BuilderRadio Press Room

Measure Of Industry Sentiment Reaches Highest Level Since July 2005

Republished from The Wall Street Journal December 15th, 2016. Written by Eric Morath.

WASHINGTON—Home builders are confident President-elect Donald Trump’s policies will deliver a boost to their industry.

The National Association of Home Builders’ sentiment measure, released Thursday, rose in December to the highest level since July 2005, near the peak of the housing bubble.

The reading itself doesn’t suggest home building will surge back to precrisis levels, when construction started on about 80% more homes than the pace recorded in recent months. But the report does indicate that builders expect a Trump administration to lend more support to the industry, through reduced regulation and taxes.

“The general consensus is everyone is feeling more positive about” 2017, said Lance Wright,partner at Texas home builder CastleRock Communities. “If there’s tax-based and general growth” clients are “excited about it.”

What is less clear, however, is how a Trump administration will affect builders’ regulatory costs, which are largely controlled at the local level.

“I agree with Trump that there are hundreds of millions of dollars wasted on regulatory red tape,” he said. “Whether or not that trickles down to the local level is unlikely.”

Even before the election, low unemployment and rising wages have helped create stronger demand for housing. Purchases of existing homes touched a postrecession high in October and home prices are rising. That should provide builders with many customers heading into next year.

Builders’ confidence rose seven points this month to a reading of 70 in the first survey conducted entirely after the election. Readings above 50 indicate more builders view conditions as good than poor. Current market conditions and expectations for the next six months both significantly improved. The component measuring traffic of prospective buyers moved into positive territory for the first time in more than a decade.

“It’s a sign that builders believe they will have a friend in the Oval Office,” said Ralph McLaughlin, economist at real estate site Trulia. “Whether that’s a rational response is a different question.” Mr. Trump’s immigration and trade policies could limit the supply of skilled labor while increasing the cost of raw materials, he said.

Builders are hopeful that Mr. Trump “will follow through on his pledge to cut burdensome regulations that are harming small businesses and housing affordability,” said Ed Brady, chairman of the home builder trade group, and a builder and developer from Bloomington, Ill.

Movement in the builder-sentiment figure doesn’t always translate into near-term changes in home construction. And December’s increase was unusually large, matching the biggest one-month gain since 2002.

“This significant increase in builder confidence could be considered an outlier,” saidRobert Dietz, the home builder trade group’s chief economist. But the rise “is consistent with recent gains for the stock market and consumer confidence.”

He said builders do remain concerned about mortgage rates and labor shortages.

“Builders are rallying on Trump’s promise to lower regulations,” said Nela Richardson, chief economist for real estate site Redfin. But “with nearly 1 in 4 construction workers from other countries and labor shortages a significant headwind, closed-door immigration policies could bulldoze builder confidence.”

Mortgage rates have been historically low this year, but have risen around three-quarters of a percentage point since the election. Home-loan rates could face additional upward pressure with the Federal Reserve signally further increases to the central bank’s benchmark rate next year, after announcing a move Wednesday.

Ara Hovnanian, chairman and chief executive of national home builder Hovnanian Enterprises Inc., said in a conference call last week that he expects buyer demand to remain strong despite rising mortgage rates.

Overall affordability is “still at very, very good levels compared to historical norms,” he said. “I think rates would have to go up quite a bit and quite rapidly to really cause any concerns in the marketplace.”

Service Certainty, The Secrets To Customer Loyalty

Debut of Service Certainty, a new book on customer loyalty for the homebuilding industry, will revolutionize how builders approach customer service and build business

 Co-authors Paul Cardis and Jason Forrest reveal industry secrets, strategies, and solutions that will help create high customer loyalty and success for homebuilders.

 Madison, Wis. – (December 13, 2016) – Paul Cardis, founder of Avid Ratings, a leading research and consulting firm in the homebuilding industry, and Jason Forrest of Forrest Performance Group (FPG), a leading authority in creating high-performance sales cultures, announced today the release of their new book, Service CertaintyThe Secret to Creating Customer Loyalty. 

 As customer loyalty in the homebuilding industry becomes more important than ever before, verifying operational excellence through honest evaluations of customers’ experiences will be key to homebuilders’ success. This book will help change the very core of how builders do business, help them create long-lasting customer loyalty through a series of best practices, and help them learn how to make customers happy and brand-loyal in a competitive landscape.

