The Nail, July 2023

THE NAIL

The official magazine of Home Builders Association of Middle Tennessee President

Brandon Rickman

Vice President Jim Hysen

Secretary/Treasurer

Kelly Beasley

Executive Vice President John Sheley

Editor and Designer Jim Argo

Staff

Connie Nicley

Kim Grayson

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.

FEATURES

11

HBAMT mixers kick off the Summer season last month

The Williamson County Chapter and Sales & Marketing Council of the HBAMT held membership mixer events last month to kick off the Summer season in grand style.

14

Hardie Golf Tournament sponsorships!

James

The HBAMT’s Annual Golf Tournament returns this August to the Towhee Club in Spring Hill. Foursomes for the event have SOLD OUT. Sign up now as a sponsor and join us on the course for all the fun! Register today!

DEPARTMENTS

6 News & Information

15 SPIKE Club Report

16 July Calendar

16

Chapters and Councils

ON THE COVER:

Housing saw positive gains in both starts and sales in recent months. See pages six (6) and seven (7) for more details.

New home sales jump in May on lack of existing inventory

Alack of existing inventory coupled with solid consumer demand helped to boost new home sales in May to their highest level since February 2022.

Sales of newly built, single-family homes in May increased 12.2% to a 763,000 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.

“Demand for new homes is strengthening because of a lack of existing home inventory,” said Alicia Huey, chairman of the National Association of Home Builders (NAHB) and a custom home builder and developer from Birmingham, Ala. “And while builders continue to grapple with elevated construction costs, an encouraging sign is a big gain in home sales priced in the $200,000 to $300,000 price range. In May 2022, just 5,000 homes sold in this range and that total increased to 12,000 in May 2023.”

“The lack of resale homes available for sale, at just a three months’ supply, is sup-

porting demand for newly built homes,” said NAHB Chief Economist Robert Dietz. “New home inventory was 31% of total inventory in May. Historically it is typically 10% to 15%. Further, the pace of resales is down 20% from a year ago, while the rate of new home sales is up 20% from a year ago.”

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 May reading of 763,000 units is the number of homes that would sell if this pace continued for the next 12 months.

New single-family home inventory in May was 428,000, down 2.9% compared to a year ago. This is down to a more balanced 6.7 months’ supply at the current building pace, despite tight existing home supply conditions. A measure near a 6 months’ supply is considered balanced.

The median new home sale price in May was $416,300, down 7.6% compared to a year ago.

Regionally, on a year-to-date basis, new home sales are up 0.8% in the Northeast and 1.6% in the South. New home sales are down 2.5% in the Midwest and 20.7% in the affordability-challenged West n

The lack of resale homes available for sale, at just a three months’ supply, is supporting demand for newly built homes.

Builders confidence moves into positive territory in June

Solid demand, a lack of existing inventory and improving supply chain efficiency helped shift builder confidence into positive territory for the first time in 11 months.

Builder confidence in the market for newly built single-family homes in June rose five points to 55, according to the NAHB/Wells Fargo Housing Market Index (HMI) released today. This marks the sixth straight month that builder confidence has increased and is the first time that sentiment levels have surpassed the midpoint of 50 since July 2022.

“Builders are feeling cautiously optimistic about market conditions given low levels of existing home inventory and ongoing gradual improvements for supply chains,” said NAHB Chairman Alicia Huey. “However, access for builder and developer loans has become more difficult to obtain over the last year, which will ultimately result in lower lot supplies as the industry tries to expand off cycle lows.”

“A bottom is forming for single-family home building as builder sentiment continues

to gradually rise from the beginning of the year,” said NAHB Chief Economist Robert Dietz. “This month marks the first time in a year that both the current and future sales components of the HMI have exceeded 60, as some buyers adjust to a new normal in terms of interest rates. The Federal Reserve nearing the end of its tightening cycle is also good news for future market conditions in terms of mortgage rates and the cost of financing for builder and developer loans.”

Dietz further noted the Fed and Washington policymakers must factor into consideration how the state of home building is critical for the inflation outlook and the future of monetary policy.

“Shelter cost growth is now the leading source of inflation, and such costs can only be tamed by building more affordable, attainable housing – for-sale, for-rent, multifamily and single-family,” he said. “By addressing supply chain issues, the skilled labor shortage, and reducing or eliminating inefficient regulatory policies such as exclusionary zoning, policy-

Single family starts post solid gains in May

Limited existing inventory combined with solid demand and improving supply chains helped push single-family starts to an 11-month high in May.

Overall housing starts in May increased 21.7% to a seasonally adjusted annual rate of 1.63 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

The May reading of 1.63 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 18.5% to a 997,00 seasonally adjusted annual rate. However, this remains 6.6% lower than a year ago. The multifamily sector, which includes apartment buildings and condos, increased 27.1% to an annualized 634,000 pace.

“Mirroring rising builder sentiment, single-family permits and starts increased in May

as builders boosted production to meet unmet demand,” said Alicia Huey, NAHB chairman. “Despite elevated interest rates that make the cost of housing more expensive, the lack of existing home inventory in most markets is leading to increased demand for new construction.”

“The May housing starts data and our latest builder confidence survey both point to a bottom forming for single-family residential construction earlier this year,” said NAHB Chief Economist Robert Dietz. “There have been some improvements to the supply-chain, although challenges persist for items like electrical transformers and lot availability. However, due to weakness at the start of the year, single-family housing starts are still down 24% on a year-to-date basis.”

