NAHB Recognizes the Best in Green and Sustainable Building

The National Association of Home Builders (NAHB) today announced the winners of its Best in Green (BIG) Awards at a ceremony during the NAHB International Builders’ Show in Las Vegas.

In its fifth year, the BIG Awards received outstanding nominations and brought recognition to the best of the best green certified projects in a variety of categories. Categories included single-family homes, multifamily projects, communities and remodeling.  Winners were chosen based on their innovative use of green features, aesthetics, functionality, amenities and high performance certifications.

In addition to the top green projects, the BIG Awards also honored two Home Builders Associations who have long been advocates and leaders in the green and sustainable space.

“The Best in Green Awards are the industry’s most prominent awards recognizing projects and individuals that are leading the way in high performance and sustainability,” said Ray Tonjes, NAHB’s 2018 Sustainability & Green Building Subcommittee Chairman from Austin, Texas. “This year’s award winners are a particularly impressive group, representing the best of the best across several sectors of the building industry.”

This year’s winners include:

  • Best in Green 55+ Community: Mirabella, Bradenton, Florida, submitted by Koral & Gobuty Development, LLC
  • Best in Green Community: Mahncke Park, San Antonio, Texas, submitted by Imagine Homes
  • Best in Green Community: Caliza Courts Rowhouses, Alys Beach, Florida, submitted by Green$mart Companies
  • Best in Green Multifamily Affordable Project: Elements Collection, Denver, Colorado submitted by Thrive Home Builders
  • Best in Green Multifamily Market Rate Project: Ten at Clarendon, Arlington, Virginia, submitted by CBG Building Company
  • Best in Green Single-Family Custom Home: Historic Infill Home, Decatur, Georgia, submitted by SK Collaborative
  • Best in Green Single-Family Production Home: Panacea Collection, Denver, Colorado, submitted by Thrive Home Builders
  • Best in Green Remodeling Project: Norcross Remodel, Dallas, Texas, submitted by Ferrier Builders Inc.
  • Best in Green NGBS Project of the Year, Historic Infill Home, Decatur, Georgia, submitted by SK Collaborative
  • Best in Green HBA of the Year (two winners), Santa Fe Area Home Builders Association and Home Builders Association of Metro Portland

“In addition to the best in green building and remodeling projects, we were pleased to be able to recognize the great work our members are doing in their local communities to support sustainable living,” noted Tonjes. “Both the Santa Fe Area HBA and the HBA or Metro Portland had such active and impactful voices in their local green building markets in very different ways, that the judges thought two awards should be given this year to celebrate the achievements within the Federation.”

To see the finalists and other additional information about the Best in Green awards visit nahb.org/bigawards.

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Headwinds Will Limit Single-Family Gains in 2019

Mounting housing affordability concerns coupled with supply-side constraints will limit single-family output to modest gains in 2019, according to economists speaking at the National Association of Home Builders (NAHB) International Builders’ Show in Las Vegas today.

“Ongoing job creation and solid household formations will keep demand firm, but builders will continue to grapple with supply-side headwinds that will dampen more vigorous growth in the single-family sector,” said NAHB Chief Economist Robert Dietz.

Specifically, builders are dealing with a chronic lack of construction workers; a shortage of buildable lots; onerous regulations; tariffs on lumber and other key building materials; and a slow growth in acquisition, development and construction loan activity that is failing to keep pace with demand.

All of these factors, plus home price appreciation over the past year that has outpaced wage gains, are contributing to rising affordability woes in the housing sector.

The NAHB/Wells Fargo Housing Opportunity Index released last week shows that housing affordability continues to hover at a 10-year low, with 56 percent of households able to afford a median-priced home in the fourth quarter of 2018. But a closer look at the numbers reveals that the affordability rate fell to 35 percent when only factoring in newly-built homes.

One bright spot is townhome construction, which can serve as a useful bridge for young buyers to transition to homeownership, is expanding at a robust 24 percent annualized growth rate.

