The Nail, July 2021 by Home Builders Association of Middle Tennessee (HBAMT)

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NAIL The official magazine of Home Builders Association of Middle Tennessee President Steve Shalibo Vice President Nick Wisniewski Secretary/Treasurer Brandon Rickman Executive Vice President John Sheley Editor and Designer Jim Argo Staff Connie Nicley Hannah Garrard

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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FEATURES 9 Register now to play in the James Hardie Golf Tournament

The James Hardie Golf Tournament is right around the corner. Register your foursome now and secure your space at the tournament.

10 Sign up now to sponsor the 2021 golf event

11 Consumer confidence reaches pre-pandemic high Consumers are more upbeat about current and future economic conditions and the share of those now planning to by a home is on the rise.

12 Contributions needed for the Showcase House program

Advertise in

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NAIL Email jargo@hbamt.org for more details!

Donate materials and/or labor to the HBAMT’s Showcase House program. There are currently two Showcase projects underway.

DEPARTMENTS 6 News & Information 13 SPIKE Club Report 14 July Calendar 14 Chapters and Councils

ON THE COVER: Consumers confidence in current economic conditions are on the rise. See page eleven (11) for more details. July, 2021

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NEWS&INFO

New home sales down in May as housing costs rise

ew home sales fell to the lowest pace in a year, with prices jumping 18% on a year-over-year basis, due to the high costs and uncertain availability of building materials, lots and labor. Sales of newly built, single-family homes fell 5.9% in May to a 769,000 seasonally adjusted annual rate, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The May number follows significant downward revisions to the April estimate and previous months’ readings. “New home prices have increased over the last year due to higher material costs and delays for deliveries,” said NAHB Chairman Chuck Fowke. “Policymakers must take action to improve supply-chains in order to protect housing affordability. While lumber costs have come down in recent weeks, they are still more than 210% higher than a year ago. And OSB prices are up 380% over the last year.” “As expected, new home sales have continued to soften this spring. While higher prices have shifted some buyers to the sidelines, NAHB survey data indicates that approximately 20% of builders have limited sales ac-

NAHB survey data indicates that 20% of builders have limited sales activity in order to manage supply-chains of materials. 6 The NAIL

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tivity in recent months in order to manage supply-chains of materials and labor availability,” said NAHB Chief Economist Robert Dietz. 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 May reading of 769,000 units is the number of homes that would sell if this pace continued for the next 12 months. Inventory remains low at a 5.1-month supply, with 330,000 new single-family homes for sale, 3.8% lower than May 2020. Supply-side challenges remain an issue, with the count of new homes sold that had not started construction, up 76% over the last year. The count of new homes sold that are completed and ready to occupy is down 33%. The median sales price was $374,400, up 18% from the $317,100 median sales price posted a year earlier. “Entry-level buyers are being most affected by higher prices,” noted Dietz. “Just a year ago, shares of sales priced below $300,000 accounted for 44% of sales, while this May it has dropped to 26%.” Regionally on a year-to-date basis new home sales rose in all four regions, up 48.7% in the Northeast, 33.5% in the Midwest, 32.3% in the South, and 5.6% in the West. These significant increases are due in part to lower sales volume during the Covid crisis a year ago. n

Single-family starts steady, builder confidence down

verall housing starts increased 3.6% in May to a seasonally adjusted annual rate of 1.57 million units off of a downwardly revised April reading, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The May reading of 1.57 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 4.2% to a 1.10 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 2.4% to a 474,000 pace. “Single-family starts held firm in May as demand remains strong despite recent gains in new home costs,” said NAHB Chairman Chuck Fowke. “However, single-family permits posted a decline as higher construction costs are deterring some residential construction activity. Policymakers need to help the industry’s supply-chains in order to protect housing affordability.” “Single-family permits declined to the lowest pace since September 2020 as the home building market cools somewhat to adjust to higher prices and longer delivery times of building materials,” said NAHB Chief Economist Robert Dietz. “The count of single-family homes permitted but not started construction is up 53% over the last year due to both gains for home construction since the onset of the 2020 virus crisis and the delay of some building projects due to higher costs for materials and labor.” On a regional and year-to-date basis (January through May of 2021 compared to that same

time frame a year ago), combined single-family and multifamily starts are 46.3% higher in the Northeast, 37.2% higher in the Midwest, 19.0% higher in the South and 26.4% higher in the West. These gains come off of depressed activity levels from last spring. Overall permits decreased 3.0% to a 1.68 million unit annualized rate in May. Single-family permits decreased 1.6% to a 1.13 million unit rate. Multifamily permits decreased 5.8% to a 551,000 pace. Looking at regional permit data on a yearto-date basis, permits are 43.2% higher in the Northeast, 36.2% higher in the Midwest, 29.9% higher in the South and 37.7% higher in the West. The number of single-family homes permitted but not started construction continued to increase in May, rising to 142,000 units. This is 53% higher than a year ago.. Builder confidence down Rising material prices and supply chain shortages resulted in builder confidence dipping to its lowest level since August 2020. The latest NAHB/Wells Fargo Housing Market Index (HMI) released today shows that build-

