Builder Journal 2025, Issue 3 (1)

South Carolina

Builder Journal ISSUE 3, 2025

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w w w.h baof2025 sc.com Issu e 3

TABLE OF CONTENTS

p. 3

President 's Message

p. 5

Per m it In f or m at ion

p.6

2025 Fall Con ven t ion In f or m at ion

p. 13

Special St u dy f or Hou sin g Econ om ics

p. 23

Local Happen in gs

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Residen t ial Per m it s

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W e appr eciat e our sponsor s!

Pr esiden t ial

Plat in u m

Gold

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Near ly 75% of U.S. Hou seh olds Can n ot Af f or d a M edian -Pr iced New Hom e in 2025

Febr u ar y 2025 Special St u dy f or Hou sin g Econ om ics Na Zh ao, Ph .D. Econ om ics an d Hou sin g Policy Nat ion al Associat ion of Hom e Bu ilder s

Housing affordability remains a critical issue, with 74.9% of U.S. households unable to afford a median-priced new home in 2025, according to NAHB?s latest analysis. With a median price of $459,826 and a 30-year mortgage rate of 6.5%, this translates to around 100.6 million households priced out of the market, even before accounting for further increases in home prices or

This analysis also highlights the effects of rising costs: - A $1,000 increase in the median price of new homes would price an additional 115,593 households out of the market.

- A 25-basis point rise in the 30-year fixed mortgage rate (from 6.5% to 6.75%) would price approximately 1.1 million households out of the market.

In addition to the national numbers, the article includes equivalent affordability and priced-out results for individual states and more than 300 metropolitan areas.

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Th e Pr iced-Ou t M et h odology an d Dat a The NAHB priced-out model uses the ability to qualify for a mortgage to measure housing affordability. This method is generally relevant because most home buyers finance their new home purchase with conventional loans, following widely recognized underwriting standards. The standard NAHB adopts for its priced-out estimates is that the sum of the mortgage payment (including the principal amount, loan interest, property tax, homeowners?property and private mortgage insurance premiums (PITI), is no more than 28 percent of monthly gross household income.

As a result, the number of households that qualify for mortgages for a certain priced home depends on the household income distribution in an area and the mortgage interest rate at that time. The most recent detailed household income distributions for all states and metro areas are from the 2023 American Community Survey (ACS).

NAHB adjusts the income distributions to reflect the income and population changes that may happen from 2023 to 2025. The income distribution is adjusted for inflation using the 2024 median family income at the state1 and metro2 levels and then extrapolated into 2025. The number of households in 2025 is projected by the growth rate of households from 2022 to 2023.

Other key assumptions in the NAHB?s calculation include a standard 10% down payment and a 30-year fixed rate mortgage at an interest rate of 6.5% with zero points. For a loan with this down payment, private mortgage insurance is required by lenders and thus included as part of PITI. The model assumes the annual private mortgage insurance premium is 73 basis points3 , based on the standard assumption of a national median credit score4 of 738, a 10% down payment and a 30-year fixed mortgage rate. Effective local property tax rates and homeowner insurance rates are derived from the 2023 American Community Survey (ACS)5 , with the U.S. average effective property tax rate being $9 per $1,000 of property value and average homeowner insurance at $3.57 per $1,000 of property value.

1 The state median family income is published by Department of Housing and Urban Development (HUD). 2 The MSA median family income is calculated by HUD and published by Federal Financial Institutions Examination Council (FFIEC). 3 Private mortgage insurance premium (PMI) is obtained from the PMI Cost Calculator( https://www.hsh.com/calc-pmionly.html) 4 Median credit score information is shown in the article ?Four ways today?s high home prices affect the larger economy? October 2018 Urban Institute https://www.urban.org/urban-wire/four-ways-todays-high-home-prices-affect larger-economy 5 Producing metro level estimates from the ACS PUMS involves aggregating Public Use Microdata Area (PUMA) level data according to the latest definitions of metropolitan areas. Due to complexity of these procedures and since metro level 16 insurance rates tend to remain stable over time, NAHB revises these estimates only periodically.

To calculate median new home prices across states and metropolitan areas, NAHB relies on data from the Census Bureau?s Building Permits Survey and the Survey of Construction. Initially, we determine the average value of new home permits for each state and metro area using data from the 2023 Building Permits Survey. It is important to note that permit values typically represent construction costs only and exclude the cost of raw land, brokerage commissions, marketing or financing costs. To convert from average permit values to median new home prices, NAHB employs scaling mark-ups ratios. These ratios are derived by comparing the median new home for each division, as estimated from the Survey of Construction.

