THE NAIL
The official magazine of Home Builders Association of Middle Tennessee
President Jim Hysen
Vice President Kelly Beasley
Secretary/Treasurer Eli Routh
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.
latest NAHB study on home buyer preferences asked consumers about the window and door features they most desire in a
Fest and Builders Show returns
October Register now to participate as a SPONSOR at this month's Annual Fall Fest and Builders Show. Builders only event, non-bulders must be an exhibitor or a sponsor to attend. Exhibit booths have sold out!
New home sales fall in August, buyers wait out rate cut
Expectations of the Federal Reserve beginning the first in a series of rate reductions kept potential home buyers in a holding pattern in August.
Sales of newly built, single-family homes in August fell 4.7% after an unusually strong July, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. August new home sales registered a 716,000 seasonally adjusted annual rate, after an upwardly revised estimate of 751,000 for July. Despite the slip in August, the three-month moving average for new home sales is at its highest level since March of 2022. New home sales are up 4% on a year-to-date basis through August.
“Builder sentiment and future sales expectations are improving as the Federal Reserve begins a credit easing cycle,” said Carl Harris, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Wichita, Kan. “However, due to the mortgage interest lock-in effect, declining interest rates will mean rising existing home inventories and some additional new competition for home builders.”
“While a 7.8 months’ supply may be considered elevated in normal market conditions, there is currently only a 4.1 months’ supply of existing single-family homes on the market,” said NAHB Chief Economist Robert Dietz.
“Combined, new and existing total months’ supply remains below historic norms at approximately 4.7, although this measure is expected to increase as more home sellers test the market in the months ahead.”
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 August reading of 716,000 units is the number of homes that would sell if this pace continued for the next 12 months.
New single-family home inventory increased 1.7% to 467,000 in August, a 7.8 months’ supply at the current sales pace. Completed, ready to occupy inventory increased to 105,000 homes, which is the highest level since 2009. However, this share makes up only 22% of new home inventory.
Median new home price fell back to $420,600, down 4.6% from a year ago due to builder price incentives amid multidecade highs for housing affordability challenges. The Census data reveals a gain for new home sales priced below $300,000, which made up 18% of new home sales in August compared to 12% a year ago.
Regionally, on a year-to-date basis, new home sales are up in all four regions, rising 2.1% in the Northeast, 21.9% in the Midwest, 0.8% in the South and 4.7% in the West n
Builder sentiment on the rise as rates fall
With mortgage rates declining by more than one-half of a percentage point from early August through mid-September, per Freddie Mac, builder sentiment edged higher this month even as builders continue to grapple with rising costs.
Builder confidence in the market for newly built single-family homes was 41 in September, up two points from a reading of 39 in August, according to the NAHB/Wells Fargo Housing Market Index (HMI) released today. This breaks a string of four consecutive monthly declines.
“Thanks to lower interest rates, builders now have a positive view for future new home sales for the first time since May 2024,” said NAHB Chairman Carl Harris. “However, the cost of construction remains elevated relative to household budgets, holding back some enthusiasm for current housing market conditions. Moreover, builders will face competition from rising existing home inventory
in many markets as the mortgage rate lock-in effect softens with lower mortgage rates.”
“With inflation moderating, the Federal Reserve is expected to begin a cycle of monetary policy easing this week, which will produce downward pressure on mortgage interest rates and also lower the interest rates on land development and home construction business loans,” said NAHB Chief Economist Robert Dietz. “Lowering the cost of construction is critical to confront persistent challenges for housing affordability.”
The latest HMI survey also revealed that the share of builders cutting prices dropped in September for the first time since April, down one point to 32%. Moreover, the average price reduction was 5%, the first time it has been below 6% since July 2022. Meanwhile, the use of sales incentives fell to 61% in September, down from 64% in August.
Derived from a monthly survey that
Single-family starts up in August but supply side issues linger
Single-family starts posted a solid gain in August on robust demand and moderating mortgage rates even as builders continue to grapple with challenges related to lot and labor shortages and elevated prices for many building materials.
Overall housing starts increased 9.6% in August to a seasonally adjusted annual rate of 1.36 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
The August reading of 1.36 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 15.8% to a 992,000 seasonally adjusted annual rate. On a year-to-date basis, single-family starts are up 10.4%. The multifamily sector, which includes apartment buildings and condos, decreased 4.2% to an annualized 364,000 pace.
“Single-family starts were up in August as demand remains strong despite several
supply-side challenges,” said Carl Harris, NAHB chairman. “The rise in single-family construction mirrors an uptick in NAHB’s latest builder survey. However, builders continue to face a challenging environment due to rising construction costs.”
“With the Federal Reserve expected to
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 HMI indices were up in September. The index charting current sales conditions rose one point to 45, the component measuring sales expectations in the next six months increased four points to 53 and the gauge charting traffic of prospective buyers posted a two-point gain to 27.
Looking at the three-month moving averages for regional HMI scores, the Northeast fell three points to 49, the Midwest edged one-point higher to 40, the South decreased one point to 41 and the West increased two points to 39. n
begin the first of a series of rate reductions today, the loosening monetary policy over the coming months will boost new home building by lowering the construction loan rates for builders,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis. “The rise in single-family permits is further good news for the industry, which was hit hard by tight monetary policy in the first half of this year.”
