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Manufactured Housing Industry Facts, It’s About More, Per Economic Expert’s Insight

August 1st, 2018 Comments off
AffordableHomeOwnershipManufacturedHousingIndustryDailyBusinessnewsMHProNews550x315

The top right graphic is an example of a useful MHI data point. The “Wheat and Chaff” is the wise way to a approach any information source. Keep the good, reject what’s not.

There appears to be considerable confusion about a variety of facts regarding modern manufactured homes, as well as the manufactured housing industry. Why?  Let’s tee up this topic, before diving into this relevant research, and today’s timely fact check.

 

Accurate Information Matters

When reading mainstream media reports, or research being done by third-parties at non-profits, universities, etc., there are often modest to significant errors found about manufactured homes.

During live presentations, hundreds of industry professionals have been asked by our publisher a variation of this question. ‘Does misinformation about manufactured homes (MH) hurt our MH industry’s sales?

Routinely virtually every hand in the room will go up.

So, by an almost universal acceptance by those motivated enough to attend a seminar, accurate information about MH matters.

The reputation of the MH industry – and to an extent, its integrity – can be influenced by the accuracy of the data about manufactured homes.  Rephrased, inaccurate information logically hurts sales, and harms our industry’s image.

Before diving into the focus of this particular fact-correcting analysis, the Daily Business News will remind readers about this potent fact check about tornadoes.  If the general public realized that the odds of not dying during a tornado in 2017 were over 1 million to one in favor of the MH resident, wouldn’t people feel more confident about buying a manufactured home?  Just think, only 1 out of a million died during a tornado in 2017.

Per room after room of raised hands by industry professionals during live seminars, thousands of industry pros believe more of the public would by a manufactured home, based upon accurate information.

“Even When We Had a Hurricane, It Wasn’t This Bad,” Profitably Decoding Post-Windstorm, Survivor of Possible Tornadoes Statement, Impacting Manufactured Home Community, Manufactured Housing Industry

Nevertheless, to date, only MHProNews and MHLivingNews have routinely promoted that kind of data, which is based upon National Weather Service’s reporting.

CompareMobileHomeTrailersPastManufacturedHomesSaferMoreDurableQuoteScholasticiaGayCororationPhotoSmallPercentageDamagedDuringHUrricanesMHProNews

The good news is that some state associations and the NAR (see above) have started to address this, as the report linked above noted.

So, accurate information matters. It matters to:

  • Investors,
  • Bankers,
  • Public officials,
  • Professionals in or considering the manufactured home industry,
  • Affordable housing advocates,
  • Economists,
  • Media,
  • Policy makers, staffs, politicos,

and the public at large.  Accurate information is presumably why MHI wants members to fly-in once  a year to Washington, D.C.  and hand out information packages to staff and members of the House and Senate in the Congress.

 

Why Is There So Much Misinformation About Manufactured Housing?

What contributes to, or is the origin of, some of those factual questions and concerns from third parties?

Let’s note for accuracy and fairness that no one source is fully responsible, nor is any one professional exempt, from striving to learn and accurately share the facts about the modern manufactured home industry.  We value input from our readers, and when an error is spotted, we want to correct it.

Each person reading this is to some degree, is either part of the solution, or part of the problem. That’s reality.

The Daily Business News will look at what should be a simple issue, which regrettably is being mistakenly proclaimed in error to the public, policy makers, influencers, and the media.

Let’s look at a recent data-dispute, and the facts about manufactured housing’s contribution to the U.S. Gross Domestic Product (GDP).  The GDP of an industry helps others measure its significance.  The larger the GDP, the more important the industry.

The Manufactured Housing Institute (MHI) has said that manufactured housing’s contribution to the United States of America’s (USA) Gross Domestic Product (GDP) is “almost $3 Billion dollars.”

Others, depending on MHI’s data, then repeat that claim.

But is that MHI figure, previously disputed several times by MHProNews, accurate?

We asked the National Association of Realtors (NAR) Scholastica ‘Gay’ Cororaton, Certified Business Economist (CBE), to explain how GDP is calculated.

Does GDP use wholesale or retail sales figures?  Note, ICYMI, the report linked below reflects corrections made about manufactured housing by Cororaton in a NAR report.  She as an economist understands accuracy, and has made corrections as needed herself, and thanked those who helped with those corrections.

Realtor University, Journal for the Center of Real Estate Studies, Makes Corrections– “The Market for Manufactured Homes,” by Scholastica ‘Gay’ Cororaton, CBE

Here was her on-the-record reply was to MHProNews.

GDP is measured at the retail price because the retail price determines what  the FINAL user spends.  Not wholesale price because wholesalers still sell to retailers, who then sell to consumers (as the final users),” said economist Cororaton.

She added that “The final users can be consumers, businesses (for fixed investments and inventory), the government, and foreigners (exports).” What that means in part is the sale of FEMA units to the federal government is part of the GDP.

However, the price of imported goods are excluded (GDP is a measure of domestic production),” NAR’s Cororaton said.

ScholasticaGayDCororatonDBEResearchEconomistNationalAssociationRealtorsWashDCManufacturedHousingIndsutryDailyBusinessNewsMHProNews507

Composite information from LinkedIn.

She then pointed us to additional authoritative evidence, in the form of the Bureau of Economic Analysis (BEA).