 “Paul’s and my combined decades of experience help provide an understanding on what it takes to make customers truly happy,” said co-author Forrest. “Our experience has also taught us that the most complex problems often have simple solutions.  The book addresses the psychology of customer loyalty because happiness is in the mind. We want the reader to come away with a deeper understanding of how happiness works and how it helps drive customer loyalty.”

The 100-page book features best practices for each step of the buying process and customer service, including “Get Your Mind Right About Customer Service” and “Define Brand from the Inside Out”.  Each chapter of the book illustrates to readers how to lead the sales process in a way that gives reassurance to buyers, creates loyal customers, and makes customers happy through operational excellence in organic and authentic ways. In addition, each chapter demonstrates how to deliver great customer experience by hiring people that fit with the culture, while training them for success, among other key ways to revolutionize the approach to customer service.

“Buying a home is one of an individual’s or family’s most critical life decisions, and the sale can take up to a year,” said co-author Cardis. “The homebuilder who successfully cultivates service certainty ends up with committed and deeply loyal buyers who naturally express that loyalty through high survey scores, positive customer reviews, and frequent referrals.”

The book represents the knowledge both authors have gained from years of successfully working in the homebuilding industry to improve business and customer service. Cardis has worked with the industry’s leading homebuilders to measure the customer experience and transform low customer experience scores into high scores, while Forrest’s experience has helped homebuilders gain a greater understanding of what works on a cultural level to affect change, and to rethink, recondition, and redefine for success. Although they differ in areas of expertise, Cardis and Forrest have a shared vision for solving the issue of customer loyalty. Their backgrounds in strategy, coupled with research, provide a winning combination for readers of the book.

Service Certainty, The Secret to Creating Customer Loyalty is available for purchase and download through Avid Ratings ( or through Forrest Performance Group (

Residential Construction Employment Up Nearly 5 Percent From Last Year

Republished from, December 2nd, 2016. Written by Svenja Gudell.

  •  U.S. employers added 178,000 non-farm jobs in November. The unemployment rate fell to 4.6 percent, the lowest since August 2007, largely driven by employment gains among adult men.
  • Average hourly earnings nationwide rose 2.5 percent in November from a year ago, though slipped somewhat from a month prior after strong gains in October.
  • Residential construction employment rose 4.9 percent year-over-year in November, continuing recent strength. Over the past 3 months, the construction industry overall has added 59,000 jobs, largely in residential construction.

The November jobs report shows an economy running largely at full steam, with the unemployment rate – already low – falling to its lowest level since August 2007. Given this strength, if there were any lingering doubts that Federal Reserve officials would opt to raise rates at this month’s board meeting, today’s report should toss them out the window.

Much of the jobs recovery has been focused on full-time positions, and the number of involuntary, part-time workers is down by more than 400,000 from a year ago, which implies better opportunities for many workers. Wages rose 2.5 percent from a year ago, which, combined with employment gains overall, could bode well for holiday spending.

Encouragingly, residential contractors and developers were among the biggest job creators in November. Residential construction employment rose 4.9 percent from a year ago, continuing recent strength, though some of the bump is likely attributable to re-building efforts in the Southeast after Hurricane Matthew.

Over the past three months, the construction industry overall has added 59,000 jobs, largely in residential construction. Continued hiring in this sector could be a good sign for home buyers struggling with incredibly tight inventory, and a continued ramp up in home construction activity will only help alleviate the problem as we move past the holidays and into 2017.

Small Prefab Homes: ‘The Best-Kept Secret in America’?

Republished from®, November 29th, 2016. Written by Lisa Johnson Mandell

Marry the small-house craze with the equally hot trend of prefab homes, and what do you get? Small prefab homes, which are the housing industry’s equivalent to miniature schnauzers tied with a gift bow on Christmas day: extremely cute and increasingly in demand. Or, so argues Sheri Koones‘ latest book, “Prefabulous Small Houses,” which explores the beauty, variety, and benefits of small-scale prefab construction in all its glory.

Also the author of “Modular Mansions” and “Prefabulous World,” Koones argues that these prefab homes may be small, but they are so beautiful and well-built, you can’t tell the difference between them and the supposedly “nicer” houses constructed on-site.

