BUILDER north coast building industry association
Table of Contents On the Cover
NEWSLETTER
North Coast Building Industry Association (NCBIA) BUILDER newsletter is the official newsletter of the NCBIA and is published monthly by the NCBIA. The NCBIA is an affiliate of the Ohio Home Builders Association (OHBA) & the National Association of Home Builders (NAHB).
NCBIA Office
5201 Waterford Dr., Sheffield Village, OH 44035 Ph: 440.934.1090 Fax: 440.934.1089 info@ncbia.com www.ncbia.com
Executive Officer - Judie Docs judie@ncbia.com
30-31
4
Welcome New Members
Promotions, Marketing & Creative Director - Kelli Moss kelli@ncbia.com
2017 NCBIA Officers
President - Chris Majzun Jr., Majzun Construction Co. Vice-President - Jeff Hensley, Lake Star Building & Remodeling Associate VP - Liz Schneider, Dollar Bank Treasurer - Steve Fleming, Shamrock Development Secretary - Jeremy Vorndran, 84 Lumber Company Immed. Past President - Mary H. Felton, Fidelity National Title
2017 NCBIA Board of Directors
Thank You For Renewing
9
12
5
Sales & Marketing Ideas Launches New App
6
Legislative Review
7
Workers Comp Updates
8
OHBA Summer Board Meeting
10
Executive Officer’s Report
11
Board of Directors Nominations
12
Golf Classic
13
Night at the Crushers
14
Mobile Apps for Home Builders
17
Spike Update
19
NCBIA Branding Campaign
22
NCBIA Family Picinic
24
Mortgage Rates Falling
28
2017 NAHB & OHBA Directors These are our members who represent our local industry in Washington DC and Columbus.
Ashley Caruso-Noe, Caruso’s Cabinets Mark Craig, Mark F. Craig, Esq. Chris Husted, Prete Builders Sara Majzun-Garwood, BCT Alarm Services, Inc. Keith Martin, MBD Homes Timothy McLaughlin, CFP®, Wells Fargo Advisors, LLC Shannon Niebes, Integrated Restoration Michelle Nowlin, First Federal Savings of Lorain Tom Sear, Ryan Homes Tyler Yost, Dale Yost Construction
2017 NAHB Directors Mary H. Felton, Fidelity National Title Jeff Hensley, Lake Star Building & Remodeling
NAHB Alternate Director
Tom Caruso, Caruso’s Cabinets
Sr. NAHB Life Director & Ohio’s State Rep. to NAHB
NCBIA Life Directors
Randy Strauss
Strauss Construction
1975
Dan Strauss
Strauss Construction
1996
OHBA Past Presidents
Tom Caruso, Caruso’s Cabinets Mary H. Felton, Fidelity National Title Jeff Hensley, Lake Star Building & Remodeling Tom Lahetta, Tom Lahetta Builders, Inc. Chris Majzun Sr., Majzun Construction Co. Chris Majzun Jr., Majzun Construction Co. Randy Strauss, Strauss Construction Bob Yost, Dale Yost Construction
Dan Strauss 1975
Randy Strauss 1996
2017 OHBA Trustees Mary H. Felton Liz Schneider Keith Martin
Fidelity National Title Dollar Bank MBD Homes
OHBA Alternate Trustee
Advertising Policy - The North Coast Building Industry Association reserves the right to reject advertising in the Builder newsletter based on content. Acceptance of advertising does not imply endorsement of the product or service advertised.
SMC visits St. Jude Dream Home
Letter from the President
NCBIA Staff
july 2017
Cover Story:
OHBA Update
Tom Ostrander Tom Lahetta
84 Lumber Company Tom Lahetta Builders & Remodelers, Inc.
OHBA Area 2 Vice-President Mark Zolllinger
www.ncbia.com
Zollinger Builders
page 3
A Letter from the President by Chris Majzun, Jr., Majzun Construction Co.
Young Professionals, Our Next Generation Recruiting and engaging the next generation of members is vital to the strength of every association. It is especially important in the building industry, as family businesses pass from one generation to the next and new technologies influence building systems bringing the industry forward into the next century. At some point, every young professional who is involved in their local association has experienced or witnessed a new member walking into their first general membership meeting. Normally, the new member is attending a meeting where they are among attendees who have already established relationships with others in the group, and have even perhaps, been working with them for years. This can be intimidating. Often, the new young member can be found sitting at a half-filled table at the back of the room, alone, and unsure about the purpose of the meeting. This first impression will most likely impact their decision to attend the next meeting. A young professionals (YP) group is designed to be a less intimidating entry point for future and/or less active young professional members. A YP group is smaller and allows the new member to build relationships with peers in a comfortable and unassuming environment.