Furthermore, to manage the extreme estimates in median new home prices, NAHB implements a quantile-based flooring and capping method. This method identifies outliers by comparing the estimated median new home prices to the median values of newly built homes from the American Community Survey. The outliers are then adjusted by setting a cap at the 90th percentile value and establishing a floor at the 10th percentile value, making sure that the estimates reflect a more accurate and realistic range of new home prices. Finally, the median new home prices are projected forward to 2025 using the latest NAHB home price forecasts.

U.S. Pr iced-Ou t Est im at es Under the assumption of a 6.5% mortgage rate, the minimum income required to purchase a new median-priced home value at $459,826 in 2025 is $141,366. At this income threshold, around 100.6 million U.S. households, or 74.9% of the total 141.1 million households, would be unable to afford this home, shown in Table 1.

A $1,000 increase in the home price increases the minimum income needed to $141,674, pricing out an additional 115,593 households. This calculation shows that even slight increases in housing prices can have a significant impact, pushing more households beyond the threshold of affordability.

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Yor k Cou n t y HBA h ad a gr eat t u r n ou t f or t h e spr in g golf t ou r n am en t .

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Hot Dog! It 's a Pat io Par t y h ost ed by Yor k Cou n t y Nat u r al Gas Au t h or it y.

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Yor k Cou n t y HBA m em ber s en joyed t h eir Fir st An n u al Clay Sh oot .

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Con gr at u lat ion s t o Dou g Hopper of OldCast le APG f or w in n in g t h e $65,000 Hole-in -On e Gr an d Pr ize? a br an d n ew t r u ck , cou r t esy of Fr ed An der son Ch evr olet in Gr eer du r in g t h e Spar t an bu r g HBA's golf t ou r n am en t .

Dou g n ailed a h ole-in -on e on Hole 11 du r in g ou r Spr in g Golf Tou r n am en t in Apr il, secu r in g t h e t op pr ize. He of f icially r eceived h is w in n in gs last w eek .

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Wh y A M ast er Bu ilder ?

* Click Her e f or In f or m at ion on How t o Becom e A Cer t if ied M ast er Bu ilder

* Click h er e f or a list of ou r Cer t if ied M ast er Bu ilder s 33

We h ad a pr odu ct ive visit t o Wash in gt on , D.C., w h er e w e m et w it h ou r con gr essm en t o discu ss k ey issu es im pact in g t h e HBAof SC. Th an k you t o ou r w on der f u l spon sor s Execu t ive Con st r u ct ion , Sou t h east er n In su r an ce Con su lt an t s, an d t h e Cr egger Com pan y!

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2025 HBASC Executive Committee Pr esiden t : Eddie Yan dle, Colu m bia Vice Pr esiden t : Dou g Jam es, Ch ar lest on Tr easu r er : Ryan Kaiser , Cam pobello Secr et ar y: Jay Pin er , Ch ar lest on Im m ediat e Past Pr esiden t : Rob Clem on s, M u r r ells In let Dist r ict #1 Vice Pr esiden t : An dy Bar ber , Ch ar lest on Dist r ict #2 Vice Pr esiden t : Kevin St eelm an , Colu m bia Dist r ict #3 Vice Pr esiden t : Joh n n y Uldr ick , Gr een w ood Dist r ict #4 Vice Pr esiden t : Calvin Sn ow , Lym an Dist r ict #5 Vice Pr esiden t : Ken Gibson , Har t sville Associat es Vice Pr esiden t : David Gw in , Ir m o Legislat ive Ch air per son s: Dar r yl Hall, Flor en ce, An dy Wh it e, Lexin gt on M em ber sh ip Ch air per son : Ed Byr d, Colu m bia NAHB Nat ion al Repr esen t at ive: Br an don Edw ar ds, Hilt on Head NAHB St at e Repr esen t at ive: Bar t Bar t let t , Colu m bia EO Cou n cil Ch air per son : Bin Wilcen sk i, Colu m bia HBASC St af f : Execu t ive Dir ect or : M ar k Nix Dir ect or of Gover n m en t Af f air s: Alex Jam es Dir ect or of Regu lat or y Af f air s: Jam es Gr aves Dir ect or of Accou n t in g: Aidan DeJam es Dir ect or of Oper at ion s: Tar a M or r ison Dist r ict #1 - Ch ar lest on HBA an d t h e Hilt on Head Ar ea HBA Dist r ict #2 - BIA of Cen t r al S.C., HBA of Lan cast er , HBA of Or an gebu r g/ Bam ber g/ Calh ou n , HBA of Yor k Dist r ict #3 - HBA of Aik en , HBA of An der son , Lak elan ds HBA an d t h e HBA of Ocon ee Dist r ict #4 - HBA of Ch er ok ee, HBA of Gr een ville an d t h e HBA of Spar t an bu r g Dist r ict #5 - Hor r y/ Geor get ow n HBA an d t h e HBA of t h e Gr eat er Pee Dee

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