, U.S. Forest Service (continued on page 13) May, 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 Jackson Downey Jim McLean Randall Smith

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 March 31, 2021.

Top 20 Big Spikes Jim Ford 912 Virgil Ray 821 Mitzi Spann 789 Bill King 776 Terry Cobb 570 Jim Fischer 567 John Whitaker 565 Trey Lewis 513 James Carbine 410 Jennifer Earnest 378 Jimmy Franks 345 David Crane 339 Kevin Hale 302 Reese Smith III 261 Steve Moody 221 Sonny Shackelford 219 Davis Lamb 218

Chief Victoria Christiansen and U.S. Trade Representative Katherine Tai seeking prompt action to address this issue that is a growing threat to housing and the economy. l NAHB remains in close contact with the White House and will be meeting with top administration officials later this week to discuss the lumber situation. l At the same time, we continue to reach out to lumber producers, other policymakers and the media calling on lumber mills to increase production to meet growing housing demand. l On the last point, NAHB has saturated with the media with our message on the need to act on soaring lumber prices and how it is hurting home buyers, home builders, the housing industry and the economy. NAHB CEO Jerry Howard delivered this message in an April 22 appearance on Fox Business, Cavuto: Coastto-Coast. The same day NAHB Chief Economist Robert Dietz discussed rising material prices on NPR Marketplace.

Additionally, Fortune, Bloomberg, The Washington Post, The Wall Street Journal, Fox Business online and the Associated Press have mentioned or quoted NAHB on (continued from page 11)

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Life Spikes David Hughes 157 Tonya Esquibel 151 Harry Johnson 146 Helmut Mundt 145 Steve Cates 142 Nick Wisniewski 141 C.W. Bartlett 138 Jordan Clark 125 Steve Shalibo 124 B.J. Hanson 122 Carmen Ryan 121 Steve Hewlett 119 John Zelenak 118 Michael Dillon 115 Justin Hicks 113 Dave McGowan 113 Edsel Charles 110 Brandon Rickman 107 Wiggs Thompson 106 Duane Vanhook 103 Joe Morgan 94 Jeff Zeitlin 87 Keith Porterfield 82 Erin Richardson 77 Jody Derrick 75 Sam Henley 74 Beth Sturm 74 Lori Fisk-Conners 70

the impact of rising lumber prices.

l NAHB is also seeking swift action on the

trade front. Tariffs on Canadian lumber shipments into the U.S. are exacerbating price volatility and increasing housing costs. l In the near term, NAHB invites builders to take advantage of this free sample escalation clause to use in contracts which stipulates that if lumber prices increase by a certain percentage, the customer would be required to pay the extra cost.

The NAHB advocacy team – Government

Jeff Slusher 70 Ron Schroeder 69 Andrew Neuman 63 Marty Maitland 60 Christina James 57 John Broderick 55 Rick Olszewski 52 John Ganschow 51 Phillip Smith 47 Ricky Scott 45 Frank Jones 42 Joe Dalton 41 Frank Tyree 33 Don Mahone 31 Rachel Holloway 27 Jeffrey Caruth 26 Ryan Meade 26 Spikes Perry Pratt 20 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 Matt Dryden 7 McClain Franks 6 Margaret Tolbert 6

Affairs, Communications, Economics and Legal – continues to work doggedly on all fronts to find solutions that will ensure a lasting and stable supply of lumber for the home building industry at a competitive price.

NAHB Senior Economist Paul Emrath provides more analysis on how rising lumber prices have added nearly $36,000 to the price of a new home in this Eye on Housing blog post. Future analysis from NAHB will also examine additional factors, including other building material costs.

Learn more about what NAHB is doing to resolve the lumber crisis at nahb.org. n

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MAY CALENDAR Sunday

Monday

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Wednesday

Thursday

Friday

Saturday

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Sales & Marketing Council Meeting

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Spring Fling and Builders Show

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Sales & Marketing Council 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 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.

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 - 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: 615/883-8526.

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 - David Crane.

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

Next meeting: to be announced.

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 - Christina James.

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

Next meeting: Thursday, May 6th.

Topic: A panel discussion on selling homes in a multi-cultural market.

SMC Members FREE w/RSVP thanks to First Community Mortgage.

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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