Weekly Update: August 25, 2016


   HBAI Executive Officer Jay Iverson attended the American Society of Association Executives Annual Meeting last week with nearly 6,000 industry professionals.  Here is portion of our Iowa contingency during the trade show, gathering at the Des Moines Convention and Visitors Bureau booth.

Student Members

A new membership category designed to help HBAs retain their student members once they enter the job force was approved at the Mid-Year meetings.  The newly launched Alumni membership will allow students who were members of NAHB-affiliated student chapters to remain members of NAHB at a reduced rate for their first three years after graduation from a secondary or post-secondary school.

Those who graduate in December 2016 will be the first class of graduates eligible for this membership. Local and state associations are not required to establish an Alumni membership category, but if they do, $15 of the member’s annual dues payment is sent to the national office.

Alumni members may not serve on the NAHB Executive Committee or Board of Directors, but can serve in local leadership positions in accordance with that HBA’s bylaws – and enjoy all benefits that the already existing Affiliate membership includes.

Best in American Living Award Entries due September 1

Whether you are a talented builder, remodeler, architect, designer, developer, land planner or interior designer, if you’ve redefined design excellence for homes and communities, the 2016 NAHB Best in American Living Awards (BALA) are for you.  Don’t miss your chance to be recognized as one of the best in residential design. Winners will be announced at the gala held during the International Builders’ Show in Orlando.  Jim Sattler of Sattler Homes in Cedar Rapids won last year, so get your Iowa entries in.  Best in American Living Awards winners also receive year-long exposure through:

Be counted among the housing industry’s most creative thinkers-entering is easy, just go to  bestinamericanliving.com.  Fill in project and team information; review the photo and floor plan release information; Type up a design statement; List any noteworthy features you don’t want our judges to miss; Upload a floor plan, site plan and up to 10 photos with short captions and then hit “Submit!”

July New Home Sales Highest Since 2007

July new home sales recorded the strongest monthly pace since October 2007, growing to a 654,000 seasonally adjusted annual rate. According to estimates from the Census Bureau and Department of Housing and Urban Development, the elevated July rate marked a 12.4% gain over downwardly revised, but still strong, estimates for June.  On a year-to-date basis, new home sales have improved 12% over comparable 2015 totals.

Due to the increase in the sales pace, the inventory supply for the national market is thin. Total homes for sale fell to 233,000, only a 4.3 months’ supply, according to government estimates. Levels below a 5.5 month’ supply show a need for additional inventory, particularly given flat existing home inventory conditions have prevailed over the last four years.

Another noteworthy feature about inventory conditions is that a rising count of new home sales are coming from homes under construction or homes that have not yet begun construction. In fact, in July, only 30% of new home sales were completed, ready-to-occupy homes. And the inventory of such homes remains flat, despite rising demand. As of July, there were only 57,000 completed homes for sale nationwide.

However, in the face of increasing demand and sales, prices are moderating. This may mark a shift in the industry mix of homes, mirroring data we examined regarding the recent decline in new single-family home size. Median new home price fell to $294,600 in July, although median new home price has been approximately in the $290,000 to $310,000 range for most of 2016.

Overall, this was a positive report and consistent with ongoing, solid home builder confidence readings. We should not be surprised if the elevated sales pace estimated for July is revised down next month, but the 3-month moving average for new home sales rose to 603,000. This is consistent with a rising trend in sales in place since March.

And the thin inventory conditions point decidedly to the need for additional single-family homes on the market. This is consistent with the NAHB forecast of positive growth rates for single-family starts for the rest of the year and into 2017 and 2018.

Mortgage Minus  

In 16Q2, 12.1% of homes with a mortgage were underwater, down from 14.4% a year ago and down from the negative equity peak of an astonishing 31.4% in 12Q1. On average, 19.4% of homes valued in the bottom third of all homes are underwater, 10.6% in the middle third are and only 7.5% of homes in the top third are. No wonder there are few affordable homes for sale.  Elliot F. Eisenberg, Ph.D.

August is the Month for IBS in Orlando

We have an Iowa room block at the Rosen Centre Hotel in Orlando.  Hotels are filling up fast so book your room today to get the best rate. The room deposit won’t be charged until December so you have nothing to lose.  Just click the accommodation icon when you’re registering.