And while single-family starts are down 24% year-to-date, single-family completions are down just 1.2% as projects started at the end of last year finish. Of note, the May housing data shows that the number of single-fam-

makers can play an important and much-needed role in the fight against inflation.”

Derived from a monthly survey that NAHB has been conducting for more than 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.

All three major HMI indices posted gains in June. The HMI index gauging current sales conditions rose five points to 61, the component charting sales expectations in the next six months increased six points to 62 and the gauge measuring traffic of prospective buyers increased four points to 37.

Looking at the three-month moving averages for regional HMI scores, the Northeast edged up two points to 47, the Midwest increased four points to 43, the South moved three points higher to 55 and the West posted a five-point gain to 46. n

ily homes under construction is down 16% compared to a year ago at 695,000, while the number of apartments under construction is up 17% to 994,000—the highest level since September 1974.

Dietz also noted that the May housing data signals a positive development on the inflation front. “Additional housing supply is good news for inflation data, because more inventory will help reduce shelter inflation, which is now a leading source of growth for the CPI,” he said.

On a regional and year-to-date basis, combined single-family and multifamily starts are 11.0% lower in the Northeast, 15.0% lower in the Midwest, 12.3% lower in the South and 24.7% lower in the West.

Overall permits increased 5.2% to a 1.49 million unit annualized rate in May. Single-family permits increased 4.8% to an 897,000 unit rate, but are down 25.5% yearto-date. Multifamily permits increased 5.9% to an annualized 594,000 pace.

Looking at regional permit data on a yearto-date basis, permits are 21.1% lower in the Northeast, 24.7% lower in the Midwest, 16.5% lower in the South and 24.1% lower in the West. n

HBAMT Mixers kick-off Summer season!

The HBAMT enjoyed multiple membership mixers last month thanks to the Williamson County Chapter and the Sales & Marketing Council. The chapter held a fun-filled event at Barrels & Brews in Franklin, a popular establishment owned by HBAMT Past President Jimmy Franks who helped host the event along with event sponsor Lennar Homes. Attendees enjoyed tasting a variety of bourbons, brews, tequilas, and wines while mingling with friends and visiting the hors d’oeuvres station.

The council’s summer mixer was held at the Blue Moon Waterfront Bar & Grille and sponsored by Ole South Properties, Drees Homes, and Intex Contracting. The scenic eatery and watering hole was the perfect location for a Summer-themed event with open deck seating nestled on the waters of the Cumberland River. See page thirteen for more SMC Mixer photos

A big thanks again to all our event sponsors and hosts! n

Jimmy Franks, Connie Nicley, and Derek Budde shop for door prizes given away at the chapter mixer Barrels & Brews.

SMC MIXER! Summer

Twenty-four 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 May 31, 2023.

CHAPTERS & COUNCILS

CHAPTERS

CHEATHAM COUNTY CHAPTER

Chapter President - Roy Miles Cheatham County Chapter details are being planned. Next meeting: to be announced.

RSVP to: cnicley@hbamt.org

DICKSON COUNTY CHAPTER

Chapter President - Mark Denney Dickson County Chapter details are currently being planned. Next meeting: to be announced. Price: FREE, lunch dutch treat.

RSVP to: cnicley@hbamt.org

MAURY COUNTY CHAPTER

Chapter President - Lisa Underwood

Maury County Chapter details are currently being planned. Next meeting: to be announced.

RSVP to: cnicley@hbamt.org

METRO/NASHVILLE CHAPTER

Chapter President - Tonya Esquibel

The Metro/Nashville Chapter typically meets on the third Tuesday of the month, 11:30 a.m. at the HBAMT offices.

*The Chapter will vacation in July*

Next meeting: to be announced.

Topic: to be announced.

RSVP to: cnicley@hbamt.org

ROBERTSON COUNTY CHAPTER

Next meeting: to be announced.

RSVP to: cnicley@hbamt.org

SUMNER COUNTY CHAPTER

Chapter President - Joe Dalton

The Sumner County Chapter typically meets on the fourth Tuesday of the month, 11:30 a.m. at the new Hendersonville Library.

*The Chapter will vacation in July*

Next meeting: to be announced.

RSVP to: cnicley@hbamt.org

WILLIAMSON COUNTY CHAPTER

Chapter President - Christina James

The Williamson County Chapter typically meets on the third Tuesday of the month, 11:30 a.m. at the HBAMT offices.

*The Chapter will vacation in July*

Next meeting: to be announced.

RSVP to: cnicley@hbamt.org

WILSON COUNTY CHAPTER

Chapter President - Margaret Tolbert

The Wilson County Chapter typically meets on the second Thursday of the month at varying locations in the Wilson County area.

*The Chapter will vacation in July*

Next meeting: to be announced.

RSVP to: cnicley@hbamt.org

COUNCILS

HBAMT REMODELERS COUNCIL

Council President - Eli Routh

The HBAMT Remodelers Council meets at varying locations throughout the year.

*The Council will vacation in July*

Next meeting: to be announced.

RSVP to: cnicley@hbamt.org

INFILL BUILDERS COUNCIL

Infill Builders Council details are currently being planned. Next meeting: to be announced.

MIDDLE TENN SALES & MARKETING COUNCIL

Council President - Kelvey Benward

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

*The Council will vacation in July*

Next meeting: Thursday, August 3rd at the HBAMT. Topic: to be announced.

$15 w/RSVP, $20 w/o RSVP

RSVP REQUIRED - LIMITED SEATING

RSVP to: cnicley@hbamt.org