The 51st Annual Parade of Homes was June 2, 3, 5, 7, 9 and 10 and The 21st Annual Remodelers Parade was June 2 and 3. 2,700 visitors toured the new homes with an average of 1,000 visitors per home. The Remodelers had record attendance with an average of over 250 visitors per home. A digital edition of the Parade of Homes magazine will be on the Parade website soon! You can click on the Magazine cover below for a copy...
Read More »New Democrat Coalition Calls for Building Millions More Housing Units Filed in Capitol Hill, Codes and Regulations by NAHB Now on June 6, 2018 • The New Democrat Coalition, a group of moderate House Democrats, has released a white paper seeking to find a solution to chronic problems facing the housing industry. The report, Missing Millions of Homes, says its goal is clear: “We need to build millions of more housing units.” “NAHB commends the work of the New Democrat Coalition Housing Task Force to seek solutions to the nation’s housing affordability and shortage woes,” said NAHB Chairman Randy Noel. “Housing construction creates jobs, contributes to the tax base and is important for a strong and healthy economy. We look forward to working with Democratic and Republican leaders on Capitol Hill to find solutions that will help builders construct sorely needed affordable housing units for hard-working American families.” In crafting the document, the New Democrat Coalition worked closely with NAHB and Democratic lawmakers relied heavily on our research and data that we provided them. While the white paper notes that lawmakers need to continue to flesh out and develop full policy recommendations, the document listed the following factors that are among the causes of a housing construction shortfall: Zoning and land-use regulations are slowing and restricting building of housing. Demand has shifted to walkable transit-served urban areas, which are in short supply. Construction funding is less available in the aftermath of the financial crisis. Construction labor is not getting more productive and the labor pool is not increasing. NAHB believes the following steps need to be taken to help address current problems in the housing market and boost new home and apartment construction: Reduce burdensome regulations that add up to 25% of the cost of a new home. Enact a long-term trade agreement with Canada that will ensure American home builders and consumers have access to a reliable supply of lumber at reasonable prices. Increase the domestic supply of timber from public lands. Promote workforce development. Update the nation’s inefficient zoning and land-use laws. The New Democrat Coalition’s white paper represents an important step forward in keeping housing issues at the forefront on Capitol...
Read More »Filed in Economics, Multifamily by NAHB Now on May 9, 2018 • 0 Comments It’s not just home buyers who are concerned about rising home prices. Affordability is also a big concern for a significant number of renters — many of whom have limited housing options despite earning decent incomes. “Even for double-income households of people working full time and earning competitive wages — including teachers, social workers, child care specialists and so on — many are struggling to afford the median rental apartment in their particular city,” said Jamie Smarr of The NHP Foundation. Using funds dedicated to workforce housing projects, investors and developers brought to life the Pines at Carolina Place in Pineville, N.C. In fact, there is nowhere in the United States where a person working a full-time minimum wage job can afford to rent a market-rate two-bedroom apartment, according to the National Low Income Housing Coalition. One solution is to increase the amount of what many refer to as “workforce housing” — rental housing that is affordable to households earning 80% or less of that area’s median income. The majority of such developments are garden-style rentals with slightly fewer amenities, but they provide a higher-quality home than the alternative. “To live within their means, renters — especially those in high-cost markets — are often relegated to substandard housing that is poorly maintained and could potentially cause various health issues,” Smarr said. “And for those who allocate too much of their income toward housing expenses, they’re deprived of the opportunity to invest in other things such as education, retirement or a downpayment on a home.” Smarr acknowledges that developing solutions is not easy. But to illustrate how some cities across the country are taking action, he said several have developed local housing trust funds to provide financing for building or renovating housing that will be more affordable to workers earning lower wages. He’s also seen a number of socially conscious investors committed to raising housing equity and acquisition funds, such as the Low Income Investment Fund (LIIF), specifically dedicated to investing in workforce housing opportunities. One such development is a 200-unit rental property in suburban Charlotte, N.C. The Pines at Carolina Place was financed with a Fannie Mae loan and LIIF workforce equity fund, and now provides affordable homes to a large community of residents, many of whom work at local hospitals, malls and call centers. “Most of the builders I’ve worked with over the years are driven to provide housing opportunities that support strong families and economic growth,” Smarr said. “But many of the mayors, council people and state legislators we speak to have very little awareness of the lack of workforce housing around the country. “I always encourage builders to mention the struggles of workforce housing and the need for more state and local support, because this is an issue that isn’t going to be...