The NCBIA took the first step at recognizing the value of Young Professionals, by forming a Young Professionals committee in 2017. The Committee was given a charge to identify and develop strategies to recruit, retain and engage young professionals in the housing industry, and encourage members 35 and under to get involved. The Young Professionals Group has the potential to help the NCIBA in addressing the issue of an aging membership and conversion of younger professionals and builders into industry experts. The focus includes: • To help meet the needs of younger members, such as developing new services that would be beneficial to the organization in serving the needs of the young professional members. • To enhance and develop the member experience as it relates to younger members. • To generate insight on current programming including mentorship, leadership training, and entrepreneurial and general education needs for emerging industry professionals. • To develop strategies to support student chapters in their transition to an industry professional upon graduation.
It’s common for more established members to mistakenly label young professionals’ groups as happy hour groups. The reality is that young professionals are movers and shakers who are eager to put plans into action. It just also happens that a happy hour can be a great way to break the ice, network and put all those ideas on the table.
Although the Young Professionals Group is targeted at members 35 years of age and under, it is intended to also bridge the divide that sometimes exists between the younger and older members within the association. The variety of Young Professional events and the new relationships built will be rewarding as well as fun and relaxing.
Ultimately, self-governance and mentorship are the most important characteristics of an attractive and successful YP group with lasting momentum.
Our Young Professionals committee has quickly grown and is an active committee which has in turn increased participation at events as well as having inspired new ones. Engaging with our new committee is important because they are energizing, creative and innovative. They are eager in making a positive impact, and we should embrace their vitality and enthusiasm.
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If you have an employee 35 and younger they can join this group as an affiliate for $50 through August 31st. I am confident that the NCBIA, your company and they will benefit by their involvement. (An application is included in this newsletter.) If you would like to know more about this committee you can contact Sara Majzun-Garwood, Chair at sara.majzun@security-ohio.com. Coming up August 24th the Young Professionals is hosting a Night at the Crushers on the Kleinhenz Diamond Deck at Sprenger Stadium. (See flyer in this newsletter.). Hope to see you there!
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www.ncbia.com
july 2017
OHBA Update by Vincent J. Squillace, CAE, OHBA Exec. VP
OHBA AT THE MID-YEAR MARK - We recently concluded our summer meeting of the board of trustees. As usual, the meeting produced what we normally find; a committed leadership team, interest in learning about the many items with which we are involved, fellowship, and a glimpse at to what the future may hold.
Ohio participate in our effort to serve all. While the market is making gradual effort in striving to reach starts activity from past years, our commitment is as strong as when record levels of activity occurred and Ohio was an economic leader.
Give thanks for this level of commitment to your leaders who so unselfishly give of themselves to assure a strong and effective OHBA working for you. Despite a soft economy the members are still at the forefront of As you know, we are a part of the NAHB federation. We are committed to keeping the association strong and effective. This commitment extends act in an advocacy role, on your behalf, encouraging affordable housing into the future so to provide a strong foundation for a viable industry opportunities before the state government. Along with our national and effort for the years to come. local partners we are energized to act on your behalf in a variety of ways. OHBA is your advocate before state government. We have been leading that role for more than sixty years. Our achievements have been significant yielding billions of dollars benefiting the industry and the public in increased affordable housing opportunities. Our market is the state of Ohio. Builders and associates from across
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july 2017
www.ncbia.com
page 5
Sales & Marketing Ideas Launches App
Dive into sales methodology, read Tech Zone columns about the latest advances in marketing automation and explore a wealth of knowledge, anywhere you go.
Support your community.
Downloading the App The app is available on the Apple App Store and Google Play Store for Android. Search the keyword “NAHB,” then select “GET” and enable notifications. You will only receive notifications when new content is available, or when there is an occasional important announcement.
Shop local businesses.
Local business owners have been counting on Town Money Saver to help grow their businesses since 1992. We are proud to be your hometown coupon magazine.
Sales + Marketing Ideas magazine is published by NAHB and is the premier magazine for sales and marketing ideas for the housing industry. Each issue has valuable ideas and insights on sales and marketing trends, market research, advertising, marketing plans, model merchandising, sales management and more. Articles are written by the top experts in new home sales and marketing. Have a question or want more information about the Sales + Marketing Ideas app? Contact Anne Ladewig.