The BEA recently provided MHProNews with the latest GDP data, cited by the Trump Administration in saying that the GDP in Q2 was up 4.1 percent. It doesn’t get more official than the BEA, does it? Cororaton emailed a BEA primer on the issue, available as a download, linked here.

MeasuringTheEconoimyBureauofEconomicAnalysisDailyBusinessNewsMHProNews

This is an authoritative reference on calculating GDP, per Certified Business Economist CBE, Scholastica ‘Gay’ Cororaton.. To download the report, click here.

 

MostMenAppearnNeverConsideredWhatHouseIsNeedlesslyPoorAllTheirLivesHenryDavidThoreauManufacturedHomeLivingNews

Many who first explore manufactured housing say or wonder, “this sounds too good to be true.’ Manufactured housing professionals must understand and anticipate that reality. Part of the secret is accurate information, not hyped or error plagued information. For newcomers to the website not familiar with modern manufactured homes, learn more by clicking the image above or the link here.

 

Why Does this Matter to MHVille? Just the Facts…

For some time, MHI has been publishing information that far undervalues the industry’s contribution to the GDP.

Using MHI’s own information, which has rounded up in some cases, the correct GDP – per the BEA’s and CBE Cororaton’s formulas – would be over $6.5 billion a year, not “almost $3 billion…”

 

GeneralINdustryProfileManufacturedHousingIndstiutteMHIDailyBusinessNewsMHProNews

This is “updated” in June 2018, but still has errors. Note, there are improvements from some prior fact-checks by MHProNews, but still several errors. How are third parties to know what is accurate about the MH Industry?

Not only is that a more accurate total, but isn’t $6.5 billion more than twice as impressive as “almost $3 billion” for the manufactured home industry?

Then why does MHI use an arguably flawed, and inaccurate total for the industry? Remember, MHProNews has published a higher, more accurate estimated GDP previously and brought that figure to MHI’s attention.

Now that an respected economist with NAR is confirming the correct formula, will MHI finally change that erroneous, embarrassing, and industry diminishing, claim? Will MHI check their math, and make the necessary corrections?

 

Only Two Possibilities

1)        MHI can ignore the error, as they have other mistakes and apparent spin or hypes about some of their claims (think S 2155, for a regulatory example). An example is the correct count on communities. Once more, it’s MHI’s own members, past and present, that have said their current manufactured home community count is too low.  Their June 2018 data, reflects a change that is still inaccurate.  Why?

Frank Rolfe, Dave Reynolds, George Allen, Manufactured Home Community Controversy Continues

 

Note that when we published that article linked above, MHI said that the count was “37,524 land lease communities.” In their June 2018 updated graphic, shown above, they now say almost 40,000.”  Why not make a more complete and accurate correction?

As a result of their ongoing unwillingness to correct such data points, not only media and researchers, but corporations have published incorrect information to potential investors.

So, based upon past experience, it is entirely possible that MHI will ignore the facts, and keep claiming a data point that’s debatably embarrassing to the industry. Or:

2) MHI can do what’s right, and make the correction, which is the minimum that they should do. But will MHI do as NAR’s Cororaton did, and credit the sources for the correction?

ScholasticaGayCororatonCBENARRevisionsRealtorUniversityDailyBusinessNewsMHProNews598x493

Accuracy matters, and giving credit to sources matters to third parties. “The time is always right to do the right thing.” – Martin Luther King, Jr.

Adults make mistakes.

But don’t mature adults admit error, make corrections, and then move on? What will MHI do? What will their action or inaction say about the organization? How will MHI’s actions reflect upon the industry?

Two state associations have broken ranks with MHI, over their stated concerns that MHI has failed to represent their interests.  More recently, they’ve launched a new national communities association (see related reports, linked further below).

State Associations, Companies Quit Membership in Manufactured Housing Institute, (MHI), One Explains in Writing, ‘Why?’

Why would MHI understate, after they’ve been informed previously about the error?  How can they claim it is accidental?  What other reason might make sense?  Could it be that they are trying to understate the industry’s size, to discourage new entries into the industry? Isn’t that similar to what MHI President, Richard ‘Dick’ Jennison did by understating the industry potential for more rapid growth? What CEO of a national association argues for slower growth? It sounds pretty to say ‘sustainable,’ but the industry sustained several times this sales level in the past. Who benefits from slow growth?  What normal non-profit organization rewards a CEO like that, with a bonus, contract extension and more pay?

 

A respected non-MHARR industry voice has challenged retailers to organize and leave MHI, similar to what communities are starting to do. He believes that the majors have “weaponized” certain aspects of national association’s work, using these words:

“…If retailers would bow up and tell the MHI manufacturers they want dues paid to a new association rather than MHI there will be change. I do believe the majors have weaponized regulation that further entrench their companies or widens and deepens their moat. Keep my name off it please but I’ll support the efforts if [there] is enough backbone out there.”

MHI members are encouraged to get MHI to change their incorrect reporting of data, just as they are encouraged to get them to be more transparent on other past errors.  See the Howard Walker related report, linked below.  Is there any excuse for repeatedly making the same mistakes?  “We Provide, You Decide.” © ##(News, analysis, and commentary.)

