The Nail, September 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.

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Fall Builders Show Exhibit Booths available

The HBAMT’s Fall Fest & Builders Show returns October 17th and space is quickly being reserved. Secure your booth or sponsorship now to participate.

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The 2023 James Hardie Golf Tournament!

The 2023 James Hardie Golf Tournament took place last month at the Towhee Golf Club in Columbia.

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September Calendar

20 Chapters and Councils

ON THE COVER:

HBAMT members enjoyed a great day on the course during the 2023 James Hardie Golf Tournament at the Towhee Club last month. See page twelve for more details.

New home sales increase in July despite higher mortgage rates

Low existing inventory and solid demand more than offset rising mortgage rates and elevated construction costs to boost new home sales last month.

Sales of newly built, single-family homes in July increased 4.4% to a 714,000 seasonally adjusted annual rate from a downwardly revised reading in June, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales in July was up 31.5% from a year ago.

“New home sales were solid in July because of an ongoing housing deficit in the U.S. and a lack of resales stemming from many home owners electing to stay put to preserve their low mortgage rates,” said Alicia Huey, chairman of the National Association of Home Builders (NAHB) and a custom home builder and developer from Birmingham, Ala. “But builders are still confronting many challenges, including rising mortgage rates, supply chain issues for electrical transformers, a dearth of skilled workers and elevated construction costs.”

“Despite this monthly uptick, new home sales will likely weaken in August as higher interest rates price out prospective buyers,” said NAHB Chief Economist Robert Dietz.

“Mortgage rates increased from 6.7% at the start of July to above 7% in August.”

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 July reading of 714,000 units is the number of homes that would sell if this pace continued for the next 12 months.

New single-family home inventory in July was 437,000, up 4.8% compared to a year ago. This represents a 7.3 months’ supply at the current building pace. A measure near a 6 months’ supply is considered balanced. Of the total home inventory, including both new and resale homes, 31% of homes available for sale are newly built.

The median new home sale price in July was $436,700, down roughly 9% compared to a year ago. Pricing is down both due to builder incentive use and a shift towards building slightly smaller homes.

Regionally, on a year-to-date basis, new home sales are up 5.0% in the Northeast, 1.0% in the Midwest and 3.5% in the South. New home sales are down 8.1% in the affordability-challenged West n

Single-family edge higher in July but rising rate concerns persist

Alack of existing inventory and solid demand helped offset rising mortgage rates and push single-family production higher in July, even as builders continue to grapple with elevated construction and financing costs as well as a lack of skilled labor.

Overall housing starts increased 3.9% in July to a seasonally adjusted annual rate of 1.45 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

The July reading of 1.45 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 6.7% to a 983,000 seasonally adjusted annual rate. Single-family starts are also 9.5% higher than a year ago. The multifamily sector, which includes apartment buildings and condos, decreased 1.7% to an annualized 469,000 pace.

“With many home owners choosing to stay in their existing home to preserve their

low mortgage rate, demand for new home construction pushed up single-family starts in July even as builders continue to struggle with increased uncertainty stemming from rising rates,” said Alicia Huey, NAHB chairman. “Builder sentiment has shown that higher mortgage rates are contributing to a decline in buyer traffic, and rates need to stabilize to prevent the housing market from slowing.”

“Total permits declined 13% compared to a year ago, indicating that builders are slowing construction activity as housing costs rise,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis. “In fact, multifamily permits

Builders confidence falls on rising mortgage rates

After steadily rising for seven consecutive months, builder confidence retreated in August as rising mortgage rates nearing 7% (per Freddie Mac) and stubbornly high shelter inflation have further eroded housing affordability and put a damper on consumer demand.

Builder confidence in the market for newly built single-family homes in August fell six points to 50, according to the NAHB/ Wells Fargo Housing Market Index (HMI) released recently.

“Rising mortgage rates and high construction costs stemming from a dearth of construction workers, a lack of buildable lots and ongoing shortages of distribution transformers put a chill on builder sentiment in August,” said NAHB Alicia Huey. “But while this latest confidence reading is a reminder that housing affordability is an ongoing challenge, demand for new construction continues to be supported by a lack of resale inventory, as many home owners elect to stay

put because they are locked in at a low mortgage rate.”

