Category Archives: Builders

Builders Predict Big Expansion in Construction

Construction of single-family homes is expected to gradually rise this year, as a growing economy, solid employment gains, and rising household formation buoys builders’ forecasts.

Last year, the National Association of Home Builders projected 1.16 million total housing starts in 2016, which was up nearly 5 percent from the previous year. Now NAHB is forecasting a 10 percent increase in single-family production for 2017 and a 12 percent rise for 2018.

Still, there will be pressing challenges as builders look to increase their supplies this year. “While positive developments on the demand side will support solid growth in the single-family housing sector in 2017, builders in many markets continue to face supply-side constraints led by the three Ls — lots, labor and lending,” says NAHB chief economist Robert Dietz. Sixty-four percent of builders reported “low” or “very low” lot supplies. “The industry needs to recruit more workers and get more land in the pipeline, but it will take time.”

Builders are particularly facing challenges building $200,000-range entry-level homes. Regulatory requirements comprise nearly 25 percent of the cost of a new home, which has made construction on lower-cost homes more difficult, Dietz says. Nevertheless, townhome construction, which tends to appeal to younger buyers, is already showing significant growth, comprising 12 percent of all single-family starts, Dietz says. “As millennials age, that is a big potential base to expand the home buyer market,” adds Frank Nothaft, CoreLogic’s chief economist.

While higher mortgage rates may soften demand this year, builders remain upbeat. NAHB forecasts mortgage interest rates to average 4.5 percent in 2017 and then 5.3 percent in 2018. “Higher mortgage rates will be offset by stronger wage gains and job growth, which suggests that housing demand will increase this year,” says David Berson, chief economist for Nationwide Mutual Insurance Co. “The question is: How much will supply go up?”

Many metro areas nationwide are seeing solid job growth, dropping mortgage delinquency rates, and strong housing price gains, Berson notes. He says demand has been exceeding supply and likely will continue to do so in 2017. That could put more pressure on home prices, however. “If there aren’t enough homes on the market, that will be a problem,” Berson syas. “Price gains need to moderate. We can’t have 6, 7, or 8 percent gains. That is not sustainable.”

Source: National Association of Home Builders

Which Is Cheaper: To Buy or Build New?

MP900202134[1]On the surface, buying an existing home seems like the most affordable route to go. After all, the median cost of an existing single-family home is $223,000. On the other hand, the average cost for building new construction averages $289,415.

Obviously, there is quite a bit of variations in sorting out those costs. Plus, the price you pay upfront is only part of the equation when deciding to buy an existing home or build a new one.

A recent article at realtor.com® laid out some of the pros and cons financially of buying a new versus an existing home. Make some of these considerations when weighing the best financial decision:

Square footage: New-homes tend to be more spacious than existing ones at a median size of 2,467 square feet. As such, when you take the average cost of a new build, it breaks down nationally to about $103 per square foot, which is actually lower than the cost of existing homes.

Finishes: With an existing home you inherit all the features and finishes, even if you don’t want them. That may mean you need to budget in some renovations if you’d like to redo anything. With a new home, you’ll be able to choose all the features and finishes yourself and have it set in the price from the get-go. 

Maintenance: Older homes tend to require more maintenance. The cost of upkeep can be pricey too, depending on what needs to be done. For example, the average furnace tends to last about 20 years. When it needs replacement, expect to pay about $4,000. Not to mention, that shingled roof will likely need replacement after about 25 years at a cost of at least $5,000. On the other hand, newer homes tend to need less maintenance because all of the major appliances are brand new and under warranty.

Energy efficiency: Older homes tend to have dated windows and appliances, which can result in less energy efficiency and pricier energy bills. New construction tends to nearly always trump older homes in energy efficiency, according to Kyle Alfriend with the Alfriend Real Group RE/MAX in Ohio. Indeed, homes built post-2000 consume 21 percent less energy for heating than older homes.

Landscaping: Older homes tend to have mature landscaping already in place. And that landscaping can up a person’s property value by thousands. Further, those trees can save an estimated 56 percent on your annual air conditioning bill, according to the U.S. Forest Service. With newer homes, you’ll have to likely pay thousands to install landscaping and may have to wait years to get it to the point you desire.

