2023 Began With A Boom

Mortgage applications rose during the first weeks of 2023 and the housing market was still going strong. It was reported by the Mortgage Bankers Association (MBA) that the week ending January 13, 2023 mortgage applications rose 27.9% from the week before. This is still 35% below the levels that were reported in January 2022.

“Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall. As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers,” says MBA chief economist Mike Fratantoni.

The end of 2022 the housing market was slowing down due to high home prices and rising mortgage rates that have doubled since 2021. “We’re seeing decade-low readings for just about every index that you can imagine for housing,” says NAHB chief economist Robert Dietz.

The lack of inventory is causing the market to slow and experts say that the months ahead will slow down even more. This is a great time to get out there and purchase a home. Choose a realtor who can help you from start to finish and help find your dream home.

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 Natural disasters are becoming more common as climate risks increase. Homes and neighborhoods all around the country are being affected by the record, wildfires, floods, and other natural disasters. Unfortunately because of these increasing risks, a good many insurance companies are decreasing their options, increasing premiums, and even not offering insurance in certain areas. Homeowners and home builders are feeling the effects as seen in the huge gap between insured and uninsured losses.

Because of this growing issue, the National Association of Home Builders (NAHB) began the Climate Change Insurance Task Force in 2021. The task force's purpose was to study these issues and provide a recommended roadmap for the home building industry, focused on identifying gaps and challenges in current insurance products available to homeowners to cover losses from wildfires, flooding, earthquakes, extreme heat, and other climate-related losses and, identified alternatives and recommended next steps to ensure our members and their customers have access to appropriate insurance products.  Their final report was given to the Senior Officers in April 2022 and included introducing more options for multi-state insurance and looking into Congress forming an all-disaster reinsurance policy. This policy would then be supported by the federal government.

Due to the outcome of the study, NAHB will now start meeting with insurance trade groups to see how they stand with the NAHB's high-priority recommendations. They will also develop resources and keep members at the Spring Leadership Meetings aware of any updates.

Through the communication and updates, NAHB is striving to resolve the insurance challenges. They will continually address the changing natural disasters and how they are affecting housing stock in the country. Their goal is to consistently explore the options that will help with these rising concerns at the local, state, and federal government levels.

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Patios Are Now Built on Over Half of New Homes

The National Association of Home Builders reported that over 60% of new homes built in 2020 have patios. This is the first time since the Census Bureau's 2005 survey that patios have been on over 50% of new homes. There were around 990,000 single-family homes started in 2020 and 61.4% of these homes had patios.

The shares of new homes with patios started to dip in 2007 from 50.4% in 2006 to 48.8% in 2007. The shares did not begin on the upwards trend again until 2011. The big increase from 2019 at 59.6% to 2020 at 61.4% was due to buyers' change in desires in what they want in a home. The pandemic caused us to rethink what is important when it comes to a home. Having a private place to spend outdoors became very important.

The nine US Census divisions also saw a drastic change across the board. Surprisingly the Mountain division was the highest at 74%, next was West South Central at 73%, the South Atlantic at 67%, and the Pacific at 59% all at over 50%. The remaining regions were all under 50% with the East North Central coming in at 47%, the West North Central and East South Central at 41%, New England at 21% and Middle Atlantic at 19%.

As for the construction and size of patios, those also differ. The majority of the patios across the board are constructed of poured concrete, followed closely by concrete and brick pavers. The average size across the board for a patio on a new single-family home was reported to be about 278 square feet. The largest were over 350 square feet in the Mid Atlantic, East North Central and Pacific divisions. The smallest which were under 200 square feet were found in the East South Central division.

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2021 Sees a Record High in Private Residential Spending

The total private residential construction spending is 21% higher than reported a year ago. The National Association of Home Builders (NAHB) analysis of Census Construction Spending data reported a 2.5% rise in total private residential construction spending in January. January saw a seasonally adjusted annual rate of $713 billion making this a record high.

The pandemic has caused many of us to spend more time at home. The gains were stemmed from ” strong growth of spending on single-family and improvements.” In January, the data shows that single-family construction hit a $376.2 billion annual pace which was up by 3%. There was also a 2.3% increase in spending on remodeling, major replacements and additions.

Although the majority of the surge in spending was in homebuilding, there was also a rise in public and private non-housing-related construction.

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2021 New American Home Has 4 Green Strategies To Follow

The New American Home 2021 is located in Winter Park, Florida and is the official show home of the NAHBInternational Builders’ Show® (IBS). The home conveniently located in the downtown area close to restaurants, shops, and parks.

This single-family three-story home incorporates innovative technology and current trends in a high-end, sophisticated setting. The design and construction of the home follows the National Green Building Standard “Emerald” certification, Energy Star, and net-zero status.

“Building green does not need to be more difficult or extremely costly,” said Drew Smith, NGBS Green Master Verifier of Two Trails, Inc. who oversaw the NGBS Green Emerald Level certification for both homes. “Finding what makes sense for you and your clients is the best way to deliver a high-performance certified project.”

This home features four high-performance strategies that can be added to any new construction or renovation.