“Declining customer traffic is a reminder of the larger challenge that shelter inflation is up 7.7% from a year ago and accounted for a striking 90% of the July Consumer Price Index reading of 3.2%,” said NAHB Chief Economist Robert Dietz. “The best way to bring housing inflation down and ease the housing affordability crisis is to enact policies at all levels of government that will allow builders to construct more homes to address a nationwide shortfall of approximately 1.5 million housing units.”

The August HMI survey also revealed that rising mortgage rates are causing more builders to use sales incentives to attract home buyers. After dropping steadily for four months (from 31% in March to 22% in July), the share of builders cutting prices to bolster sales rose again to 25% in August. The average decline for builders reducing prices remained at 6%. And the share of builders using incentives to bolster sales was 55% in August, higher than

are at their lowest three-month moving average since December 2020, another sign that the market is cooling. In order to bring down shelter inflation, which accounted for 90% of the overall inflation rate last month, we need to enact policies that will allow builders to boost the nation’s housing supply.”

The number of single-family units under construction is down 16.9% compared to a year ago at 678,000. Meanwhile, the number of apartments under construction increased to 1 million, the highest total on record.

On a regional and year-to-date basis, combined single-family and multifamily starts are 17.6% lower in the Northeast, 13.8% lower in the Midwest, 9.4% lower in the South and 16.7% lower in the West.

Overall permits increased 0.1% to a 1.44 million unit annualized rate in July. Single-family permits increased 0.6% to a 930,000 unit rate. Single-family permits are also up 1.3% compared to a year ago. Multifamily permits decreased 1% to an annualized 512,000 pace, the lowest level since October 2020.

Looking at regional permit data on a year-todate basis, permits are 24.2% lower in the Northeast, 20.3% lower in the Midwest, 15.4% lower in the South and 21.6% lower in the West. n

in July (52%) but still lower than in December 2022 (62%).

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 declines in August. The HMI index gauging current sales conditions fell five points to 57, the component charting sales expectations in the next six months declined four points to 55 and the gauge measuring traffic of prospective buyers dropped six points to 34.

Looking at the three-month moving averages for regional HMI scores, the Northeast increased four points to 56, the Midwest and South were both unchanged at 45 and 58, respectively, and the West edged down a single point to 50. n

BUILDERS SHOW Exhibit Tent

DON’T MISS OUT ON THIS TERRIFIC OPPORTUNITY!

Return your registration form to the HBAMT today to reserve your space or sponsorship!

Exhibit spaces are limited to two per company.

Exhibit Space

= 10’x5’

Tuesday, October 17th

Tuesday, May 11

Secure your spot today by returning the registration form provided below to the HBAMT today!

I am registering as an: r EXHIBITOR - $595 per booth r SPONSOR - $550

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: _______________________________________

Cell: __________________ Email: ____________________

EXHIBITORS: Top 3 booth location preferences (not guaranteed): ________ ________ ________

Number of booths you’re purchasing (no more than two):

_______ x $595 = your total payment: $____________

SPONSORS: will be charged $550.

Credit Card ______________________________________

Credit Card # ______________________ Exp. __________

Credit Card V-Code _______________

The “v-code” is found on the back of the card, usually printed or embossed atop or near the signature strip. It is comprised of three digits found to the right of a longer number.

Signature ________________________________________

2023 FALL FEST BUILDERS SHOW EXHIBITORS/SPONSORS REGISTRATION FORM cnicley@hbamt.org

BUILDER

Cruise!

Join your fellow members in Paradise next year by taking part in the 2024 Membership Cruise Contest!

Recruit New Members and Win!

MEMBERSHIP CRUISE Contest RULES

Simply recruit EIGHT (8) New Members between NOW, and October 17th of 2023 and you can pack your bags for the association’s 2024 Caribbean Cruise!

Contact the HBAMT at cnicley@hbamt.org for details or to request digital applications.

James Hardie Golf Tournament 2023!

The James Hardie Golf Tournament was held Thursday, August 17 at the Towhee Club in Columbia, Tenn. Over 300 golfers competed in the event who competed in the event while enjoying food and beverage from a course filled with tournament sponsors.