The Forecast

Interest rates are anticipated to gradually rise, as NAHB expects 30-year fixed-rate mortgages will average 4.81 percent in 2019 and 5.08 percent next year.

NAHB is projecting 1.26 million total housing starts in 2018, and expects overall production to inch up 0.8 percent this year to 1.27 million units.

Single-family starts are expected to hit 876,000 units in 2018, and rise an additional 2 percent to 894,000 this year. That’s still well below the 1.1 to 1.2 million units that demographics would support. Some of this shortfall is being made up by increased use of accessory dwelling units.

On the multifamily side, NAHB is expecting multifamily starts to hit 386,000 units in 2018 and level off two percentage points to 379,000 this year. This rate of production is considered sustainable due to demographics and the balance between supply and demand.

Meanwhile, residential remodeling activity is projected to increase in the future, but at a softening rate of 4 percent growth in 2019 followed by a 2 percent gain in 2020.

South and West are Hot Spots

Delving beneath the national numbers, the South and West are the regions that will lead new-home growth in the year ahead, according to Frank Nothaft, chief economist at CoreLogic.

“Metros with good affordability, good job growth and good weather have had the highest growth in new-home sales over the last year,” said Nothaft.

New-home sales are rising fastest in the South. Leading the way are Houston, Dallas, Atlanta, Phoenix and Austin, Texas, which all averaged more than 1,000 new-home sales per month between Nov. 2017 and Oct. 2018.

Lafayette, La.; Ocala, Fla.; Wilmington, Del.; Coeur d’Alene, Idaho; and Lakeland, Fla. were the metropolitan areas that posted the highest new-home growth in terms of percentage increases over the 12-month period ending on Oct. 2018.

Nothaft added that builders continue to be hampered by rising labor and construction costs.

Recession Not in the Cards

Looking at the big picture, David Berson, senior vice president and chief economist at Nationwide Insurance, said there is a low risk of a near-term recession. However, he said that economic growth is expected to slow modestly this year in response to trade/tariff issues, higher interest rates and diminishing fiscal stimulus from the 2017 passage of the Tax Cuts and Jobs Act.

Berson expects the Federal Reserve to tighten interest rates two or three times this year, with fewer moves in future years. This anticipated action, along with inflation edging higher, should result in a modest rise in 30-year mortgage rates in 2019.

In a sign that a recession is not imminent, Berson observed that the spread between the 10-year and 1-year Treasury notes have narrowed and flattened significantly over the past year, but the yield curve is not inverted. An inverted yield curve means that the yields on bonds with a shorter duration are higher than the yields on bonds with a longer duration.

Berson noted that the best leading indicator of a recession is a yield curve that fully inverts for about three months. Even then, there is usually a lag time of 12 to 18 months following an inverted yield curve before a recession hits.

“The start date for the next recession is uncertain, but the odds rise as we look out two to three years,” Berson said.

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Community, Development Firms of the Year Named in the 2018 NAHB Multifamily Pillars of the Industry Awards

Parcels at Concourse in Memphis, Tenn., was named Multifamily Community of the Year and Gables Residential, based in Atlanta, was named Multifamily Development Firm of the Year by the National Association of Home Builders (NAHB) as part of the association’s Multifamily Pillars of the Industry Awards for 2018.

A group of non-profits in Memphis took a decaying 1.5 million square-foot building that had been abandoned for decades and transformed it into the Parcels at Concourse. The 1927-vintage Sears distribution center became a “vertical urban village” that includes 265 apartments, restaurants and other retail businesses, as well as art galleries, non-profit offices and residency programs for artists, teachers, doctors and families of children receiving medical treatment.

“The Parcels at Concourse took on a building that seemed impossibly problematic and created a vital and appealing urban community,” said Steve Lawson, president of The Lawson Companies in Virginia Beach, Va., and chairman of NAHB’s Multifamily Council. “The project not only transformed the building and the neighborhood, but also houses great resources for the community at large.”

