Friday Round Up 10/23/15

In a segment we’re calling Friday Round Up we gather the most important and interesting stories from around the web as it pertains to home building.

Candidates to Talk Home Building at IBS

Source: NAHB Now

NAHB is inviting all Democratic and Republican presidential candidates to present their views on economic, foreign and domestic policy issues – including the state of the home building industry – in a forum being held during the NAHB International Builders’ Show (IBS) in Las Vegas Jan. 20.

The event will be co-moderated by Ron Brownstein, editorial director for strategic partnerships at Atlantic Media (the parent company of the National Journal) and Jon Ralston, host of “Ralston Live” on Nevada public television stations. Each candidate will appear separately onstage to participate in a 20-minute discussion with our moderators, and will answer questions from members of the audience.

Construction Workers ‘Left the Business and They Didn’t Come Back’
Source: The Wall Street Journal

Home builders are facing delays and rising costs as they struggle to find enough construction workers.

That’s partly a function of the housing boom and bust, which helped push industry-wide employment above 7.7 million in 2006, only to watch it come crashing down by nearly 2.3 million over the next five years. While builders are used to ups and downs, the most recent bust was extreme in magnitude and duration.

“The difference this time is that a whole generation left the business and they didn’t come back,” said John Gillilan, operations manager at Bothell, Wash.-based Element Residential Inc. “So there’s a vacancy in the ranks at almost every company.”

That’s bad news for builders, who can’t grow as fast as they would like amid increasing delays and rising costs—factors that could feed through to home buyers in the form of less supply and higher prices.

Home Builder Optimism Hits 10-Year High

Source: Builder Online

The Wall Street Journal’s Jeffrey Sparshott looks at the latest builder confidence numbers from the NAHB, which shows the housing market index reaching 64 this month, up from 61 in September–and the highest it’s been since 2005.

The rosy number beat expectations, as economists surveyed by the Wall Street Journal predicted a 62, kicking off a busy week of housing-related reports, including data on starts and existing home sales.

The latest reading “suggests robust sentiment among home builders and bodes well for our expectation of further improvement in housing activity during” the remainder of 2015, Blerina Uruci, an economist at Barclays, said in a note to clients.

Why Prices Can’t Rise Fast Enough For Home Builders

Source: Builder Online

While builder confidence is back to pre-recession levels, the pace of housing production in September was just a seasonally adjusted rate of 740,000, less than half of what it was in October 2005, and a quarter below the long-term historical average of 1 million.

But prices are healthy, reaching a median level of $290,300 in the 12 months ending in August, 35% higher than the existing home sales average in that time period.

Existing Home Sales Rebound, Rising 4.7% In September

Source: Builder Online

The NAHB’s Stephen Melmen looks at yesterday’s existing home sales figures from the National Association of Realtors which showed a 4.7% month-over-month and 8.8% year-over-year increase in September–though the share of first-time buyers fell to 29%, down from 32% the previous month.

Total sales of single-family homes, townhomes, condos and co-ops reached a seasonally adjusted 5.55 million units, up from the 5.3 million sold in August. Prices jumped 6.1% year-over-year to reach a median level of $221,900.