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Posts Tagged ‘homebuilders’

4 Concerns of Homebuilders Have Impacting Every American

March 20th, 2018 Comments off

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PwC Partner Mitch Roschelle says that homebuilders’ optimism is retreating. Roschelle cites among the factors behind the decline – land, labor and lumber – which could affect every American who owns or rents a house.

 

You could add one more “L” to Roshelle’s list, LIBOR.

LIBOR is a benchmark rate, which some of the world’s leading banks charge each other for short-term loans. It stands for London Interbank Offered Rate, and serves as a first step to calculating interest rates on various loan products throughout the world.

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) tells MHProNews that their builder sentiment gauge fell to 70, the lowest reading since last November.

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Builders’ optimism continues to be fueled by growing consumer demand for housing and confidence in the market,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, LA. “However, builders are reporting challenges in finding buildable lots, which could limit their ability to meet this demand.”

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A strong labor market, rising incomes and a growing economy are boosting demand for homeownership even as interest rates rise,” said NAHB Chief Economist Robert Dietz to the Daily Business News. “With these economic fundamentals in place, the single-family sector should continue to make gains at a gradual pace in the months ahead.”

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Problems for Stick-Builders Could be Good News for Manufactured Housing…

Producers tell MHProNews that when components like steel, aluminum or lumber rise for conventional builders, even though it goes up for factory builders too, they increase is often less steep. Bulk purchase buying power is one reason for the advantage.

Less waste in the building process is another.

Manufactured housing sales have risen steadily since it hit its all-time low in 2009.

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In spite of the obvious price and other advantages that manufactured housing has over conventional builders, the industry has still lagged behind.

The causes for that lag have been explored in other reports, including the analysis sparked by the Urban Institute’s report on manufactured housing. ## (News, analysis, and commentary.)

Related:

Urban Institute Ask for Correction in Analysis of their Manufactured Housing Research, “Follow the Facts,” “Follow the Money”

HUD Comment Letter – FR-6075-N-01 Regulatory Review of Manufactured Housing Rules

Reaching for the Sky, Multiple Level HUD Code Manufactured Homes

First Things First in Manufactured Housing

(Third party images, and cites are provided under fair use guidelines.)

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New Home Sales in 2015 Expected to Increase and Focus on First-Time Homebuyers

January 23rd, 2015 Comments off

lennar-home-houston-2Observing trends and results in the sale of stick-and brick-homes can frequently give some clues as to what to expect in the coming year for all home sales including factory-built homes. The Wall Street Journal shares with MHProNews some observations and predictions they have made from analysis of fourth-quarter results from some of the nation’s largest home-builders. There is much emphasis placed on entry-level or first-time homebuyers.

  1. New home sales will make big strides in 2015.

Lennar, based in Miami, posted a heady gain of 22% for sales contracts signed in its fourth quarter ended Nov. 30, over the same period a year earlier. In addition, KB Homes posted a 10% increase in sales contracts for its fourth quarter.

According to the WSJ article, “This, along with results from other builders, has led economists to hope that sales of new homes will make big strides in 2015. Some have made bullish predictions for home construction. Part of that is based on the assumption that entry-level buyers will make a comeback.”

  1. Home prices are not escalating at a rapid rate.

WSJ cites that “Lennar’s average price on finalized deals increased by 7.2% to $329,000 in its fourth quarter compared with a year earlier. That’s a marked slowdown from the previous year when its average closing price increased by 17.6%.”

The article predicts that “A slowdown in new-home prices is welcome news for buyers, and price appreciation will slow as builders shift to constructing a larger number of less-expensive homes to cater to the entry-level market.” It is noted that many entry-level buyers have been sidelined in recent years by sluggish job growth, high home prices, student debt and stringent mortgage-qualification standards. “Now job growth has picked up and credit conditions are starting to ease. Lennar said Thursday it anticipates building more entry-level communities this year,” according to WSJ.

  1. Incentives Lure First-Time Buyers

Another factor that may influence first-time buyers is that Lennar and other builders are rolling out more promotions such as free upgrades and financial assistance with closing costs to spur sales.  WSJ observes that “such enticements, called incentives, tend to dent builders’ profitability, but they’re a boon for home buyers.”

Lennar’s incentives in its latest quarter marked a rare increase from a year earlier, amounting to $23,100 per home, or 6.6% of the builder’s home sales revenue. A year earlier, they were $20,600 per home, or 6.3%. Other builders, namely D.R. Horton, Inc., and KB Homes, also recently reported boosting their use of incentives.

Nationally, builders have been more likely to increase their use of incentives since mid- 2013 than earlier in the recovery, according to a monthly survey of 150 home-builder sales representatives conducted by Wells Fargo Securities. That eased a bit in the fourth quarter.

  1. Home sales still booming in Houston, the strongest U.S. market.

Economists, builders and investors have kept a close watch in recent months on home sales in Houston specifically, and Texas in general, concerned that the steep decline in oil prices will sap the strongest U.S. housing market.

