Weekly Update: May 18, 2017

Mike Rowe Go Build Master A Trade

Mike Rowe Coming to Help Us with Building Trades

Yesterday, your HBAI Executive Committee approved a deposit ($90k) to help bring Mike Rowe to Central Iowa on September 28.  Stay tuned in for this awesome opportunity – we’re going to need your help attending or convincing your local school superintendents that we need to have every counselor and anyone involved in guiding students into our industry to attend.  More details soon!

HBAI Educational Corporation Scholarships – $14k Awarded!

We are excited to report that the following students were awarded scholarships from our HBAI Educational Corporation.  The fund is designed to help students entering the building trades.  As you plan your estate giving – legacy gifts are a great way to help with this endeavor.  Email HBAI Executive Officer Jay Iverson if you’d like to discuss how to make that happen.  Congratulations to the following:

 

$1,000 David Ealy Scholarship

Alec Brundell (Marion) – Hawkeye Community College

 

$1,000 Ken Selzer Scholarship

Kevin Buell (Iowa City) – Iowa State University

 

$1,000 Jeff Tegeler Scholarship

Tanner Iverson (Ankeny) – Des Moines Area Community College

 

$1,000 Charlie Wasker Scholarship

Drew Madden (Waukee) – University of Iowa

 

$1,000 Doug Mayo Scholarship

Michael Madden (Van Meter) – UNI

 

$1,000 John Small Scholarship

Michael Salazar (Alta) – NW Missouri State University

 

$1,000 Bob Friendrich Sr. Scholarship

Caleb Statler (Wellman) – University of Iowa

 

$1,000 Scholarships

Adam Byrne (Cedar Falls) – UNI

Audrey Hefel (Dubuque) – University of Michigan

Ben Lorenz (Johnston) – UNI

Abby Tornow (Washington) – Iowa State University

 

$750 Scholarships

Nicholas Herron (Rock Port, MO) – Iowa Western Community College

Cameron Madson (Ames) – University of Kansas

 

$500 Scholarships

Ross Hingst (Waukee) – Luther College

Brianne Messer (Solon) – Drake

Scott Sievert (St. Ansgar) – Central College

Aging-in-Place Modifications a Growing Trend

Remodelers are making more aging-in-place modifications to their projects and growing home owner awareness is contributing to the trend, according to a survey by NAHB Remodelers. The survey found that 80% of remodeling companies are doing aging-in-place projects, up from 68% in 2013.

Free Webinar on the 2018 IRC

States and jurisdictions across the country are making plans to adopt the 2018 International Residential Code (IRC) next year – and that means home builders in those markets need to be ready.  The webinar Significant Changes to the 2018 International Residential Code takes place from 2-3 p.m. ET on Thursday, May 25, and highlights the differences between the upcoming code and the 2015 version, including significant updates to energy-efficiency requirements.  Key issues covered during the presentation include:

  • Changes in seismic design categories
  • Provisions for king studs and “tall” studs
  • Attic insulation and “buried ducts”

Join speakers Gary Ehrlich and Dan Buuck, both members of the NAHB Construction, Codes and Standards staff, as they walk you through these changes.  Although this is a free webinar (thanks to the sponsorship of the International Code Council), you’ll still need to register to attend.

Gypsum at Top of Building Cost Increases

For the third straight month, prices of softwood lumber, gypsum, ready-mix concrete, and OSB all increased, according to the latest Producer Price Index (PPI) release by the Bureau of Labor Statistics.  Unlike March, when softwood lumber and OSB led price increases, gypsum topped the list in April with prices increasing 5.1%.

As expected, the price of softwood lumber increased again in April.  The 3.0% increase pushed the softwood lumber price index to its highest level in over a decade.  Prices have not been this high since September 2004-three years into the last lumber trade dispute between Canada and the United States.  The price of softwood lumber has increased 10.4% during the first four months of 2017 and is 13.4% higher than one year prior.

These increases have been largely, if not completely, due to the ongoing softwood lumber trade dispute between the U.S. and Canada. Although upward pressure has abated in recent weeks, the Random Lengths Framing Lumber Composite Index (below) has still risen more than 20% since January.

Exchange rates will gain attention should the dollar substantially falter.  A weaker dollar would exacerbate the price effect of tariffs by making Canadian lumber more expensive for U.S. buyers.  While the dollar is not quite as strong as it was at the beginning of the last trade dispute in 2001, it is historically strong nevertheless.

OSB prices posted a 4.4% increase in April and have increased more than 25% since April 2016. The price index for OSB-10.4% higher than it stood in January-stands at its highest level since June 2013.

The 5.1% increase in prices paid for gypsum products (seasonally adjusted) represents the largest monthly increase since April 2016 and the second-largest increase since January 2013.  Gypsum prices have risen 7% over the past year in contrast to the April, year-over-year increases of 2% in 2016 and 3% in 2015.  Ready-mix concrete prices rose by 0.9% on a seasonally adjusted basis in April, the largest monthly increase since June 2014.

The economy-wide PPI advanced 0.5% in April.  Nearly two-thirds of the increase is attributable to prices paid for services, which rose 0.4%. Prices for final demand goods also moved up 0.5%.  Final demand prices for core goods (i.e. goods excluding food and energy) continued the upward trend that began in November 2016, climbing 0.3%.  Prices for core goods less trade services climbed 0.7%.

Roughly 40% of the increase in prices paid for final demand goods was due to core goods, though final demand prices paid for food and energy rose 0.9% and 0.8%, respectively.  Over a quarter of the April advance in the index for final demand services was due a 6.6% increase in prices paid for securities brokerage, dealing, investment advice, and related services.

Historic Housing  

April housing starts were OK. Single family starts were up 8.8% Y-o-Y, 7.4% YTD, and, somewhat surprisingly, have been flat since 10/16. Importantly, trends have emerged. Comparing 15Q1 – peak house size – to today, median and average house sizes are down 130 and 108 square feet respectively. Starts in the South have returned to 1997 levels, in the West to 1992 levels. In the Northeast and Midwest, don’t ask.  Elliot F. Eisenberg, Ph.D.

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