1. Tight Thermal Envelope

This will basically reduce hot or cold air from seeping in from the exterior walls of your home. By doing this, you will lower utility bills and make your living space more comfortable. The thermal envelope of your home includes wall and roof assemblies, insulation, air/vapor retarders, windows, and weatherstripping and caulking. Make sure to use a higher insulation value in the walls and attic spaces of your home. Use windows that have Low-E coating that will reduce the amount of solar heat that comes in through the windows and are filled with argon gas which keeps airtightness. Exterior concrete masonry unit (CMU) walls filled with corefill foam/reflective insulation are a good way to keep a layer in between the inside of your home and the outdoor elements.

2. Indoor Air Quality (IAQ) and Comfort

This is the air quality that is in your home as it relates to the health and comfort of those living in the home. An indoor space must have fresh air exchange and proper ventilation. Pollutants found in your home range from oil, gas, kerosene, coal, wood, tobacco products, building materials (damp carpet or pressed wood), household cleaners, HVAC, radon, pesticides and outdoor air pollution. The home should be able to have proper ventilation along with the ability to maintain relative humidity. A good way to do this is by using bath fans and kitchen range hoods. For the HVAC system use MERV 13 space conditioning air filters. When painting or caulking in the home use Low/no volatile organic compounds (VOCs). Furniture, appliances and building materials should be composed of healthy, eco-friendly finishes.

3. Above-Code Energy Efficiency

The U.S. Department of Energy has energy codes that builders must follow. These codes establish minimum energy efficiency requirements for new construction and renovations. New homes built above the standard code can reduce energy consumption by 40% and will not have much higher construction costs. When building a new home or renovating use a tight envelope, correct sized HVAC-R systems for your home, 100% LED lighting exterior/interior, ENERGY STAR appliances and smart home technology for lighting control and climate control.

4. Above-Code Water Efficiency

Water efficiency is based on how we use our water resources. The goal is to reduce our use through water-saving technologies. Simple steps such as fixture choices, plumbing layout design, landscape design, and smart (or no) irrigation can help achieve water efficiency. Choose EPA WaterSense®  labeled plumbing fixtures. When it comes to hot water, use a tankless water heater with insulated water lines and on-demand hot water recirculating pumps. For landscaping use Indigenous landscaping with a minimum of turfgrass and for irrigation use micro-spray, driplines and programmable controllers.

These are just a few steps that you can take to make your home greener. A green home will be a more comfortable and healthy environment to live in as well as a money saver on utilities.

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Data Released Shows November 2020 Gains in Single-Family Permits

The National Association of Home Builders' Eye on Housing reported that there was a 12.2% increase of single-family permits on a year-over-year basis from November 2019. The November 2020 number reached to 888,217 while the November 2019 level just hit 791,452.

The South had an increase of 14.4% single-family permits which was the highest in all four regions. The other three regions were as follows, Midwest had an 11.7% increase, the West had an 8.5% increase and the Northeast had the lowest at 8%.

Delving even more into the data, 45 states saw an increase in single-family permits while 5 states and the District of Columbia saw a decline. The highest record was Vermont with a 37.8% increase while the District of Columbia saw the lowest at a decline of 19.6%. The ten highest states issuing the highest number of single-family permits were Vermont, Maine, New Hampshire, South Dakota, Delaware, Nebraska, Arizona, Missouri, Utah, and Texas. These states totaled 61.3% of the country's total single-family permits issued.

At the local level, below are the top 10 metro areas that issued the highest number of single-family permits.

Metropolitan Statistical Area	Single-family Permits: Nov (Units #YTD, NSA)
Houston-The Woodlands-Sugar Land, TX	43,458
Dallas-Fort Worth-Arlington, TX	39,492
Phoenix-Mesa-Scottsdale, AZ	28,376
Atlanta-Sandy Springs-Roswell, GA	25,559
Austin-Round Rock, TX	19,375
Charlotte-Concord-Gastonia, NC-SC	16,399
Tampa-St. Petersburg-Clearwater, FL	14,629
Orlando-Kissimmee-Sanford, FL	14,169
Nashville-Davidson-Murfreesboro-Franklin, TN	12,759
Washington-Arlington-Alexandria, DC-VA-MD-WV	12,254

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More 2021 Buyers Want a Newly-Built Home

 The National Association of Home Builders' Housing Trends Report for the final quarter of 2020 shows a dramatic increase in buyers' interest in new construction homes. The report revealed that 41% of prospective buyers were looking for a newly-built home which is more than twice the percentage reported in 2019.

The NAHB Economics team researches and produces the Housing Trends Report each quarter. The teamsurveys and measures prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets. The HTR is produced quarterly to track changes in buyers’ perceptions over time. All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult.

According to the report, Q419 looks very different from Q420 when it comes to the type of home buyers are looking for. In 2019 40% of homebuyers wanted an existing home, this decreased to 30% in 2020. Those buyers who would purchase a new or existing home fell from 41% in 2019 to 29% in 2020. For new homes in 2019, only 19% of buyers said they would just purchase a new construction home while in 2020 buyers who saught only new construction rose to 41%.

As far as the data broken down by generations, 50% of millennials are looking for a new construction build while 50% of baby boomers prefer to purchase an existing home. Out of the Gen X buyers, 48% prefer a new construction home while 38% of Gen Z buyers want to purchase an existing home.

The report also shows a difference in preferences in each region of the country. Most potential buyers in the Northeast (53%) and the West (51%) are looking for a new build. In the South only 33% preferred a new construction home and in the Midwest only 24%.

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