Building alternatives to help navigate elevated lumber prices

s lumber prices remain higher than normal, builders may be eyeing alternatives to wood and different construction methods to help mitigate the impact material costs and supply-chain disruptions are having on their businesses. Members and partners of NAHB’s Building Systems Councils have recently been spotlighted for their impact and innovations in the home-building industry,

including updates to modular construction processes and resilient building materials, which could provide potential solutions. “Whether it’s manufacturing with precision-cut lumber alternatives more efficiently in a factory setting or lumber alternatives like structural insulated panels [SIPs], prefabricated concrete walls or log home packages, systems-built construction can help home build-

er confidence in the market for newly built single-family homes fell two points to 81 in June. Despite the monthly decline, the reading above 80 is still a signal of strong demand in a housing market lacking inventory. “Higher costs and declining availability for softwood lumber and other building materials pushed down builder sentiment in June,” said Fowke. “These higher costs have moved some new homes beyond the budget of prospective buyers, which has slowed the strong pace of home building. Policymakers need to focus on supply-chain issues in order to allow the economic recovery to continue.” “While builders have adopted a variety of business strategies including price escalation clauses to deal with scarce building materials, labor and lots, unavoidable increases for new home prices are pushing some buyers to the sidelines,” said Dietz. “Moreover, these supply-constraints are resulting in insufficient appraisals and making it more difficult for builders to access construction loans.” Derived from a monthly survey that NAHB has been conducting for 35 years, the 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. Single-family home builders are invited to join the exclusive group of NAHB members who participate each month in the Housing Market Index survey. To begin receiving the monthly HMI surveys, please submit this form. n

ers mitigate supply shortages,” stated Brian J. Sielaff, P.E., P.Eng, 2021 Building Systems Councils chairman and CEO of Tamarack Grove Engineering, a structural engineering firm in Bosie, Idaho. Modular construction has been highlighted for its potential to combat (continued on page 13)

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Please return your completed registration form (provided below) to the HBAMT to enter. ALL COMPANIES & SINGLE PLAYERS ENTERING MUST BE A MEMBER OF THE HBAMT.

CONTACT ________________________________ COMPANY _____________________________________ EMAIL ___________________________________ PHONE ________________________________________ Print names of players. Four (4) players per team ($225.00 per player). 1.) _________________________________________ 2.) _____________________________________________ 3.) _________________________________________ 4.) _____________________________________________ Check your preference (to accommodate all golfers we are hosting two rounds): r Morning Round | r Afternoon Round _____ No. of players x $225.00 - Add $80.00 to purchase Mulligans now* | Make checks to HBAMT; call 377-1055 to pay by cc** *TEAM MULLIGAN PACKAGE - $80.00! - Purchase your team Mulligan package with your registration fees Return: HBAMT - 9007 Overlook Blvd, Brentwood, TN 37027 | Fax: 615-377-1077 | Email: cnicley@hbamt.org **A 3% convenience fee is applied to all credit card transactions

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Consumer confidence highest since March 2020

onsumer confidence continued its upward trend and approached to pre-pandemic level in May, as consumers became more upbeat about the current and future economic conditions and job market. Though short-term inflation expectations increased, it had little impact on consumer confidence or spending intentions. The share of consumers planning to buy homes, cars, and major appliances all increased, suggesting consumers will continue to support economic growth in the short-term. The Consumer Confidence Index, reported by the Conference Board, rose 7.3 points from 120.0 to 127.3 in June, the highest level since the start of COVID-19 pandemic. The Present Situation Index climbed 9.0 points from 148.7 to 157.7, while the Expectation Situation Index increased 6.1 points from 100.9 to 107.0. Consumers’ assessment of current business conditions significantly improved in June. The shares of respondents rating business conditions “good” increased by 4.6percentage points to 24.5%, while those claiming business conditions “bad” fell by 1.1 percentage points to 19.5%. Meanwhile, consumers’ assessment of the labor market was also more favorable. The share of respondents reporting that jobs were “plentiful” rose by 5.9 percentage points, while those saw jobs as “hard to get” declined by 0.7 percentage points. Consumers were considerably more optimistic about the short-term outlook. The share of respondents expecting business conditions to improve increased from 31.0% to 33.3%, while those expecting business conditions to deteriorate decreased from 14.4% to 10.6%. However, expectations of employment over the next six months were mixed. The share of respondents expecting “more jobs” fell by 2.0 percentage points to 25.7%, while those anticipating “fewer jobs” declined by 1.5 percentage points to 16.0%. The Conference Board also reported the share of respondents planning to buy a home within six months. The share of respondents planning to buy a home rose to 6.1% in June. The share of respondents planning to buy a newly constructed home increased to 0.6%, and for those who planning to buy an existing home inched up to 2.4%. However, surging home prices and lack of inventory could further harm affordability and hinder ownership opportunity. n July, 2021