Robert Redford, who wrote the foreword, is also a fan: “Building smaller, along with building houses prefabricated—in the process using less time, fewer materials, and using both more efficiently—is the sanest and wisest recipe for home construction, for now and for the future.”

We talked with Koones about what we can all take away from these modest yet amazing dwellings.

Q: What’s the biggest misconception people have about small prefab houses?

A: The important thing for people to understand is that prefab homes today are literally indistinguishable from site-built houses. Realtors® don’t even have to disclose a house [they are selling] is prefabricated. I interviewed someone who bought a prefab panelized house, and he didn’t understand why I wanted to interview him. I explained, “your house is panelized,” and he said, “no, no, my house is a very expensive luxury house.” I said, “yes, it is,” and it was panelized and that means it’s prefab.

Q: What do you consider a ‘small house’? Is it the same thing as a ‘tiny house’?

A: The smallest house I feature in the book is 352 square feet. I differentiate that from a “tiny house” in that the one I write about is connected to the grid, it has a foundation, a septic system, plumbing electricity, etc., and it meets all the local codes. The largest house I feature is 2,500 square feet, and I’m considering that small, because it’s one of the smaller homes in Santa Monica. It’s all relative to the area.

Q: What are some of the basic elements of the small prefab houses?

A: In all of these houses, space is used in an intelligent way. A lot of the rooms are multipurposes. There are no large hallways or wasted space. All were built in less time than a site-built house would take, and are sustainable and low maintenance. Those are elements everyone seems to be looking for in homes these days.

Q: Are small prefab homes less expensive than houses built on-site?

A: Well yes, if they’re smaller. But price per square foot is usually about the same. But you save in other ways. Construction costs are reduced, because small prefab homes take much less time to build. There is less wasted material. Building on-site, you pay for wood, drywall, piping, etc., and the cutoffs go into dumpsters, which you have to pay to rent. When your home is built in a factory, you only pay for what you get, and the overages are recycled.

Q: Are prefab houses really as strong as site-built homes?

A: Yes! One contractor described it this way: You could never lift a site-built home with a crane and put it on a foundation—it would fall apart. But a prefab house is built strong, so it can travel along the highway, and it can be lifted with a crane and set on a foundation.

Q: If small prefab houses are so great, why aren’t all houses built this way?

A: Prefab is the best-kept secret in America. Most people don’t even think about prefab homes. They automatically turn to site-built, because that’s the way it’s always been done. But anyone who does their research will build prefab. It’s a superior way to build.

Q: What kind of home do you live in?

A: I used to live in a large, 6,800-square-foot house that I built on-site 20 years ago when my children were young, so I know the horrors of building on-site. Just recently I was able to sell that house, and I’m living in a small house now, a portion of which is prefab. I prefer it. It’s cozy, it’s less work. I like the lack of maintenance and the savings. I was paying thousands in electric bills, and my bill last month was $170.

Q: What’s the biggest challenge of moving into a small prefab house?

A: The most difficult part is streamlining your possessions. I didn’t realize I had so much “stuff.” I had a tag sale. I gave away a lot, donated to charity, and sold furniture at an auction house. Now I have about one-eighth of the stuff that I had before. It’s really exhilarating to get rid of all that extra stuff.

Tightened Inventory Means More Time Looking At Fewer Homes

Republished from National Association of Relators® Economist’s Outlook November 18th, 2016. Written by Amanda Riggs.

Over three decades, the number of homes viewed during buyers’ home search process has decreased while the number of weeks that buyers search has increased. The Profile of Home Buyers and Sellers has collected data since 1987 on the length of the home search process and the number of homes viewed. This year, NAR celebrated its 35th anniversary of the profile report and to commemorate we take a look back at the data to compare how searching for a home has changed over time. Continue reading

October Housing Market Rewards Sellers With Largest Price Increase In 10 Months

Republished from, November 17th 2016. Written by Nela Richardson.

The median home sale price increased 7 percent in October, the strongest year-over-year growth Redfin has seen in 10 months. Overall home inventory declined for the 13th month with an 8.6 percent year-over-year drop, the biggest decline since May 2013. New listings dropped 6.9 percent, the largest year-over-year decline since December 2012.