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Related Reports:

New Manufactured Home Industry National Association Related Statements

Howard Walker, Mensch – Equity LifeStyle Properties (ELS), Manufactured Homes Retrospective

‘Tip of Iceberg’ – Rick Rand; Marty Lavin, Communities have ‘No Confidence’ in Manufactured Housing Institute, New National Trade Group Announced

“Starting” Dip in Home Sales, New Crisis Says Housing Experts

March 1st, 2018 Comments off

AdamDeSanctisLawrenceYunNationalAssocRealtorsNARYouTubeDailyBusinessNewsMHProNews546x431

Washington, D.C. The economy and job growth are strong, says Adam DeSanctis, with the National Association of Realtors ® (NAR) communications team.

 

So why did contract signings for new homes take a “startling” dip in January?

There’s

  • bad news for many Americans,
  • potentially hopeful news for opportunities for the manufactured home industry’s investors and professionals,
  • and then head scratching issues in HUD Code manufactured housing that the NAR report directly and indirectly raises.

After seeing a modest three-month rise in activity, pending home sales cooled considerably in January to their lowest level in over three years, according to the National Association of Realtors®. All major regions experienced monthly and annual declines in contract signings last month,” said the NAR in a media statement.

The Pending Home Sales Index ® is a forward-looking indicator based on contract signings.

It fell 4.7 percent to 104.6 in January from a downwardly revised 109.8 in December 2017.

After last month’s retreat, the index is now 3.8 percent below a year ago and at its lowest level since October 2014 (104.1).

Lawrence Yun, NAR chief economist, says pending sales took a noticeable step back to start 2018.

The economy is in great shape, most local job markets are very strong and incomes are slowly rising, but there’s little doubt last month’s retreat in contract signings occurred because of woefully low supply levels and the sudden increase in mortgage rates,” Yun said.

The lower end of the market continues to feel the brunt of these supply and affordability impediments. With the cost of buying a home getting more expensive and not enough inventory, some prospective buyers are either waiting until listings increase come spring or now having to delay their search entirely to save up for a larger down payment, stated Yun.

This is one of several areas that manufactured housing could be providing a much needed boost for the overall housing market.

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HUD’s regulatory review could lead to solutions, if the agency dig deeply into the issues that are holding the industry back from being able to meet the needs that Yun’s research – and that of other housing experts – reveals. http://www.mhpronews.com/blogs/daily-business-news/hud-reg-review-could-yield-housing-econ-boom-plus-mh-market-update/

But arguably,

  • controversies surrounding the Manufactured Housing Institute (MHI) and some of their major players,
  • plus over a decade of improper actions at the Department of Housing and Urban Development (HUD),
  • and other interrelated issues has yielded a negative storm that harms the interests of millions of Americans,
  • while also acting as a limiting factor for many in the manufactured home industry.

Warren Buffett’s Annual Report to Berkshire Hathaway Shareholders, Clayton Homes and Manufactured Housing

Added Yun, “Even though contract signings were down, Realtors® indicated that buyer traffic in most areas was up January compared to a year ago1. The exception was likely in the Northeast, where the frigid cold snap the first two weeks of the month may have contributed some to the region’s large decline.”

The number of available listings at the end of January was at an all-time low for the month and a startling 9.5 percent below a year ago, says NAR.

In addition to new home construction making progress closer to its historical annual average of 1.5 million starts,

As new multi-family supply catches up with demand and slows rents, some large investors may begin putting their holdings of affordable single-family homes up for sale, which would be great news, particularly for first-time buyers,” said Yun.

LawrenceYunNARShort8.3MillionHousingUnitsRisingRentsHousingPricesCuredOnlyByMoreBuilding

In 2018, Yun forecasts for existing-home sales to be around 5.50 million – roughly unchanged from 2017 (5.51 million). The national median existing-home price this year is expected to increase around 2.7 percent. In 2017, existing sales increased 1.1 percent and prices rose 5.8 percent.

Note that the NAR video has related information, but the quotes above are not in the video.

If these underlying issues aren’t addressed, doesn’t the Obama era data – linked below – indicate the economic harm caused, and perhaps reflect a potentially avoidably economic stall?

YIMBY vs. NIMBY, Obama Admin Concept Could Unlock $1.95 Trillion Annually, HUD & MH Impact

 

Manufactured Housing and the NAR Data, What Does it Mean?

The issues raised by the NAR’s experts point to concerns that MHProNews has raised for years, and with increased intensity in roughly the past 18 months.

When manufactured housing has the advantage of the enhanced preemption called for by the HUD Code, why are MHI and some key larger players delaying a meaningful public and media engagement effort that would allow the current products of manufactured home producers to be better understood, and thus more widely embraced?

Is it incompetence, or some other agenda?

While everyone makes mistakes, no one is accusing MHI’s top staff or leaders to be fools.

So rule incompetence out.

Manufactured Housing Institute (MHI) Gives Written Responses – “Part of a Rigged, Corrupt System”

Therefore, when HUD Code manufactured home sales are already being made – albeit at relatively modest levels – to the kinds of buyers that would seek a site-built home, why has MHI foot dragged and failed to take robust steps, which their budget makes possible?

Last year at Tunica, manufactured home lender Credit Human’s long-time industry veteran, Barry Noffsinger laid out the case for how some professionals are already selling homes to those who might otherwise buy a conventional house.

Related at this link.

Meanwhile, the Manufactured Housing Association for Regulatory Reform (MHARR) and others in the industry – including MHI members – share insights with MHProNews that MHI routinely ducks out on responding to; why?  If there is nothing for MHI’s leadership to hide from, why do they duck pro-industry, pro-growth, pro-consumer trade media questions?