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SHOWCASE HOUSE Fundraiser Program The HBAMT Showcase House program is an effort to generate funds to help fuel the association’s daily efforts to promote the home building industry and defend its builders against unjust legislative activity. We currently have TWO projects underway: - The Showcase House at Nature’s Landing - The Showcase House at Hardeman Springs See the brochures below for a complete list of materials and labor needed for each project. Contact information for donating to each of the programs is listed below the brochure links.

SEE INSIDE FOR A COMPLETE LIST OF MATERIALS AND LABOR NEEDED FOR THE PROJECT. Visit https://hbamt.org/natures-landing/ for updated lists on needed materials/labor.

SEE INSIDE FOR A COMPLETE LIST OF MATERIALS AND LABOR NEEDED FOR THE PROJECT. Visit

For specific details regarding materials please contact Jimmy Franks: 615-794-7415 or franco314@aol.com; or Blake Parks: 615-243-6373 or blake@tennesseevalleyhomes.com

For specific details regarding materials please contact Steve Shalibo: 615-772-1019 or shalibo42@gmail.com

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https://hbamt.org/hardeman-springs/ for updated lists on needed materials/labor.

SPIKE REPORT Randall Smith Jim McLean David Hughes

Seventeen 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 May 31, 2021. Top 20 Big Spikes Jim Ford 912 Mitzi Spann 789 Bill King 776 Terry Cobb 570 Jim Fischer 567 John Whitaker 565 Trey Lewis 518 James Carbine 410 Jennifer Earnest 379 Jimmy Franks 358 David Crane 340 Kevin Hale 302 Reese Smith III 261 Steve Moody 221 Sonny Shackelford 219 Davis Lamb 218 Jackson Downey 182

housing affordability, in part because of the speed and efficiency it offers — which are also pros when dealing with supply-chain challenges. MiTek recently made headlines for its efforts to further streamline modular construction by providing the parts, instead of full modules, for general contractors to assemble on site and automating its manufacturing process, comparable to car assembly line. The company will launch a new modular venture next year, with a focus on hotels and apartment buildings — including a partnership with an architectural firm that aims to build the world’s tallest modular hotel. Resiliency is also beneficial in combating lumber needs by creating longer-lasting materials — especially when the product in question doesn’t include lumber at all. RSG 3-D’s panels — comprising foam insulation, a steel grid and concrete covering — were utilized in a northern California home that was able to withstand a devastating wildfire, prompting the question why the majority of homes are still made of wood. Time pointed to NAHB statistics regarding not only the number of homes constructed with wood, but the financial impact that the lumber crisis has had on the cost of single-family homes as potential reasons to revisit building with different materials for today’s homes. (continued from page 7)

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Life Spikes Tonya Esquibel 152 Harry Johnson 146 Nick Wisniewski 145 Steve Cates 144 C.W. Bartlett 138 Steve Shalibo 127 Jordan Clark 125 B.J. Hanson 122 Carmen Ryan 121 Steve Hewlett 119 John Zelenak 118 Michael Dillon 115 Dave McGowan 114 Justin Hicks 113 Brandon Rickman 112 Edsel Charles 110 Wiggs Thompson 106 Duane Vanhook 103 Joe Morgan 94 Jeff Zeitlin 87 Keith Porterfield 82 Erin Richardson 77 Jody Derrick 75 Sam Henley 74 Beth Sturm 74 Lori Fisk-Conners 70 Ron Schroeder 69 Andrew Neuman 63

“It’s important to look at total costs,” shared John Barrows, owner of P3 Group in Bridgehampton, N.Y., during a recent NAHB webinar exploring lumber alternatives — specifically SIPs. “As codes are becoming more stringent … conventional construction costs are being driven higher and higher by some of the things that we have to do. And by using a system such as SIPs, you’re able to accomplish that in a much more cost-effective manner to achieve the same outcomes.” “I found on the last eight projects that building a SIP house is 2% to 3% less in direct costs