Read More »By Robert Dietz on March 15, 2018 • Builder confidence in the market for newly-built single-family homes edged down one point to a level of 70 in March from a downwardly revised February reading on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This is the fourth consecutive month at or above a level of 70 for the HMI, an indication of strong single-family housing market conditions. Builders’ optimism continues to be fueled by growing consumer demand for housing and confidence in the market. A strong labor market, rising incomes and a growing economy are boosting demand for homeownership even as interest rates rise. However, builders are reporting challenges in finding buildable lots, which could limit their ability to meet this demand. Managing construction costs and future sales prices will be a key challenge in medium-term as costs associated with both land development and home construction continue to increase. Nonetheless, with positive economic fundamentals in place, the single-family sector should continue to make gains at a gradual pace in the months ahead. Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index 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. The HMI component gauging current sales conditions held steady at 77, the chart measuring sales expectations in the next six months dropped two points to 78, and the index gauging buyer traffic fell three points to 51. Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 57, the South decreased one point to 73, the West fell two points to 79, and the Midwest dropped four points to 68. The HMI tables can be found...
Read More »HERS Amendment Puts Smaller Homes on Level Playing Field Filed in Codes and Regulations by NAHB Now on April 3, 2018 • The RESNET Standards Development Committee has approved an amendment that puts smaller homes on equal ground in terms of achieving a lower — or more efficient — Home Energy Rating System score. Historically, smaller homes have been disadvantaged relative to the HERS Index ratings for average and larger homes. Stakeholders seem pleased with the amendment, which incorporates a house size adjustment factor so that calculations are more accurate and result in a score that better reflects energy savings no matter the square footage. “I am in favor of the change,” said Thom Marston, regional manager at Energy Services Group, a Maryland-based residential energy conservation company. “Anything that brings the standard to parity between small and large homes should be applauded. No building should have an unfair advantage over another.” RESNET Executive Director Steve Baden says that the accredited HERS software programs used to calculate the scores must implement the change by July 1. All HERS raters must use the new version by Jan. 1, 2019, giving raters a transition period. RESNET plans to submit the amendment for the 2021 IECC codes cycle so the code will reference the updated standard. For additional information about NAHB high-performance building initiatives, contact Jaclyn Toole at 800-368-5242...
Read More »Pass-Through Income: What if You Have More? Filed in Economics, tax reform toolkit by NAHB Now on March 27, 2018 • 0 Comments Earlier this month, a Tax Reform Toolkit post explained the basics of the new 199A 20% deduction for pass-through income. It focused on how the deduction works for a taxpayer who has less than $315,000 of taxable income, is married and filing jointly (or $157,500 in income if single). In general, these taxpayers may deduct 20% of their pass-through income from their adjusted gross income before calculating their tax liability. Individuals and families above these thresholds, however, must calculate their deduction using the W-2 wages paid to employees of, and the depreciable property held by, their business. These wage and property rules are phased in between $315,000 and $415,000 in taxable income for married couples filing jointly (and half those amounts for single taxpayers). But what happens if the limitations are fully phased in: the taxable income is greater than $415,000 for married filing jointly, or $207,500 for filing singly? ‘Need-to-know’ numbers At these higher income levels, taxpayers must know three amounts before they can calculate their allowable deduction: W-2 wages paid to employees The prices paid for all depreciable assets owned by the pass-through Taxable income—defined as income less deductions except for 199A With these in hand, the taxpayer can calculate the maximum allowable deduction using the following two methods: Method 1. Multiply the amount of W-2 wages paid to employees (or your share of wages paid if you are one of multiple shareholders or partners) by 50%. Call this maximum allowable deduction ‘A’. Method 2. Multiply W-2 wages paid by 25%. Call this amount (i). Add up the prices paid for all assets currently being depreciated (note this is done on a cost basis rather than using the value of assets after depreciation). Now, multiply the cost of depreciable assets by 2.5%. Call this amount (ii). Add (i) and (ii) and call the sum “maximum allowable deduction ‘B’.” Now apply the “lesser of” rule, which states that your maximum allowable deduction is equal to the lesser of: The greater of A or B, or Taxable income multiplied by 20%. Let’s take an example. Randy has $600,000 in qualified business income — representing all of his household’s income—and would ideally like to take a deduction equal to 20% of that, or $120,000. He also plans on taking $100,000 in itemized deductions. In 2018, Randy’s pass-through business: Pays $200,000 in W-2 wages Owns $1 million of qualified depreciable property Because he is above the income threshold, he must use methods 1 and 2 to calculate his maximum allowable deduction before applying the “lesser of” rule. Now Randy applies the “lesser of” rule using 20% of his taxable income. Because he has $600,000 in income and takes $100,000 in deductions, Randy’s taxable income for these purposes is...
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