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Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.

 

 

 

 

Home Sales slide in December, But Rose Overall in 2017, Import for Manufactured Housing

January 24th, 2018 Comments off

DecemberHousingSnapshotNARGraphicDailyBusinessNewsMHProNews525

While conventional housing remains hot, the statistics that follow continue to spell “opportunity” for visionary, and long-term thinkers in manufactured housing.

 

Existing-home sales [EHS] subsided in most of the country in December, but 2017 as a whole edged up 1.1 percent and ended up being the best year for sales in 11 years,” according to the National Association of Realtors® (NAR).

Total existing-home sales…which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 1.1 percent in 2017 to a 5.51 million sales pace and surpassed 2016 (5.45 million) as the highest since 2006 (6.48 million),” the NAR said in a release to the Daily Business News.

 

2017-12-ehs-ExistingHomeSaleshousingNationalAssocRealtorsNAR-snapshot-infographic-01-24-2018DailyBuisnessNewsMHProNews600

 

In December, existing-home sales slipped 3.6 percent to a seasonally adjusted annual rate of 5.57 million from a downwardly revised 5.78 million in November. After last month’s decline, sales are still 1.1 percent above a year ago.”

LawrenceYunNARShort8.3MillionHousingUnitsRisingRentsHousingPricesCuredOnlyByMoreBuilding

The quotes above are from the special Daily Business News report, linked below.

NAR’s Yun – No Quick Fixes Spell$ Manufactured Housing Opportunitie$

Lawrence Yun, NAR chief economist, said the housing market performed remarkably well for the U.S. economy in 2017, with substantial wealth gains for homeowners and historically low distressed property sales.

Existing sales concluded the year on a softer note, but they were guided higher these last 12 months by a multi-year streak of exceptional job growth, which ignited buyer demand,” said Yun. “At the same time, market conditions were far from perfect. New listings struggled to keep up with what was sold very quickly, and buying became less affordable in a large swath of the country. These two factors ultimately muted what should have been a stronger sales pace.”

Added Yun, “Closings scaled back in most areas last month for this same reason. Affordability pressures persisted, and the pool of interested buyers at the end of the year significantly outweighed what was available for sale.”

 

ExistingHomeSalesEHSNationalAssocRealtorsNARDailyBuisnessNewsMHProNews

 

The median existing-home price for all housing types [not including manufactured housing] in December was $246,800, up 5.8 percent from December 2016 ($233,300). December’s price increase marks the 70th straight month of year-over-year gains.

Total housing inventory at the end of December dropped 11.4 percent to 1.48 million existing homes available for sale, and is now 10.3 percent lower than a year ago (1.65 million) and has fallen year-over-year for 31 consecutive months. Unsold inventory is at a 3.2-month supply at the current sales pace, which is down from 3.6 months a year ago and is the lowest level since NAR began tracking in 1999.

Those boosts in home values could be significant for those who are selling manufactured homes to retirees or other ‘downsizers.’

The lack of supply over the past year has been eye-opening and is why, even with strong job creation pushing wages higher, home price gains – at 5.8 percent nationally in 2017 – doubled the pace of income growth and were even swifter in several markets,” said Yun.

First-time buyers were 32 percent of sales in December, which is up from 29 percent in November and unchanged from a year ago.

U.S. Association, Plus Canadian-Owned U.S. based MH Lender Release Video, Facts on Modern Manufactured Homes and MH Homebuyers

With the typical manufactured home price hovering around $70,000, the opportunities for manufactured housing pros are strong.

KYPs, and the $64 Billion Dollar Question-Monday Morning Manufactured Housing Sale$ Meeting

But there is a clear need to tap into the kinds of strategies that will attract and ‘convert’ conventional housing shoppers into manufactured home buyers.  ## (News, analysis, and commentary.)

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SoheylaKovachManufacturedHomeLivingNewsManufacturedHousingIndustryDailyBusinessNewsMHProNews-Submitted by Soheyla Kovach to the Daily Business News for MHProNews.com.

Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.

As Site-Built Housing Market Drifts, Huge Opportunity for MH Rises

May 25th, 2017 Comments off
housingstartsseebiggestgainsintenyearscreditmenofvalue-postedtothedailybusinessnewsmhpronewsmhlivingnews

A site built home in progress. The segment is struggling with cost, demand and time. Credit: Men of Value.

New data from the National Association of Realtors (NAR) shows more proof that the manufactured housing industry stands at the cusp of significant opportunity.

According to HousingWire, existing homes stayed on the market for less time in April than in any month since 2011, but tight inventory drove a decline in existing home sales over March’s record pace.

 

Demand from buyers is still far exceeding the available supply, leading to both the decline in existing home sales and the fact that homes are flying off the market,” said Lawrence Yun, NAR’s chief economist.

USExistingHomesSalesReachHighestLevelinNineYearscreditTheBusinessJournals-postedtothedailybusinessnewsmhpronewsmhlivingnews

Lawrence Yun. Credit: The Business Journals.

The NAR report also shows that homes typically stayed on the market in April for a new record low of 29 days, down from 34 days in March and 39 days in April 2016.

April marks the first time since NAR tracking the time that a home stays on market that the time on market has been less than 30 days. Also of note, 52 percent of homes sold in the month of April were on the market for less than a month, a new high.

