Amid Record Low Rates, Refinancing Flourishes

By Housing

Over the last two weeks, the Mortgage Bankers Association’s tracked 30-year fixed-rate mortgage average rate fell by 14 basis points to 3.06%, a new record low in the series. At the same time, the results from its Weekly Application Survey show both weekly and year-over-year percentage increases in purchasing and refinancing activities.

On a seasonally adjusted basis, purchasing activity increased by 2.0% from the previous week and by 26% compared to the same week last year, while refinancing showed a stronger weekly gain of 9.1% and a staggering year-over-year gain of 47%. Between refinancing and purchasing activities, the former accounted for 65.7% of all mortgage activity in terms of the number of applications, the highest share in over three months. Combined with low housing inventory, the movement of interest rates to record lows over the past couple of weeks and the slower pace of purchasing relative to refinancing are a testament to the current housing market being a seller’s market.

Government-backed mortgage activity also increased in the previous week: the FHA’s share of mortgage applications increased to 10.4% from 9.6% and the Veteran Administration’s (VA’s) share increased by 20 basis points to 11.4%. USDA (farm) applications remained unchanged at 0.6%.

How to Help the Future Green Building Workforce

By Industry News

This year’s Solar Decathlon Design Challenge was held virtually in the wake of COVID-19. Collegiate teams compete in categories such as mixed-use multifamily, urban single family and suburban single family; winning projects feature innovative designs for buildings that excel in affordability, efficiency and occupant health.

If you’re wondering how your company can get involved with this annual Department of Energy competition, consider participating as a mentor in the Design Partners program.

Your company could gain exposure by providing student teams with real-life experience working on buildings and homes with your clients. Whether you’re a seasoned high-performance builder or relatively new to the market, the Design Partners program allows you to mentor students and receive a zero-energy design — i.e., a building that produces as much energy as it consumes — for a new or existing building in your project portfolio.

The program requires a 20- to 30-hour commitment over the course of a year of in-person or remote consultation with the student team to discuss your design requirements and give them ongoing feedback leading up to the competition. There are also minimum parameters depending on the building type. For example, in the urban single-family housing division, the building must be between 300 and 2,500 square feet, and the lot size can be up to 5,000 square feet.

In return for completing the consultation hours and fulfilling basic design parameters, your company will:

  • Have the chance to mentor and work with students;
  • Establish relationships with the younger workforce and build your company’s exposure for potential future employees;
  • Receive a zero-energy design for a real project in your portfolio that you are already contracted to design and build; and
  • Receive a basic cost estimate for the building.

To see how other organizations have contributed and interacted with the Design Partners program, visit the Solar Decathlon’s project profiles page or see how other NAHB members have mentored previous winners. If you have a project in mind and are interested in participating, the Design Partner form is now available.

For more information about NAHB’s sustainable and green building programs, contact Program Manager Anna Stern. To stay current on the high-performance residential building sector with tips on water efficiency, energy efficiency, indoor air quality, and other building science strategies, follow NAHB’s Sustainability and Green Building team on Twitter.

Gain for the “Core” CPI in July

By Housing

In July, overall inflation remained unchanged from the previous month, while core inflation accelerated.

The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 0.6% in July on a seasonally adjusted basis, the same increase as in June. Excluding the volatile food and energy components, “core” CPI rose by 0.6% in July, after an increase of 0.2% in June. It marked the largest monthly increase in the “core” CPI since January 1991. This monthly increase in the “core” CPI was caused by increases in multiple indexes. In July, the indexes for shelter (0.2%), communication (1.9%), used cars and trucks (2.3%), apparel (1.1%) and medical care (0.4%) all increased, while the index for recreation declined by 0.6%.

In July, the increase in energy prices was partially offset by the decrease in the food index. The price index for a broad set of energy sources rose by 2.5% in July, after an increase of 5.1% in June. The food index decreased by 0.4% in July, following a 0.6% increase in June. It was the first decrease since April 2019. The index for food at home decreased by 1.1% in July after an increase of 0.7% in June. Five of the six major grocery store food group indexes fell in July. The index for food away from home rose by 0.5% in July, the same increase as in June.

During the 2008 recession, steep declines in energy prices pulled overall inflation away from core inflation, widening the gap between overall and core inflation. Unlike the 2008 recession, significant declines in core inflation, along with decreases in energy prices, accounted for drops in overall inflation during the recent COVID-19 pandemic. Overall and core inflation moved in the same direction over the past seven months.