Gables Residential uses a team approach to develop its properties, enlisting input from employees throughout the company before meeting with architects, land planners, contractors and interior designers. It searches out sites in walkable neighborhoods that have quality schools and are near major metropolitan employment centers, public transit and retail and entertainment districts. Gables makes sustainability a top priority and aims to certify every building to current green construction standards, which leads to durable buildings that cost less to run.

“Gables prides itself on serving its residents, its employees and the communities across the country where it has properties,” said Lawson. “That commitment to quality creates an engaging place to work, enhances community vitality and results in places that people are glad to call home.”

A panel of multifamily development and design experts also selected winners in categories ranging from excellence in building and marketing to individual and corporate achievement. Winners from all categories were recognized at a ceremony held today during the International Builders’ Show in Las Vegas. To see a complete list of winners, visit: www.nahb.org/pillarsawards.

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Residential Remodeling Spending Continues to Gradually Grow

Spending on residential improvements will continue to grow over the next two years at a gradual pace, according to experts at a press conference hosted by the National Association of Home Builders (NAHB) Remodelers during the International Builders’ Show in Las Vegas. Professional remodelers from across the country agreed with the forecast, citing increased consumer confidence and demand.

NAHB predicts that remodeling spending for owner-occupied single-family homes will increase 1.6 percent in 2019 and another 1.1 percent in 2020.

“Remodeler confidence continues to remain at a high level, as remodeling spending reached $172 billion in 2018,” said 2018 NAHB Remodelers Chair Joanne Theunissen, CGP, CGR, a remodeler from Mt. Pleasant, Mich. “Although there is steady consumer demand in all areas of the country, the biggest challenges continue to be the costs of labor and materials to meet the interest.”

“We’re not only seeing more requests for proposals, but more home owners are choosing to incorporate aging-in-place design into their homes,” said Thomas Ashley, Jr., CAPS, CGP, CGR, a remodeler from Denham Springs, La. “The older housing stock combined with aging home owners allow growth in that sector of the market.”

“NAHB estimates that real spending on home improvements will continue to grow but at a slow place of about 1.6 percent in 2019,” said Danushka Nanayakkara-Skillington, NAHB’s Assistant Vice President for Forecasting and Analysis. “Factors prohibiting stronger growth include the ongoing labor shortage and rising material prices.”

The Remodeling Market Forecast is updated monthly and available for download with a subscription to housingeconomics.com.

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Lower Interest Rates, Rising Consumer Confidence Boost Builder Sentiment

Builder confidence in the market for newly-built single-family homes rose four points to 62 in February, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today in Las Vegas during the 75th  annual International Builders’ Show.

“Ongoing reduction in mortgage rates in recent weeks coupled with continued strength in the job market are helping to fuel builder sentiment,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “In the aftermath of the fall slowdown, many builders are reporting positive expectations for the spring selling season.”

February marked the second consecutive month in which all the HMI indices posted gains. The index measuring current sales conditions rose three points to 67, the component gauging expectations in the next six months increased five points to 68 and the metric charting buyer traffic moved up four points to 48.

“Builder confidence levels moved up in tandem with growing consumer confidence and falling interest rates,” said NAHB Chief Economist Robert Dietz. “The five-point jump on the six-month sales expectation for the HMI is due to mortgage interest rates dropping from about 5 percent in November to 4.4 percent this week. However, affordability remains a critical issue. Rising costs stemming from excessive regulations, a dearth of buildable lots, a persistent labor shortage and tariffs on lumber and other key building materials continue to make it increasingly difficult to produce housing at affordable price points.”

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.

Looking at the three-month moving averages for regional HMI scores, the South posted a one-point gain to 63 while the Northeast dropped two points to 43.  The Midwest and West each remained unchanged at 52 and 67, respectively.

Editor’s Note: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be found at nahb.org/hmi. More information on housing statistics is also available at housingeconomics.com.

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