Total existing-home sales, which are classified as completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 2.3 percent to a seasonally adjusted annual rate of 5.57 million in April from a downwardly revised 5.7 million in March.

Last month’s dip in closings was somewhat expected given that there was such a strong sales increase in March at 4.2 percent, and new and existing inventory is not keeping up with the fast pace homes are coming off the market,” said Yun.

Demand is easily outstripping supply in most of the country and it’s stymieing many prospective buyers from finding a home to purchase.”

Yun also shared that that the median existing-home price for all housing types in April was $244,800, up 6% percent from April 2016 ($230,900), and that every major region, minus the Midwest, saw a decline in existing sales.

ManufacturedHousingHighlyEffectiveUrbanInfillcreditCandysDirt-postedtothedailybusinessnewsmhpronewsmhlivingnews

The inside of a Fourleaf Properties manufactured home in Dallas, Texas. Credit: Candy’s Dirt.

Realtors continue to voice the frustration their clients are experiencing because of the insufficient number of homes for sale,” said Yun.

Homes in the lower- and mid-market price range are hard to find in most markets, and when one is listed for sale, interest is immediate and multiple offers are nudging the eventual sales prices higher.”

 

Door Wide Open for Manufactured Housing Industry

The challenges referenced by Yun show a site built housing market that is, by all accounts, upside down. Demand for affordable housing is outstripping supply, keeping those who would otherwise be able to realize the dream of home ownership from doing so.

StanPoseySunshineHomesRedBayAL-postedDailyBusinessNewsMHProNews

Stan Posey, Sales Manager, Sunshine Homes.

When the National Association of Realtors chief economist says there are more buyers than existing homes available on the market, that should be a huge signal to manufactured and modular home professionals,” said Stan Posey, sales manager at Sunshine Homes of Red Bay, AL.

We build residential style homes that target the site-built customer,” Posey said. “Some of our retailers and communities are doing very well by targeting the site-built customer.”

StanDyeStarHomesCullmanALSunshineHomesRetailerPostedDailyBusinessNewsManufacturedHomeIndustryMHProNews

Stan Dye, Star Homes, Cullman AL. Photo credit, still from Inside MH Road Show video.

For example,” Posey said, “our award-winning retailer, Stan Dye at Star Homes in Cullman, AL told Inside MH recently that about 70% of their buyers first owned a conventional stick-built house.”

Regular MHLivingNews readers and viewers discover that when home shoppers give a good, careful look at today’s residential style manufactured and modular homes, many are saying ‘yes.’

With interest rates rising, and more cities considering or being urged to accept manufactured homes as infill, the manufactured home industry’s opportunities are rising.

This is particularly true with the ‘residential side’ of the industry: homes boasting finished tape and textured models, and other conventional-housing style amenities.

SunshineHomesRedBayALModelHomeExteriorPostedManufacturedHomeDailyBusinessnewsMHProNews

From Sunshine Homes website, provided under fair use guidelines.

Stan Dye told the Inside MH Road Show that residential style homes have a stronger appeal to the site-built buyer, as opposed to the “shade and shelter” or entry-level manufactured housing – that may use vinyl over gypsum (VOG) or painted, but untextured drywall – along with less costly fixtures and finishes.

As the Daily Business News has covered, the Manufactured Housing Association for Regulatory Reform has made similar points, and is calling for a full implementation of the law – notably the Manufactured Housing Improvement Act of 2000 (MHIA 2000) – as a key way to fuel more industry sales to meet the demands of an affordable home-hungry public. ##

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rcwilliams-writer75x75manufacturedhousingindustrymhpronews

RC Williams, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

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Housing Starts Fall, Bottleneck to Economic Recovery-Manufactured Housing to the Rescue?

May 17th, 2017 Comments off
HousingStartsFallBottlenecktoEconomicRecoveryManufacturedHousingtotheRescuecreditTheEconomist-postedtothedailybusinessnewsmhpronewsmhlivingnews

Is the bottleneck bubbling just under the surface? Credit: The Economist.

New U.S. homebuilding numbers showed an unexpected drop in the month of April, dropping to their lowest level in the last five months.

According to Newsmax, persistent weakness in the construction of multi-family housing units, could suggest a slowdown in the housing market recovery.

The Commerce Department said that housing starts dropped 2.6 percent to a seasonally adjusted annual rate of 1.17 million units. April’s results follow a downwardly revised rate of 1.20 million units in March.

The single-family homebuilding market rose 0.4 percent to a pace of 835,000 units.

By region, single-family starts grew 19.4 percent in the Midwest and 9.1 percent in the West, while they fell 3.4 percent in the South and tumbled 29.2 percent in the Northeast.

Economists polled by Reuters believe that homebuilders are failing to take advantage of a chronic shortage of properties for sale amid complaints about expensive building materials and shortages of lots and labor.

Analysts also believe weather was a factor.

bmocapitalmarketslogo-postedmanufacturedhousingindustrymanufacturedhomecommunitiesdailybusinessnewsmhpronews

Credit: BMO Capital Markets.

Some of the drop in starts could be weather-related – parts of the United States experienced snowstorms in March and heavy rains in April,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto.

So Mother Nature had a hand in this. Looking ahead, there is room for growth.

National Association of Realtors chief economist Lawrence Yun sees the problems lasting longer.