Although the substantial increase in home prices and other speed and competition metrics reflect a very active housing market last month, the number of homes sold declined 3.2 percent year over year following two months of double-digit surges in metros tracked by Redfin.

Last month, homes spent a median 49 days on the market, five fewer than a year earlier. More than one in five (21.3%) homes went under contract within two weeks in October, up from 19 percent a year earlier. Another one in five (20.1%) homes sold for more than their asking price, up from 18.9 percent a year earlier.

Seven Florida metros led the nation in home price growth–including Deltona (up 18.4 percent), West Palm Beach (14.8 percent), Fort Lauderdale (14.2 percent), Fort Myers (14.1 percent) and Lakeland (13.6 percent).

“Florida’s growing economy and relatively affordable prices have brought more transplants here this past year,” said Delray Valle, Redfin real estate agent in West Palm Beach. “Local sellers see that they can price high and make a decent profit on the newcomers. Even homeowners who bought at the top of the market just before the recession can now easily fetch double what they paid for at the time, as long as they are patient enough to find the right buyer.”

While the October market rewarded sellers, it hit buyers at the low end of the market the hardest. The lack of affordable new construction, high investor demand for rental units and a slowdown in new listings sent prices for starter homes up faster than they have grown all year. With no new supply surge on the horizon, finding an affordable home will continue to be an unrelenting challenge for first-time buyers for the remainder of the year and into 2017. The good news is that mortgage rates continue to provide an affordability cushion, giving buyers a bit of wiggle room against budget constraints.


A Home-Building Explosion In October

Republished from, November 17th, 2016. Written by James Limbach.

It’s almost as if you could hear the hammering and earth-moving without let-up last month.

Figures released by the Commerce Department show construction of privately-owned housing shot up 25.5% in October to a seasonally adjusted annual rate of 1,323,000. That rate is also 23.3% higher than October 2015.

The increase was broad-based, with the Northeast, Midwest, South, and West rising 44.8%, 44.1%, 17.9%, and 23.2%, respectively.

Groundbreaking for single-family housing jumped 10.7% to a rate of 869,000 — the highest level since October 2007. The October rate for multifamily units was 445,000, up 68.8% from September.

“Multifamily production bounced back after an unusually weak reading last month while single-family starts exhibited unusually strong growth as well,” said National Association of Home Builders Chief Economist Robert Dietz. “Though October’s single- and multifamily production rates are clearly unsustainable, we expect continued growth in the housing sector in the months ahead.”

Building Permits

Indeed, while the current rate of housing starts is unlikely to continue, the outlook for new-home construction in the months ahead is fairly encouraging.

Issuance of building permits was up 0.3% last month to a seasonally adjusted annual rate of 1,229,000.

Authorizations for single-family homes were at a rate of 762,000 — 2.7% above the September level, while permits for multifamily units fell 3.3% to a rate of 439,000.

The full report is available on the Commerce Department website.

With Donald Trump As President, What’s Next For The Construction Industry?

Republished from, November 9, 2016. Written by Emily Peiffer.

The race is over: Republican candidate Donald Trump will be the 45th president of the United States. 

Although that looming question has been resolved — after Trump defied pollster predictions — the impact of the next administration on the construction industry is still unknown.

On the positive side, experts have predicted the end of a tumultuous election cycle would mean good news for the construction industry, as uncertainty surrounding the election has led some developers and owners to delay new major projects as they have waited to see how the economy will respond after the race ends.

However, the economy — tied closely to the strength of the construction industry — could suffer as the Dow futures index plunged when Trump started winning key battleground states late Tuesday night and early Wednesday morning. Financial experts have expressed concern regarding Trump’s repudiation of major trade agreements.

Now, the industry must wait to find out whether Trump will fulfill his campaign promises to boost infrastructure spending and slash regulations that can increase building costs.

Trump revealed his $1 trillion infrastructure plan in October. His team said the program would be largely funded through private investment, with tax credits going to investors willing to put up an equity stake in revenue-generating projects like toll roads, airports and utilities.

Although construction industry insiders have been skeptical that either candidate would be able to pass any massive bill considering the divisive nature of this election cycle, the fact that the House, Senate and presidency are all held by Republicans could result in a wave of new measures.