However, builders such as KB Homes and Taylor Morrison Home Corporation say they haven’t seen a falloff in Houston yet.  However, Lennar said Thursday it has seen a slight impact in Houston, and that factored into its projections indicate that its gross margin will recede a bit this year.

We haven’t seen a significant change in that market condition,” said Lennar president Rick Beckwitt. “We’ve seen a little, at the higher end, of a pullback. We’ve anticipated…that there will be further reconciliation in that marketplace.”  ##

(Photo Credit: Lennar Homes)

Article Submitted by Sandra Lane to – Daily Business News- MHProNews.

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Champion Champions Detroit

July 11th, 2013 Comments off

Champion Homebuilders of Troy, Mich. has been selected to provide 36 modular homes as part of phase two of Detroit’s Penrose neighborhood rebuild. The initial 36 homes in the effort, orchestrated by developer Star Development Corp. of Ann Arbor, Mich., were also Champion products, as is Penrose Art Center, an art and community center in the neighborhood. Phase two is comprised of 14 single-family homes and 12 duplexes, all affordable rentals. As MHProNews has learned from prweb.com, the units are energy efficient and include appliances, vinyl double hung windows and Energy Star lighting. The single-family homes have either two or three bedrooms and 1,400 to 1,500 square feet. All the dwellings include a basement and single car garage, and are built in a style reminiscent of the turn of the original neighborhood. Said Penrose Architect, Steven Flum, “We worked closely with Champion and Star Development to ensure the new homes resembled the existing turn of the century style of the old neighborhood. We find it deeply gratifying to be part of a project of this caliber and to work with two companies that prioritize the needs of the neighborhood in conjunction with business goals.” The neighborhood has a strong focus on Detroit’s urban farming initiative in its attempt to restore a sense of community. Champion Homebuilders manufactures factory-built structures at 30 facilities in the U. S., Canada, and the United Kingdom.

(Image credit: Champion Homebuilders)

Half of Renters Want to Buy

March 12th, 2013 Comments off

HousingWire informs MHProNews, as the inventory of available homes continues to drop—Capital Economics says there are only 2.7 million units on the market, the sixth lowest in 30 years– homebuilders are patiently waiting for renters to transition into buyers. According to a survey by Opinion Research Corp. on behalf of Premier Property Management Group, 80 percent of renters are pleased with management, and in the case of single-family renters, are achieving some of the characteristics of home ownership. The survey also revealed 60 percent of single-family renters and 44 percent of apartment dwellers intend to buy within the next five years. Builders, in anticipation of future homes, are buying land, particularly in markets where credit is more readily available.

(Image credit: rent-direct)

Has Homebuilding Hit a Bump?

November 12th, 2012 Comments off

CNNMoney reports homebuilder D. R. Horton (DHI) missed revenue estimates in the third quarter 2012, but notched a profit that beat estimates. Meanwhile, Beazer Homes (BZH) exceeded its revenue expectations but its quarterly loss was more than anticipated, as it’s stock dropped nearly 14 percent. Horton’s shares fell 3.5 percent. The Standard & Poor’s Homebuilders ETF (exchange traded fund) was down nearly one percent for the day, continuing a slide from last week. As MHProNews has learned, many housing stocks have done well this year, but it may just be in anticipation of the worst being over.

(Image credit: Joshua Scott/CNNMoney)

Housing Recovery: Are the Trades Ready?

July 11th, 2012 Comments off

HousingWire says a report by the National Association of Home Builders (NAHB) reveals 40 percent of single-family homebuilders plan on hiring skilled workers within the next year, but 62 percent fear a shortage because so many have left the trades because of a lack of jobs. One study reports shortages of up to 20 percent in some skilled areas, and builders today are less likely to offer on-the-job training. However, Steve Martini, training director for the International Masonry Institute which trains bricklayers, says once housing picks up it will not be that difficult to locate the workers. “Our numbers of people to train are down because there just aren’t jobs for them to go to. We can gear up very rapidly to get those people trained, either starting from scratch or by upgrading skills,” he says. MHProNews.com has learned 46 percent of the builders in the Midwest and the West are poised to hire, as are 39 percent in the South and 29 percent in the Northeast.

(Image credit: HousingWire)

Deer Valley Re-Focuses

June 21st, 2012 Comments off

MarketWatch reports Deer Valley Corporation is restructuring key management personnel to focus on several opportunities the company wants to explore. Joel Logan, president and general manager of Deer Valley Homebuilders (DVHB), Inc., will become executive v.p. and COO (Chief Operating Officer) of the parent company with responsibility for new business development. He will consider new modular techniques and materials, the acquisition of other firms, and the development of a new product to re-start the Sulligent, Alabama facility. Chet Murphree, one of the founders of Deer Valley in 2004, will become v.p. of DVHB and replace Mr. Logan as G.M. MHProNews has learned he has many years experience in multi-plant operations.

(Image credit: Deer Valley Corporation)