On a regional and year-to-date basis, combined single-family and multifamily starts are 2.1% lower in the Northeast, 1.9% lower in the Midwest, 4.6% lower in the South and 4.4% lower in the West.
Overall permits increased 4.9% to a 1.48 million unit annualized rate in August. Single-family permits increased 2.8% to a 967,000 unit rate. Multifamily permits increased 9.2% to an annualized 508,000 pace.
Looking at regional data on a year-to-date basis, permits are 0.7% higher in the Northeast, 2.1% higher in the Midwest, 1.1% lower in the South and 6.2% lower in the West.
Single-family units under construction fell to a count of 642,000—down 5.2% compared to a year ago. The number of multifamily units under construction has fallen to 867,000 units. n
Most wanted window and door features
The latest NAHB study on home buyer preferences –What Home Buyers Really Want Study1 – asked consumers about the features and amenities they would want in a home, specifically regarding windows and exterior doors. Respondents were asked to rate eight window and four exterior door features using the following four-point scale:
l Do not want – not likely to buy a home with this design or feature.
l Indifferent – wouldn’t influence decision.
l Desirable – would be seriously influenced to purchase a home because this design or feature was included.
l Essential/Must have – unlikely to purchase a home without this design or feature.
Windows
ENERGY STAR rated windows were rated essential or desirable by 83% of home buyers, followed by triple-pane insulating glass (77%) and low e-insulating glass (67%). Since its introduction to the survey in 2007, ENERGY STAR rated windows have been wanted by at least 83% of home buyers (Figure 1). Additionally, ENERGY STAR windows were ranked the third most wanted feature out of the 200+ options asked within the survey.
Doors
All four exterior door features were rated essential or desirable by a majority of home buyers (>50%) with very little separating the highest (sliding patio doors at 64%) to the lowest (double main entry door at 58%) rated options.
Furthermore, all four exterior door features have increased in popularity compared to 2020, with double main entry door rising the most (10 percentage points) (Figure 2).
Like the other areas of the home covered in the study, every question on windows and doors is tabulated by the buyer’s income, age, geography, race, household type, and the price they expect to pay for the home. These details can be very useful in particular cases. The study discusses the three window features that appeal to older buyers, as well as how preferences for hinged/French patio doors change by income and home price. n
Builders Only Event - Non-builders must be an exhibitor or a sponsor to attends!
BUILDERS SHOW Exhibit Tent
The Builders Show exhibit tent will be located on the south side of the HBAMT building and measure 120 x 40 feet boasting space for forty-five (47) 10 x 5 feet exhibit spaces. DON’T MISS OUT ON THIS TERRIFIC OPPORTUNITY! Return your registration form to the HBAMT today to reserve your sponsorship! Exhibit spaces have SOLD OUT
Return your registration form to the HBAMT today! = 10’x5’
Tuesday, October 15th
Tuesday, May 11
I am registering as an: r EXHIBITOR - $595 per booth r SPONSOR - $550
Secure your spot today by returning the registration form provided below to the HBAMT today!
EXHIBITORS are provided exhibit space inside the exhibit tent. SPONSORS enjoy all the benefits of an exhibitor, including access to the tent, without being provided exhibit space in the tent. Your name: ______________________________________ Company: _______________________________________
x $595 = your total payment*: $____________ r *Register me for the Builders Raffle held during the event. I will pay an additional $50 entry raffle entry fee
SPONSORS: will be charged $550.
SPIKE REPORT
Nineteen 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 August 31, 2024.
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
Metro/Nashville Chapter details are currently being planned. Next meeting: to be announced. Topic: to be announced.
RSVP to: cnicley@hbamt.org
ROBERTSON COUNTY CHAPTER
Robertson County Chapter details are currently being planned.
Next meeting: to be announced.
RSVP to: cnicley@hbamt.org
SUMNER COUNTY CHAPTER
Chapter President - Joe Dalton
The Sumner County Chapter typically meets at the new Hendersonville Library. Future meetings to be announced.
Next meeting: to be announced.
RSVP to: cnicley@hbamt.org
WILLIAMSON COUNTY CHAPTER
Chapter President - Christina James Williamson County Chapter details are being planned. Next meeting: to be announced. RSVP to: cnicley@hbamt.org
WILSON COUNTY CHAPTER
Chapter President - Margaret Tolbert Next meeting: to be announced. Free with RSVP pending sponsorship. RSVP to: cnicley@hbamt.org
COUNCILS
HBAMT REMODELERS COUNCIL
The HBAMT Remodelers Council meets at varying locations throughout the year. 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 - Beth Lewis
The SMC typically meets on the first Thursday of the month. Next meeting: Thursday, October 3rd
Topic: "Housing Market Forecast and Update," with representatives from Zonda.
SMC Members Free thanks to Barlow Builders! Non-SMC members: $20 with RSVP; $25 w/o RSVP RSVP to: cnicley@hbamt.org