Brian Turmail, senior executive director of public affairs for the Associated General Contractors of America, said Wednesday morning that the results demonstrate that Americans want a change in Washington, as they are “fed up with the growth of the regulatory state” and “tired of policies that discourage job creation.” He said the AGC looks forward to working with Trump and Congress to “advance new infrastructure investments” and find ways to fund them.

On the housing side, Trump has promised to slash regulations in an effort to give the housing industry a boost, pointing to high building costs and low homeownership rates. Other than cutting regulations, however, Trump hasn’t revealed other plans for housing policy and reform. 

After Trump clinched the race, National Association of Home Builders Chairman Ed Brady congratulated him and said in a release that the NAHB “looks forward to working in a bipartisan manner with the incoming administration and Republican and Democratic congressional leaders to tackle critical issues facing the housing industry.”

Strong Showing For 55+ Housing Market

Republished from, November 3rd, 2016.

Builders report that the single-family 55+ housing market is holding strong in the third quarter, according to the NAHB 55+ Housing Market Index (HMI) released today. The index had a reading of 59, up two points from the previous quarter and the 10th consecutive quarter with a reading above 50.

“Builders and developers tell us that business is solid right now and they expect that trend to continue through the rest of the year,” said Jim Chapman, chairman of NAHB’s 55+ Housing Industry Council and president of Jim Chapman Communities in Atlanta.

There are separate 55+ HMIs for two segments of the market: single-family homes and multifamily condominiums. Each measures builder sentiment based on a survey that asks if current sales, prospective buyer traffic and anticipated six-month sales for that market are good, fair or poor (high, average or low for traffic). An index number above 50 indicates that more builders view conditions as good than poor.

Two of the three index components of the 55+ single-family HMI posted an increase from the previous quarter: Present sales increased two points to 63, and traffic of prospective buyers rose five points to 47. Meanwhile, expected sales for the next six months dropped four points to 65.

The 55+ multifamily condo HMI rose one point to 48. The index component for present sales increased two points to 51, expected sales for the next six months fell three points to 51, and traffic of prospective buyers remained even at 38.

All four indices tracking production and demand of 55+ multifamily rentals decreased in the third quarter. Present production fell three points to 48, expected future production decreased seven points to 49, current demand for existing units dropped nine points to 59, and future demand fell eight points to 59.

“The 55+ housing market continues on a steady path toward recovery, much like the overall housing market,” said NAHB Chief Economist Robert Dietz. “Older home owners are able to take advantage of low mortgage rates and rising home prices, enabling them to sell their current homes and buy or rent a home in a 55+ community.”

For the full 55+ HMI tables, visit

2016 NAHB Home for Life Award Winners

Republished from Remodeling Magazine October 26th, 2016. Written by Helena Okolicsanyi.

The National Association of Home Builders this month announced the winners of its annual Homes for Life Awards competition. The award recognizes “excellent remodeling work for aging-in-place and universal design” in two categories: Major Space and Single Space.

The winner for Major Space was Nancy Schnur, owner of Interiors LLC in Kailua, Hawaii. Schnur’s client has spent most of their life bound in a wheelchair and for years was having a difficult time finding the right contractor to fit her needs. That is, until Schnur came along. Schnur lowered the counter heights, created a roll-in shower, and created storage space on wheels. The result is an aging-in-place kitchen area fit for a wheelchair with a sleek design.

The winner for a Single Space was Barb Mueller, owner of Designs Anew in Houston. Mueller was tasked with designing a space for an older couple with very limited mobility. The wife wanted to continue developing her passion for cooking and so the design centered around making appliances accessible and easy to use. The wife was also mobile through a scooter and needed a less-tight space to maneuver around the kitchen.

Measuring the scooter in motion, the aisles were planed at 48inches on each side of the island and 60inches between the main countertop and the island. This provides a good turning radius for the scooter to easily move around the space. The kitchen now has updated appliances including, but not limited to: a shallow pantry, a countertop that was relocated to the island, an oven with a two-hinged door with base cabinets, drawers for dishes and glasses, and much more.

In a blog post from the NAHB, Remodelers Chairman Tim Shigley said,

The Homes for Life award-winning projects exemplify innovative home design that prioritizes safety and style. Certified Aging-in-Place Specialists are trained to transform a house into a home for a lifetime with custom solutions for any age and ability.