Appreciation: With an older home, you can see the trajectory of prices based on previous sales prices and of comps nearby. New homes can be a gamble since they do not come with a proven track record of plentiful comps that have been tested over time.

Source: “Is it Cheaper to Buy or Build a House? Compare the Pros and Cons,” realtor.com® (Jan. 5, 2017)

Five home-buying trends for this year’s market

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5 top home-buying trends for this year’s market

(BPT) – If you’re in the market for a new house this year, don’t be fooled by the brisk chill in the air – the spring house-hunting season is actually closer than you think. That means now is the perfect time to start your planning. Space requirements such as bedrooms, bathrooms and square footage are essential, but a house is more than just shelter, it’s your home, and the great ones not only have everything you need, but everything you want.

“Each family lives in their home differently,” says Beazer Homes Senior Creative Manager Michael Phillips. “Some buyers prefer a private dining room, while others want an open-concept kitchen with a more casual eating area. Where one buyer might prefer an owner’s suite on the main level, others may want all their bedrooms on the upper level.”

Although every home buyer’s needs are unique, the market is often dictated by common trends. To better understand your own buying preferences and to see if you’re aligned with others in the real estate marketplace, take a look at these five home-buying trends.

1. Function over aesthetics. When you think kitchen trends, you probably think of design features like granite countertops and stainless steel appliances. While both these options remain popular and are common in new construction, surveys by the National Association of Realtors and the National Association of Home Builders (NAHB) found that buyers were extremely interested in functional attributes like new appliances, eat-in layouts, walk-in pantries and double sinks.

2. Living roo23268680ms are no longer a must. Given today’s diverse home-buying population, the formal living room is becoming less prevalent. “Many buyers would rather use traditional living room square footage in a new way,” said Phillips. “We’re seeing families using the living room as a home office or choosing to forgo the space altogether in exchange for extra square footage in other areas of the home.”

3. New is number one. According to the NAHB, more than half of surveyed buyers want to purchase a new home. It can be a challenge for buyers to find everything they desire in a resale home, and because renovations are often costly and time consuming, it’s hard to deny the appeal of purchasing a brand-new home that is move-in ready.

4. Let there be (energy-efficient) light. Home buyers have coveted homes that make good use of natural light for years and that trend is continuing in 2016. In addition to large windows, NAHB research shows homeowners are putting an increased emphasis on the energy savings that accompany the installation of high-performance windows.

5. Make it your own. Personalizing a new home is easier and more affordable than ever before, thanks to offerings like Beazer’s Choice Plans, which are flexible floorplans that allow you to personalize the most lived-in spaces in your home at no additional cost. Whether you want a kitchen for entertaining or a breakfast nook for family dining, an office space instead of an extra bedroom, you choose … and Beazer won’t charge you for selecting the best layout for your lifestyle. You can learn more about your options and how to create your own dream home at www.beazer.com/choice-plans.

Start your preparation today

It’s never too early to start preparing for shopping for a new home. The more work you do ahead of time, the more time you can spend exploring the market. So start your research now and you’ll be moved into the home of your dreams before you know it.

Put Teresa’s knowledge and expertise of the building industry to work for you to find your new home. Learn more.

Let’s get started! 614-565-8161 or Teresa@TeresaButler.com

Builders Get Ready to Ramp Up Production

4Building permits for single-family and multifamily construction surged to an eight-year high in June, signaling a pick up in homebuilding is on the horizon, the Commerce Department reports.

Permits for future home construction rose 7.4 percent to a 1.34 million unit pace in June, the highest level since June 2007. All four regions of the U.S. – Northeast, Midwest, South, and West – reported gains in housing permits.

Multifamily permits posted the largest increase at 15.3 percent in June, while permits for buildings with five units or more increased to the highest level since January 1990. Permits for single-family homebuilding also rose, increasing 0.9 percent last month.

Economists point to a rise in household formation and an improving labor market that is prompting more young adults to leave their parents’ homes and spark a rise in demand for housing, notably apartments.

A rise in multifamily production helped push housing starts 9.8 percent higher in June month-over-month, reaching a seasonally adjusted annual rate of 1.17 million units, according to the Commerce Department. Multifamily production surged 29.4 percent last month, reaching a seasonally adjusted annual rate of 489,000 units, while single-family housing starts dropped 0.9 percent to 685,000 units.