The Woodridge Homes team earned first place honors during the morning round. The foursome included Ted Pratt, Josh Spradlin, Rob Humphreys, and Adam

Gardner. Second place was secured by the Contract Lumber foursome featuring Danny James, Taylor Phillips, Ed Winders, and Clint Mitchell.

The Hannah Custom Homes team took home first place honors during the afternoon round. The foursome featured Dusty Hannah, Justin Hampton, Jamie Perrish, and Clint Ing. The AMP foursome earned second place honors during the round whose team members included B.J. Francescon, Chris Francescon,

Brent Martin, and Bryant Hanfeldt.

The tournament’s hole competition winners included Mike Hardlow, “Closest to the Pin” on hole two: Bryan Seagraves, “Closest to the Hole” on hole ten; and John MacCauley, “Longest Drive” winner on hole eighteen.

A big thanks again to our title sponsor James Hardie Building Products and to all the tournament sponsors who are recognized on page sixteen n

Cambria

Bank OZK

American Heating and Cooling

Builders First Source

Cosentino

Hale Insurance

Greenrise Technologies

Kenny & Company

Ferguson

Carter Lumber

DR Horton Intex Contracting

Lennar

F & M Mortgage

The Deck Store Pulley & Associates / Delta Faucets

Jeffco Flooring

LP Building Solutions

RaganSmith

Force Roofing Systems

One Trust Home Loans

Goat Turf

Metro Granite, Marble & Quartz Parksite

Shawn F. Hood Design

Pulte Group

Vadara Quartz

Sherwin Williams

The Sealing Agents

Tolbert Marketing & Events

Thank you tournament sponsors!

James Hardie Building Productstitle sponsors

DR Horton - Lunch

Huskey Lumber - Breakfast

Platinum sponsors

Arcxis

Builders FirstSource

Dominion Siding

Ferguson

Generator SuperCenter of Nashville

Henley Supply

Intex Contracting

Kenny & Company

LP Building Solutions

Metro Carpets

RaganSmith

Sherwin-Williams

TrusJoist

US Lumber

Gold sponsors

American Heating & Cooling

Carter Lumber

Cosentino

Greenrise Technologies-Stormwater Com-

pliance

Hermitage

Jeffco Flooring & Supply

GAF

Lennar

PPG

Pulte Group TN

Shawn F Hood

Sealing Agents

Vadara Quartz

VaVia

Silver sponsors

AMP

Arnold Homes

Bank OZK

Cambria

Cosentino

Davidson Homes

F & M Mortgage

Force Roofing Systems

Goat Turf

Hale Insurance LLC

Marketing WorX LLC

Metro Granite Marble & Quartz

Moen

Mortgage Mike

Ole South

One Trust Home Loans

Parksite

Performance Point LLC

Pulley & Associates/Delta Faucets

RVI Building Specialists

Sims-Lohman

T-Square Engineering, Inc.

The Deck Store

TimberTown

Tolbert Marketing & Events

Vulcan Materials

WinSupply of Franklin

Hospitality sponsors

RW Supply + Design

EuroStone LLC

Eighteen 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 July 31, 2023.

SEPTEMBER CALENDAR

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. 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.

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.

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.

Next meeting: Thursday, September 14th.

Topic: “How AI and ChatGPT Can Benefit Your Business,” with Dr. Colby Jubenville, MTSU Professor and Business Coach.

Thursday, September 14th, 11:00 a.m. at Middle Tennessee Electric - 201 Maddox-Simpson Pkwy, Lebanon, TN 37090 FREE with RSVP thanks to United Communications!

RSVP REQUIRED! SPACE LIMITED!

RSVP to: cnicley@hbamt.org

COUNCILS

HBAMT REMODELERS COUNCIL

Council President - Eli Routh

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 - Kelvey Benward

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

Next meeting: Thursday, September 7th at the HBAMT.

Topic: “PPG’s Global Color Forecast featuring special guests from Haus of Black!”

Meeting sponsored by:

PPG Paints with special guests, Haus of Black

SMC Members Free w/RSVP thanks to PPG Paints!

Non-SMC members: $15 with RSVP; $20 w/o RSVP

RSVP REQUIRED DUE TO LIMITED SEATING

RSVP to: cnicley@hbamt.org