Builders Reveal Top 10 Biggest Concerns

Builders Reveal Top 10 Biggest Concerns
National Association of Home Builders   article by Daily Real Estate News | January 17, 2018

House Construction 103Homebuilding is still falling short in many markets in alleviating the shrinking inventories of homes for sale. But builders are blaming the construction shortfall on several factors.

Builders revealed the following top 10 “significant” problems they expect to face in 2018, according to the National Association of Home Builders and Wells Fargo Housing Market Index:

  1. Cost/availability of labor: 84%
  2. Building material prices: 84%
  3. Cost/availability of developed lots: 62%
  4. Impact/hook up/inspection or other fees: 60%
  5. Local/state environment regulations and policies: 45%
  6. Inaccurate appraisals: 42%
  7. Federal environment regulations and policies: 42%
  8. Difficulty obtaining zoning/permit approval: 42%
  9. Gridlock/uncertainty in Washington making buyers cautious: 42%
  10. Development standards (parling, setbacks, etc.): 38%

Once again for 2018, builders said the cost and availability of labor is their chief concern. The number of builders who are reporting this as a problem is growing. In 2017, 82 percent of builders said cost and availability of labor was their top concern; the percentage has grown to 84 percent of builders heading in 2018.

The availability of labor started growing as a problem among builders since 2011. In 2011, just 13 percent of builders rated labor as a significant problem, but by 2012, the percentage jumped to 30 percent and has ever since continued to increase each year.

“Both the availability of labor and lots highlight the expected constraints of a recovering housing market,” the NAHB reports.

Source: “Building Materials Prices and Labor Access Top Challenges for 2018,” National Association of Home Builders’ Eye on Housing blog (Jan. 16, 2018); REALTOR® Magazine Online, Daily Real Estate News 011718

Mortgage Rates Ring in New Year With a Dip

Mortgage Rates Ring in New Year With a Dip
Freddie Mac   article by Daily Real Estate News | January 5, 2018

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Borrowers kicked off 2018 with a mortgage rate drop. The 30-year fixed-rate mortgage is now down a quarter of a percentage point from a year ago.

“Treasury yields fell from a week ago, helping to drive mortgage rates down to start the year,” says Len Kiefer, Freddie Mac’s deputy chief economist. “The 30-year fixed-rate mortgage fell four basis points from a week ago to 3.95 percent in the year’s first survey. Despite increases in short-term interest rates, long-term interest rates remain subdued.”

The spread between the 30-year fixed-rate mortgage and five-year hybrid adjustable-rate mortgage is at the lowest since 2009, Kiefer says.

Freddie Mac reports the following national averages with mortgage rates for the week ending Jan. 4:

  • 30-year fixed-rate mortgages: averaged 3.95 percent, with an average 0.5 point, dropping from last week’s 3.99 percent average. Last year at this time, 30-year rates averaged 4.20 percent.
  • 15-year fixed-rate mortgages: averaged 3.38 percent, with an average 0.5 point, dropping from last week’s 3.44 percent average. A year ago, 15-year ARMs averaged 3.44 percent.
  • 5-year ARMs: averaged 3.45 percent, with an average 0.4 point, falling from last week’s 3.47 percent average. A year ago, 5-year ARMs averaged 3.33 percent.

Source: Freddie Mac; REALTOR® Magazine Online, Daily Real Estate News 010518