USExistingHomesSalesReachHighestLevelinNineYearscreditTheBusinessJournals-postedtothedailybusinessnewsmhpronewsmhlivingnews

Lawrence Yun. Credit: The Business Journals.

With housing starts declining in April, inventory shortages will continue for a longer period of time,” said Yun.

The intensifying housing shortage will push up home prices and rents, and easily above wage growth and the broad consumer price inflation. This continued, slow pace of construction of new homes is a major bottleneck to a faster economic and housing recovery.”

According to HousingWire, experts were not expecting the decrease in starts this month, and were actually waiting for an increase after the decline in March.

HousingStartsFallBottlenecktoEconomicRecoveryManufacturedHousingtotheRescuecreditFirstAmerican-postedtothedailybusinessnewsmhpronewsmhlivingnews

Credit: First American.

The lack of inventory of homes for sale is one of the most pressing challenges in the housing market today, and new homes are the source of supply that increases the total stock of housing to meet our nation’s growing demand,” said First American Financial chief economist Mark Fleming.

 

 

Manufactured Housing: The Answer, Hiding in Plain Sight 

The Daily Business News has covered the labor shortage in home construction extensively, and continues to show evidence that manufactured housing is a practical and affordable solution to provide quality homes at a competitive price.

And, even though manufactured and modular homebuilders can also feel the “pinch” at times, one of the numerous advantages of factory building is the ability to recruit and train team members who can work effectively in a production center environment.

JohnBostickSunshineHomesRedBayALmanufacturedHomeLivingNews-MHProNews-

John Bostick, president, Sunshine Homes, Red Bay, AL.

As John Bostick, owner and president of Sunshine Homes said in an interview this summer, “We have an almost unlimited capacity” to expand production.

For more on manufactured housing being the solution that’s hiding in plain sight, see MHProNews  and MHLivingNews Publisher L.A. “Tony” Kovach’s insight into the opportunity linked here. ##

 

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RC Williams, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

 

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New Data from NAHB on Cash Sales for Homes

May 5th, 2017 Comments off
NewDatafromNAHBonCashSalesforHomescreditNAHBMPAMagMarletteHomes-postedtothedailybusinessnewsmhpronewsmhlivingnews

Manufactured Housing: a “front and center” solution. Credits: NAHB, MPA Mag, Marlette Homes.

New information from the National Association of Home Builders (NAHB) shows an interesting dynamic taking place with cash sales for homes.

According to MPA Page, NAHB’s analysis of recent census date showed that cash sales accounted for only 4.7 percent of new home sales, down from a peak of 9.5 percent in Q4 of 2014. The marks the lowest level since 2010.

By comparison, conventional mortgages were the dominant financing source for new home sales, coming in at 72.5 percent, the second-highest share since Q4 of 2014.

In an interesting note, the National Association of Realtors (NAR) noted that, despite the small percentage of cash finances in new home sales, a large share of existing homes are sold for cash.

In February 2017, cash sales made up 27 percent of existing home sales – the highest level since November of 2015.

NewDatafromNAHBonCashSalesforHomescreditBuyingBedfordRealEstate-postedtothedailybusinessnewsmhpronewsmhlivingnews

Credit: Buying Bedford Real Estate.

Other data from the NAHB report showed that FHA loans placed second behind conventional loans at 14.8 percent, followed by VA-backed home sales with 8.1 percent.

In the period between the 2001 financial crisis and the recession in 2008, VA loans averaged just 2.9 percent, but increased significantly to 9.3 percent on average after the recession in 2009.

 

Opportunities for Manufactured Housing Abound

solutionusaffordablehousingcrisishidingplainsight-mhlivingnews-billmatchneertonykovach-posteddailybusinessnewsmhpronews

Credit: MHLivingNews.

As the Daily Business News has reported prior, the traditional housing sector remains constrained by a dearth of properties available for sale.

Builders have cited a range of problems including shortages of labor and land as well as rising material prices. A recent survey showed that homebuilder confidence slipped in April from a near 12-year high in March.

The Daily Business NewsMHProNews and MHLivingNews continue to make the case for manufactured housing as a viable solution to hope for the American Dream of home ownership at a reasonable price extensively, including Bloomberg making a statement to the same effect.

The myths, and the facts surrounding manufactured housing abound. To learn more, including why manufactured housing is the solution hiding in plain sight for many to achieve the American Dream, click here. ##

 

(Image credits are as shown above, and when provided by third parties, are shared under fair use guidelines.)

 

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RC Williams, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

Moves In U.S. Home Price Index

April 3rd, 2017 Comments off
HomeSalesPricesExpectedtoRisecreditNAR-postedtothedailybusinessnewsmhpronewsmhlivingnews

NAR headquarters, Washington, D.C. Credit: NAR.

New data from Case-Shiller shows that January home prices rose at the fastest rate since 2014. While this spells a win for sellers, it could eventually affect buyer demand.

According to the Wall Street Journal, home prices rose 5.9 percent in the 12 months ended in January, the strongest increase in 31 months, up from a 5.7 percent year-over-year increase reported in December.

The strong growth in prices poses a challenge for first-time buyers trying to get into the market this year.

This spring market looks to be heated. There are a far larger number of buyers chasing after fewer inventories, said Lawrence Yun, chief economist at the National Association of Realtors.

lawrence_yun,_nar_chief_economist=realtor-mag-realtor-org-

Lawrence Yun. Credit: NAR.