“The multifamily gains this month are encouraging and show that the millennial generation continues to be drawn to the rental market,” says Tom Woods, chairman at the National Association of Home Builders.

Combined single- and multifamily starts rose by the largest amount in the Northeast, increasing 35.5 percent month-over-month, and by 13.5 percent in the South. The West posted a 6 percent decrease in housing starts and the Midwest a 0.7 percent loss.

Source: “Multifamily Surge Pushes Housing Starts Up 9.8 Percent in June,” National Association of Home Builders and “Strong U.S. Groundbreaking, Building Permits Boost Housing Outlook,”

New-Home Sales Climb to 7-Year High

New-home sales surged to the highest rate since February 2008, as the new-construction market continues to gain ground this year. Sales of newly built single-family homes increased 2.2 percent, reaching a seasonally adjusted annual rate of 546,000 units in May, according to a report from the Commerce Department.

“Our builders are seeing motivated buyers and the release of pent-up housing demand,” says Tom Woods, chairman of the National Association of Home Builders. “However, builders are facing supply-chain challenges, which is affecting the inventory of new homes.”

Sales are nearly 20 percent higher than the pace in May 2014. New-home inventories remain tight at 206,000, a 4.5-month supply at the current sales pace. That’s pushed the average sales price of a new home sold in May to $337,000.

“This month’s new-home sales report is consistent with other government data and rising builder confidence that indicate a continual recovery of the housing market,” says David Crowe, NAHB’s chief economist.

Regionally, new-home sales were mixed in May. They rose 87.5 percent month-over-month in the Northeast and had a 13.1 percent boost in the West. However, new-home sales dropped 5.7 percent in the Midwest and 4.3 percent in the South.

Source: National Association of Home Builders and “New Home Sales Up 2.2% in May,” Forbes.com

New Homes Are Getting Bigger Again

18851646_wideThe average single-family home increased in size at the beginning of this year, showing the desire among buyers for more space, according to the National Association of Home Builders. The upsizing trend runs counter to last year, when the increase in home size had leveled off.

The average square footage of new single-family homes rose from 2,677 square feet in the fourth quarter of 2014 to 2,736 square feet for the first three months of this year. The increase came at a time when there was also a decline in the volume of construction.

“Since cycle lows and on a one-year moving average basis, the average size of new single-family homes has increased 13 percent,” according to the NAHB.

The trajectory with home sizes is following typical post-recession patterns, economists note at NAHB’s Eye on Housing blog. Home sizes tend to drop prior to and during recessions as home buyers cut back. But sizes then often rise as high-end home buyers, who tend to face fewer credit constraints, return to the housing market in greater numbers. Once more first-time home buyers return to the market, housing analysts predict that the standard new home size will trend lower.

Source: “New Single-Family Home Size Increases at the Start of 2015,” National Association of Home Builders’ Eye on Housing Blog (

12 Most Popular New-Home Amenities in 2015

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Master bedroom walk-in-closets and a laundry rooms are the top features that builders are most likely to include in a new home this year, according to a survey of builders conducted by the National Association of Home Builders.

“Both features speak to improving organization and storage characteristics of new homes,” according to NAHB on its Eye on Housing blog.

Greater energy efficiency amenities also were ranked more important, with low-E Windows coming in No. 3 on the most likely amenity list on new homes. Energy-Star rated appliances and windows as well as a programmable thermostat also rated high.

The following were ranked as the most likely features and amenities to be included on an average single-family home in 2015:

  1. Walk-in closet in master bedroom
  2. Laundry room
  3. Low-E windows
  4. Great room (kitchen-family room-living room)
  5. Energy-Star rated windows
  6. Ceiling height on the first floor of 9 feet or more
  7. 2-car garage
  8. Programmable thermostat
  9. Granite countertop in the kitchen
  10. Central island in the kitchen
  11. Bathroom linen closet
  12. Front porch

On the other hand, the features identified in the survey as the most likely to be included in new homes this year are:

  1. Outdoor kitchen (cooking, refrigerators and sinks)
  2. Laminate countertops in the kitchen
  3. Outdoor fireplace
  4. Sunroom
  5. Two-story family room
  6. Media room
  7. Two-story foyer
  8. Walking/jogging trails in the community
  9. Whirlpool in the master bathroom
  10.  Carpeting as the flooring on the main level

Source: “What Builders Are Building,” National Association of Home Builders Eye on Housing Blog

The Top 10 Features for New Homes

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The outdoor kitchen and two-story foyers are starting to lose favor among new home shoppers, while energy efficiency and bigger closets are gaining in popularity, according to a new survey from the National Association of Home Builders. NAHB asked builders to rank home features from 1 to 5 on how likely they were to include them this year in single-family homes they build this year.

An increased interest in energy efficiency is decreasing interest in two-story foyers and rooms, Rose Quint, NAHB’s assistant vice president for survey research, told MarketWatch. “Consumers consider those spaces to be energy inefficient,” she says.

Here are some of the least likely features that builders say they will include in new homes this year:

  1. Outdoor kitchen (cooking, refrigeration, and sink)
  2. Laminate countertops in kitchen
  3. Outdoor fireplace
  4. Sunroom
  5. Two-story family room
  6. Media room
  7. Two-story foyer
  8. Walking/jogging trails in community
  9. Whirlpool in master bathroom
  10. Carpeting as flooring on main level

On the other hand, these home features, builders say, are most likely to be included in a new home this year:

  1. Walk-in closet in master bedroom
  2. Laundry room
  3. Low-e windows
  4. Guest room (kitchen-family-room-living room)
  5. Energy-star rated appliances
  6. 9-foot ceiling or more on first floor
  7. Energy-star rated windows
  8. Programmable thermostat
  9. Two-car garage
  10. Granite countertop in kitchen

Source: “Whirlpool Bathtubs are Losing Out in New Homes,” MarketWatch

New Homes Get Supersized

4The median size of a completed new home last year bloomed to a new record – 2,415 square feet, according to the Commerce Department. But will the supersize trend stick?

During the recession, home sizes got smaller as builders downsized new homes to compete with the flood of discounted foreclosures on the market. The downsizing trend had some housing analysts believe it would be a lasting one, lingering long after the recession.

“All the pundits said ‘the McMansion is dead,’” Douglas Yearley, chief executive of Toll Brothers Inc., a luxury home builder, told investors last fall. “But the American dream is still to chase the big beautiful home with the lavish master suite and the wine room and the media room.” Indeed, home sales recently have confirmed that.

Despite overall sluggish sales in the housing market recently, home sizes continued to rise as builders cater to affluent buyers’ tastes. Builders sold slightly more homes priced above $400,000 than those priced below $200,000 for the first time ever last year, the Commerce Department reports. What’s more, nearly 5 percent of homes sold for at least $750,000 – a record high.

But housing analysts aren’t betting home sizes will set any new records this year. The size of new homes started heading down late last year, which could signal that builders may be refocusing on homes for entry-level buyers in looking to increase sales in 2015, The Wall Street Journal reports.

Source: “U.S. New-Home Sizes Set Record Last Year,” The Wall Street Journal

New-Home Sales Stay Resilient

19576338_webSales of newly built, single-family homes barely budged in January, staying near an elevated December sales reading, according to the latest report from the U.S. Department of Housing and Urban Development and U.S. Census Bureau. For the past two months, new-home sales have been trending at post-recession highs.

“The fact that January sales numbers maintained the gains we made in December is encouraging news, especially consideringharsh weather affecting certain parts of the country,”  said Tom Woods, chairman of the National Association of Home Builders.

New-home, single-family sales dropped 0.2 percent in January, reaching a seasonally adjusted annual rate of 481,000 units. Inventories of new homes for sale were at a 5.4-month supply at the current sales pace in January.

Regionally, new-home sales rose by the largest amounts in the Midwest in January, increasing 19.2 percent in January. New-home sales also rose in the South, by 2.2 percent.

However, new-home sales plummeted in the Northeast, falling 51.6 percent in January, and largely attributed to harsh weather conditions this winter. New-home sales also fell 0.8 percent in the West.

Source: National Association of Home Builders