During the past twelve months, on a not seasonally adjusted basis, the CPI rose by 1.0% in July, following a 0.6% increase in June. Meanwhile, the “core” CPI increased by 1.6% over the past twelve months, after a 1.2% increase in June. The food index rose by 4.1% and the energy index declined by 11.2% over the past twelve months.

BLS data collection in July was again affected by the COVID-19 pandemic. BLS mentioned in the today’s news release that many indexes are based on smaller amounts of collected prices than usual, and a small number of indexes that are normally published were not published this month.

Review Your Job Site Safety Plan During Safe + Sound Week

By Industry News

OSHA’s Safe + Sound Week, Aug. 10-16, is a nationwide event held each year that recognizes the successes of workplace health and safety programs and offers information and ideas on how to keep America’s workers safe.

Successful safety and health programs can proactively identify and manage workplace hazards before they cause injury or illness, improving sustainability and the bottom line.

This week is the perfect time for home builders to review their written job site safety and health programs. A written safety program is a requirement for construction job sites under OSHA regulations. All employees must be aware of the program and many elements are required to be posted on the site.

NAHB has developed free safety program resources for home builders and contractors. The Safety Program Toolkit is designed for small to medium-sized home builders and general contractors to use as a model for their own safety programs.

The NAHB model safety program contains the materials needed to effortlessly set up a successful, company-wide safety program, including company and employee documentation and notices that can be posted on the job site. It can be customized to reflect the particular circumstances of each job site.

Last year, NAHB teamed up with sponsor James Hardie to offer a safety program for siding contractors. It also serves as a model program designed for small companies primarily engaged in installing siding of fiber cement, wood, aluminum, vinyl, or other exterior finish material (except brick, stone, stucco, or curtain wall) on residential buildings.

In addition to a written plan for general job site safety, NAHB reminds members that diligence must be continued to slow the effects of the COVID-19 pandemic. NAHB published job site guidance for coronavirus safety early in the pandemic, and has since updated it to stay current with the latest guidance from government and public health authorities.

The safety and health of NAHB members, and all who work in residential construction, is a top organizational priority. A culture of safety begins with a thorough plan that is readily accessible to managers, workers and subcontractors.

For questions about safety programs, contact Rob Matuga.

House Plan Designs that Can Save You Thousands

By Industry News

In NAHB’s webinar House Plan Designs that Can Save You Thousands, on Wednesday, Aug. 19, 2-3 p.m. ET, participants will learn how to get the most out of every square foot in a new home and slash costs while increasing curb appeal.

Through the power of smart, economical house plans, discover how design can unlock functionality and provide home buyers with contemporary, money-saving features at a price that is well within most budgets.

Speaker Michael Walker, owner, Walker Home Design, will help participants:

  • Discover how to reduce waste and construction time while increasing profits.
  • Learn design tips so you can provide your clients with a more aesthetically pleasing product.
  • Review a case study where implementing value engineering provided substantial savings for both the builder and client.

Register today.

Registration is open until 3 p.m. ET on Tuesday, Aug. 18. For questions about registration, please contact Deborah Krat at EdWebinars@nahb.org.

Participants can earn one hour of continuing education credits for the following designations: CAPS, CGA, CGB, CGP, CGR, CMP, CSP, GMB, GMR, Master CGP, Master CSP, and MIRM.

Nearly Half a Million Construction Workers Hired in June

By Industry News

After an accelerated pace of layoffs in March and April stemming from the COVID-19 pandemic, construction sector hiring roared back in May and posted a slower but solid pace in June, according to the latest data from the BLS Job Openings and Labor Turnover Survey (JOLTS).

The construction sector hired 679,000 workers in May, followed by 498,000 in June. By comparison, 423,000 construction workers were hired in June 2019.

In May, the construction hiring rate [the number of hires (679,000) divided by total employment and sector job openings] increased to 9.7%, after a subdued 3.7% rate in April. This was the strongest rate of hiring in the history of the JOLTS data. In June, the rate was 6.9%, slower than May but still well above average.

This pace of rehiring, combined with weakness in the nonresidential sector, reduced the open jobs rate to just 3.3% in June, with a  total of 245,000 open construction sector jobs. The open job count was 325,000 a year ago. However, builders continue to cite limited access to skilled construction workers as a concern as they seek workers to undertake more home construction and remodeling.

NAHB Chief Economist Robert Dietz provides more details in this Eye on Housing blog post.