The best registration deals are happening now, so don’t miss your chance to save on the 2017 NAHB International Builders’ Show® (IBS). Whether you want to roam the show floor or participate in the business-building educational opportunities, register before August 31 to get the best value!  Plus you can register your spouse for free until September 1Click here to register.

Weekly Update: August 18, 2016

 Congratulations to our newest NAHB Life and Senior Life Directors (L to R) LaDonna Gratias (Des Moines) Senior Life; Willie Delfs (Sioux City) Life; and Dan Moos (Sioux City) Senior Life.  On the far right is Greg Ugalde, third vice president of NAHB from Connecticut.  Senior Life directors have attended NAHB Board of Director meetings for 20 years and Life is 10.

Congratulations to NE Iowa HBA – 18.52% Membership Increase

$1,500 Award from NAHB & $500 from HBAI

Congratulations to Bob Manning, executive officer of the NE Iowa HBA – a $1,500 winner in the NAHB spring membership drive with an 18.52% membership increase.  HBAI also provided a membership promotion to our local HBA’s and awarded $500 to the organization as well.  Make sure that your local is signed up for the fall campaign – details can be found here.

September Deadline Nears for Code Officials

NAHB Chairman Ed Brady is reminding your leadership about the important role all NAHB members play in keeping building and energy codes effective and affordable. Here is a list of the Iowa contactsthat need to be followed up with.  Here is a great video to explain – let’s watch:

August is the Month for IBS in Orlando

We have an Iowa room block at the Rosen Centre Hotel in Orlando.  Hotels are filling up fast so book your room today to get the best rate. The room deposit won’t be charged until December so you have nothing to lose.  Just click the accommodation icon when you’re registering.The best registration deals are happening now, so don’t miss your chance to save on the 2017 NAHB International Builders’ Show® (IBS). Whether you want to roam the show floor or participate in the business-building educational opportunities, register before August 31 to get the best value!  Plus you can register your spouse for free until September 1Click here to register.

Debt Will be a Factor

Household debt rose by $35 billion in Q2, led by a $32 billion rise in auto loans and a pleasant $17 billion jump in credit card balances. Student loan levels were unchanged and mortgage and HELOC debt declined by $7 billion each. Total household debt is now $400 below its 2008 peak and troughed in 2013, $1.5 trillion below its peak. The Household Debt/GDP ratio is 80% and slowly rising.

Iowa Fiscal Year 2017 Underway

Here is a note from House Majority Leader and HBAI office neighbor Chris Hagenow:  With the arrival of August also comes the end of the first month of our new state fiscal year which began on July 1, 2016. Compared to July of last year, General Fund revenue is down 3.8 percent, or $15.6 million. While that number does not necessarily paint an encouraging picture, much of the concern was due to the drop in sales tax revenue, which already bounced back the first few days of August. Many of Iowa’s businesses have a July 31 due date to pay sales tax to the state. Since July 31 fell on a weekend this year, businesses had until the next working day to pay that tax, which accounted for much of the drop.

Another area of concern was corporate tax collections, which were down $4.2 million, or 21.3 percent, from last year. While July is traditionally a slow month for corporate tax collections, this does cause some concern as the state Revenue Estimating Conference had previously projected a 3 percent growth for this category in FY 2017. On a more positive note, personal income tax collections grew 6.3 percent over last July, which is good considering May and June numbers were not nearly as strong.

While July’s revenue numbers show some mixed signals, more time is needed to get an accurate picture of what the year’s revenue growth will be. In previous years, July has not proven to be a very accurate predictor of what the fiscal year’s growth actually ends up looking like. Over the next few months, several economic factors both locally and on a larger scale will make an impact on the direction of the state’s revenue.

Thankfully, there is no need to panic. Situations like this remind us of the importance in responsible budgeting and ensuring our state government lives within its means. Had we not shown that discipline, there would be much more cause for concern. This is why House Republicans will continue our commitment to spending less than we take in and not using one-time money for ongoing needs.

The state is in a strong fiscal position, and our economy continues to grow. Enjoy these last few days of summer, enjoying everything that is great about Iowa.