Prices are easily outpacing people’s income growth” which is causing “consternation for renters who are trying to get into the homeownership market.

The markets with the most activity were in the northwest, with Seattle seeing an 11.3 percent increase, with Portland showing a 9.7 percent year-over-year gain and Denver with a 9.2 percent increase.

In September, home prices hit a new record high, driven by strong demand and a shortage of available homes. The number of homes for sale was down 7.1 percent in January compared with a year earlier.

Tight supplies and rising prices may be deterring some people from trading up to a larger house and also shrinking the number of households that can afford to buy at current price levels,” said David Blitzer, managing director at S&P Dow Jones Indices.

At some point, this process will force prices to level off and decline — however we don’t appear to be there yet.

In month-over-month numbers, the U.S. index rose 0.2 percent in January, while the 10-city average rose 0.3 percent and the 20-city average rose 0.2 percent.

Purchases of previously owned homes were down in both January and February, with tight inventory and rising prices frustrating would-be buyers. Existing homes sells declined 3.7% in February. ##

 

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RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

Economic, Financial Optimism Surges – Trump Effect?

March 17th, 2017 Comments off
HomeSalesPricesExpectedtoRisecreditNAR-postedtothedailybusinessnewsmhpronewsmhlivingnews

NAR headquarters, Washington, D.C. Credit: NAR.

A new survey from the National Association of Realtors (NAR) shows that a combination of job gains and economic optimism are igniting consumer confidence across the country, particularly in rural and middle America.

The ongoing quarterly Housing Opportunities and Market Experience (HOME) survey from the NAR asked respondents about their confidence in the U.S. economy and various questions about their housing expectations.

According to the survey, during the first three months of this year, the share of households who believe that the economy is improving jumped to it’s highest level in the survey’s history at 62 percent, up from 54 percent last quarter and 48 percent one year ago.

Credit: NAR.

In a reversal from previous quarters, the surge in positive sentiment about the economy comes primarily from respondents living in the Midwest, 67 percent versus 51 percent last quarter, and rural areas, 63 percent versus 43 percent last quarter.

USExistingHomesSalesReachHighestLevelinNineYearscreditTheBusinessJournals-postedtothedailybusinessnewsmhpronewsmhlivingnews

Lawrence Yun. Credit: The Business Journals.

Confidence levels generally rise after a presidential election as the nation hopes for the best. Even though it is a highly polarized country, consumers for the most part have upbeat feelings about the economy right now,” said NAR Chief Economist Lawrence Yun.

Stronger business and consumer morale typically lead to even more hiring and spending, which in turn encourages more households to make big decisions like buying a home. These positive developments would be especially good news for prospective homebuyers in the more affordable Midwest region.

Increased confidence in the economy is also translating to improved feelings about financial situations at home.

EconomicFinancialOptimismSurgesTrumpEffectcreditNAR2-postedtothedailybusinessnewsmhpronewsmhlivingnews

Credit: NAR.

The Monthly Personal Financial Outlook Index indicated respondents’ confidence in their financial situation will be better in six months, jumping to its highest reading in the history of the survey as well, climbing to 62.6 in March from 59.8 in December 2016. The index was 58.1 one year ago.

 

The Trump Effect

SunsettoSunriseObamaLookstoSolidifyLegacyWhileTrumpTakesActioncreditCBSNews-postedtothedailybusinessnewsmhpronewsmhlivingnews

Donald Trump with Softbank CEO Masayoshi Son. Credit: CBS News.

As Daily Business News readers are already aware, the election of President Donald Trump has provided a spark to the U.S. economy, including small business optimism being at the highest level in 37 years.

In recent commentary to MHProNews on Gallup’s U.S. Economic Confidence Index, author David Horowitz laid out the potential impacts for the Trump Effect and how it differs from the Obama Administration.

EconomicConfidenceIndexHitNewHightheTrumpEffectcreditFrontpageMag-postedtothedailybusinessnewsmhpronewsmhlivingnews

David Horowitz. Credit: Frontpage Mag.

While his first few weeks have certainly been volatile and controversial, Trump will be a demanding leader who applies the best of his negotiating skills to push for U.S. growth,” said Horowitz.

Trump won’t be an ideological purist like Republicans who support free trade but don’t fight for fair trade.

Horowitz also had strong words about President Trump’s predecessor.

We’ve had an anti-business president now for eight years who doesn’t take a hard-nosed attitude towards these deals. Trump is going to get better deals for us, which is still free trade.

Trump will also lead the way in making infrastructure spending to boost the U.S. economy,” said Horowitz.

If the economy grows as it will under Trump, there’s going to be a lot more money to spend.

For more from Horowitz and the impact of President Donald Trump on the economy, click here. ##

(Image credits are as shown above.)

 

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RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

Who is Choosing Homeownership?

March 9th, 2017 Comments off
WhoisChoosingHomeownershipcreditTawbaWare-postedtothedailybusinessnewsmhpronewsmhlivingnews

NAR headquarters. Credit: TawbaWare.

A new survey from the National Association of Realtors (NAR), shows some rather interesting statistics, and opportunities for the manufactured housing industry.

According to Furniture Today, the 132-question survey, as a part of the 2017 Home Buyer and Seller Generational Trends study, showed that “Generation X” households are buying more homes, a growing number of Millennial and younger Baby Boomer households have children living at home, and more Millennials are buying outside of the city.