Christina James 57 Brian Sebring 56 John Broderick 55 Rick Olszewski 52 John Ganschow 51 Phillip Smith 47 Ricky Scott 45 Joe Dalton 44 Rachel Holloway 42 Frank Jones 42 Ryan Meade 39 Frank Tyree 33 Don Mahone 31 Jeffrey Caruth 26 Spikes Maverick Green 22 Perry Pratt 20 Jim Hysen 19 Margaret Tolbert 19 Tammy Chambers 16 Nicole Bird 15 Rob Pease 14 Eric DeBerry 12 John Nehrenz 12 MacKenzie Curtis 10 Will Montgomery 10 Chris Richey 10 Bob Bellenfant 8 Clint Mitchell 8 Lisa Underwood 8 Matt Dryden 7 McClain Franks 6

over the whole project than a conventional system with insulation and air sealing to the same level,” he added. As lumber prices remain volatile, builders may want to explore similar alternative methods and materials for their own business. To help builders continue to navigate the impact of increased lumber prices and supply-chain challenges, NAHB is offering a number of webinars to members and industry professionals. To view the current schedule, as well as replays of previous webinars, visit nahb.org/supplychain. n

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JULY CALENDAR Sunday

Monday

Tuesday

Wednesday

Thursday

Friday

Saturday

Sales & Marketing Council Meeting

CHAPTERS & COUNCILS CHAPTERS CHEATHAM COUNTY CHAPTER Chapter President - Roy Miles. Cheatham County Chapter details are being planned. Next meeting: to be announced. Chapter RSVP Line: 615/377-9651, ext. 310 DICKSON COUNTY CHAPTER Chapter President - Mark Denney. The Dickson County Chapter meets on the third Tuesday of the month, 12:00 p.m. at Colton’s Steakhouse in Dickson. Next meeting: to be announced. Topic: to be announced. Price: FREE, lunch dutch treat. Chapter RSVP Line: 615/377-9651, ext. 264 MAURY COUNTY CHAPTER Maury County Chapter details are currently being planned. Next meeting: to be announced. Chapter RSVP line: 615-377-9651, ext. 312; for callers outside the 615 area code, 1-800-571-9995, ext. 312 METRO/NASHVILLE CHAPTER Chapter President - Tonya Esquibel. The Metro/Nashville Chapter meets on the fourth Monday of the month, 11:30 a.m. at the HBAMT offices. Next meeting: to be announced. Topic: to be announced. Builders Free pending sponsorship. Price: $10 per person with RSVP ($20 w/o RSVP). Chapter RSVP Line: 615/377-9651, ext. 261 ROBERTSON COUNTY CHAPTER

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Next meeting: to be announced. Robertson County RSVP line: 615-377-9651, ext. 313. SUMNER COUNTY CHAPTER Chapter President - Joe Dalton. The Sumner County Chapter meets on the fourth Tuesday of the month, 11:30 a.m. at the new Hendersonville Library. Next meeting: to be announced. Chapter RSVP Line: 615/377-9651, ext. 262 WILLIAMSON COUNTY CHAPTER Chapter President - John Nehrenz. The Williamson County Chapter meets on the third Tuesday of the month, 11:30 a.m. at the HBAMT offices. Next meeting: to be announced. Builders Free pending sponsorship. Price: $10 per person with RSVP ($20 w/o RSVP). Chapter RSVP Line: 615/377-9651, ext. 305 WILSON COUNTY CHAPTER Chapter President - Nick Wisniewski. The Wilson County Chapter meets on the second Wednesday of the month, 11:30 a.m. at the Lebanon Wilson County Chamber of Commerce in Lebanon. Next meeting: to be announced. Topic: to be announced. Chapter RSVP Line: 615/377-9651, ext. 309 COUNCILS GREEN BUILDING COUNCIL Council President - Erin Richardson. The Green Building Council meets on the fourth Wednesday of the month, 11:00 a.m.

Next meeting: to be announced. Price: free for Green Building Council members pending sponsorship; $20 for non-members with RSVP ($25 w/o). Council RSVP Line: 615/377-9651, ext. 308 HBAMT REMODELERS COUNCIL Council President - Eli Routh. The HBAMT Remodelers Council meets on the third Wednesday of the month at varying locations. Next meeting: to be announced. Topic: to be announced. Price: free with RSVP. Council RSVP Line: 615/377-9651, ext. 263 INFILL BUILDERS COUNCIL The Infill Builders Council typically meets on the third Thursday of the month, 11:30 a.m. at the HBAMT offices Next meeting: to be announced. Price: to be announced. RSVP to: 615/377-9651, ext. 265. MIDDLE TENN SALES & MARKETING COUNCIL Council President - Jessica Neal. The SMC typically meets on the first Thursday of the month, 9:00 a.m. at the HBAMT offices. Next meeting: Thursday, August 5th. Topic: to be announced. SMC Members FREE w/RSVP pending sponsorship. Non-SMC members: $15 with RSVP; $20 w/o RSVP RSVP REQUIRED - LIMITED SEATING RSVP to cnicley@hbamt.org Council RSVP Line: 615/377-9651, ext. 260.

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