The study showed that an improving economy, multiple years of strong job growth and a notable increase in home values fueled a greater share of purchases from Generation X households over the past year.

Lost in this discussion are the numerous Generation X households who bought their first home, started a family and entered the middle part of their careers only to be rattled by job losses, falling home values and overall economic uncertainty during and after the Great Recession,” said Lawrence Yun, NAR chief economist.

USExistingHomesSalesReachHighestLevelinNineYearscreditTheBusinessJournals-postedtothedailybusinessnewsmhpronewsmhlivingnews

Lawrence Yun. Credit: The Business Journals.

This year’s survey reveals that debt and little or no equity in their home slowed many Gen X households from buying sooner.

Yun also said that recent Gen X buyers delayed buying longer than Millennials due to debt, and were also the most likely generation to have previously sold a distressed property, and want to sell earlier but couldn’t because their home was underwater.

Gen X sellers’ median tenure in their previous home was 10 years, which puts many of them selling a property they bought right around the time home values were on the precipice of declining,” said Yun.

Fortunately, the much stronger job market and 41 percent cumulative rise in home prices since 2011 have helped a growing number build enough equity to finally sell and trade up to a larger home. More Gen X sellers are expected this year and are definitely needed to ease the inventory shortages in much of the country.

The survey also showed that the increase in purchases from Gen X buyers this year, 28 percent, was the highest since 2014 and up from 26 percent in 2016.

Millennials represented the largest group of recent buyers for the fourth consecutive year at 34 percent, but their overall share was down slightly from a year ago, which was 35 percent.

In what has been a growing trend, younger boomers reportedly considered adult children when buying, with increases in the cost of rent in many areas is prompting many middle-aged parents to buy a home with their young adult children in mind.

Younger boomers were also surveyed as the most likely to purchase a multi-generational home, with the top reason being that children over 18 years old either moved back home or never left.

WhoisChoosingHomeownershipcreditNAR-postedtothedailybusinessnewsmhpronewsmhlivingnews

Credit: NAR.

The job market is very healthy for young adults with a college education, but repaying student debt and dealing with ever-increasing rents on an entry-level salary are forcing many to either shack-up with several roommates or move back home,” said Yun.

This growing trend of delayed household formation is one of the main contributors to the nation’s low homeownership rate.

Also of note were responses from millennial buyers, as more have at least one child and also have a need for more space.

Breaking from prior trends, only 15 percent of millennial buyers bought in an urban area, which is down from 17 percent last year and 21 percent two years ago.

Millennial buyers, at 85 percent, were the most likely generation to view their home purchase as a good financial investment,” said Yun.WhoisChoosingHomeownershipcreditMHLivingNews-postedtothedailybusinessnewsmhpronewsmhlivingnews

These strong feelings bode well for even greater demand in the future as more Millennials settle down and begin raising families. A significant boost in new and existing inventory will go a long way to ensuring the opportunity is there for more of them to reach the market.

For more from the NAR, including MHProNews and MHLivingNews Publisher L.A. “Tony” Kovach’s report on the significant opportunities for manufactured housing, click here. ##

 

(Image credits are as shown above.)

 

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RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

Pending Home Sales Numbers Released

March 1st, 2017 Comments off
PendingHomeSalesNumbersReleasedcreditAssociationsNow-postedtothedailybusinessnewsmhpronewsmhlivingnews

Credit: Associations Now.

The report is in from the National Association of Realtors (NAR).

According to Housing Wire, insufficient supply levels and contract activity in the West and Midwest decreased, bringing down pending home sales to their lowest level in a year.

The Pending Home Sales Index is a “forward looking indicator,” based on contract signings, and was down 2.8 percent to 106.4 in January, from 109.5 in December.

The significant shortage of listings last month along with deteriorating affordability as the result of higher home prices and mortgage rates kept many would-be buyers at bay,said NAR Chief Economist Lawrence Yun.

USExistingHomesSalesReachHighestLevelinNineYearscreditTheBusinessJournals-postedtothedailybusinessnewsmhpronewsmhlivingnews

Lawrence Yun. Credit: The Business Journals.

Buyer traffic is easily outpacing seller traffic in several metro areas and is why homes are selling at a much faster rate than a year ago. Most notably in the West, it’s not uncommon to see a home come off the market within a month.

The demand is so high that buying interest hit its highest point since the Great Recession of 2008.

As households grow more confident in their personal finances and job growth continues throughout the country, home sales increase across the country,” said Yun.

While this news is positive, for every action there is an equal and opposite reaction.

January’s accelerated price appreciation is concerning because it’s over double the pace of income growth and mortgage rates are up considerably from six months ago,” said Yun.

Especially in the most expensive markets, prospective buyers will feel this squeeze to their budget and will likely have to come up with additional savings or compromise on home size or location.

The NAR reports shows that existing home sales are projected to hit 5.57 million for the year, which is an increase of 2.2 percent from 2016, while the national median existing-home price is expected to increase 4 percent. This is compared to 2016 when existing homes sales increased almost four percent and home prices rose over five percent.

Sales got off to a fantastic start in January, but last month’s retreat in contract signings indicates that activity will likely be choppy in coming months as buyers compete for the meager number of listings in their price range,said Yun. ##

 

(Image credits are as shown above.)

 

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RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.