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www.ncbia.com
july 2017
2017 Legislative Review - Legislative Wrap-Up After passing out the conference committee report and sending HB 49 to the Governor last week, the House returned this week with votes to override several provisions vetoed in HB 49 by Governor Kasich. The House voted to override a total of 11 vetoes, including nine that deal with Medicaid. The Senate anticipates its return over the summer months to also take up potential veto overrides. Its calendar has not yet been set. While the House wrapped up the Budget bill (HB 49), it also acted on several other items of interest further detailed below. HB 213 - REAL ESTATE APPRAISERS (Dever, J.) To change the definition of “appraisal” for purposes of the Real Estate Appraiser Licensing Law, to make changes to certain procedures and the exceptions to licensure under that law, to regulate appraisal management companies, and to declare an emergency. During sponsor testimony, Rep. Jonathan Dever (R-Cincinnati) explained the bill would bring Ohio into compliance with federal law regarding appraisal management companies (AMC), referencing minimum standards under Dodd Frank. According to both the sponsor and stakeholders pushing the bill, language is required for Ohio lenders to continue to be able to use AMCs to facilitate Federally Related Transactions in our state. HB 213 passed the House 82-8 and has been referred to the Senate Government Accountability and Oversight committee.
application of the current Mortgage Loan Law to unsecured loans and loans secured by other than residential real estate. As explained by the sponsor and proponent testimony given by the Ohio Mortgage Bankers Association, the bill responds to confusion arising from examiners’ interpretations of the current law. The proposal specifies that all mortgage loans - both first and second liens - secured by residential real estate would fall under a single section (ORC 1322) of the law, rather than a different section (ORC 1321) that would cover loans secured by non-real estate collateral and unsecured loans. The bill would have mortgage bankers and mortgage brokers secure licenses under ORC 1322, eliminating a mortgage banker exemption and giving the Division of Financial Institutions authority over all mortgage bankers and mortgage brokers. HB 199 passed the House 67-17 and has been referred to the Senate Insurance and Financial Institutions Committee. HB 69 - TIF DISTRICTS (Cupp, B.) To require reimbursement of certain township fire and emergency medical service levy revenue forgone because of the creation of a municipal tax increment financing district.
HB 69 amends existing Tax Incremental Financing Law to add township fire, emergency medical and ambulance levies to the list of specialpurpose levies. HB 69 gives townships the choice of collecting the reimbursement, waiving it, or negotiating a partial reimbursement of the money the levy would have raised but for the TIF. The bill only HB 199 - MORTGAGE LENDING (Blessing, L.) To create the Ohio applies prospectively and to TIFs created by municipal corporations Residential Mortgage Lending Act for the purpose of regulating all non- where townships provide the fire, emergency, or rescue services. HB depository lending secured by residential real estate and to limit the 69 passed out of the House, and has been referred to the Senate Ways and Means Committee. HB 69 will likely be heard when the legislature returns in the fall. Please feel free to contact OHBA with any questions.
Out and About with Our Members
We love to see our members out and about supporting the other local associations that they love, as well as the NCBIA! Shown here are members from Caruso’s Cabinets and First Federal Savings of Lorain on the Lorain County Chamber’s Jet Express Excursion in June. We all had a wonderful night on the Lake. july 2017
www.ncbia.com
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Job Growth Helps Propel Housing Demand
Despite growing supply-side concerns, housing demand continues to be sustained by healthy job creation and optimistic consumers. The Bureau of Labor Statistics reported that 220,000 jobs were created in June, with the unemployment rate increasing slightly to 4.4%. Moreover, home builders and remodelers added almost 116,000 jobs over the last 12 months.
single-family home builders reporting shortages of framing lumber has increased to 21%.
Ongoing job creation has also helped support consumer optimism. The Consumer Confidence Index was up slightly in June, with one sub measure increasing to nearly 33% of respondents indicating jobs are plentiful. Incomes are also rising, with disposable personal income up 2.2% over the last year.
–NAHB Chief Economist Robert Dietz
Economic challenges remain anchored on the supply side of the market, with a new softwood anti-dumping duty — in addition to existing countervailing duties — adding to builder costs. Moreover, the share of
Workers Comp Updates!!! The payroll True-up period for private employers began July 1, 2017.
For a midyear housing and economic market check, watch our construction forecast webinar, featuring NAHB’s forecast and commentary from Moody’s Mark Zandi and NAR’s Danielle Hale.
Members save up to 20% off* standard pricing
Plus, free site assessment and free cost comparison
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Payroll true-up reports are due to BWC no later than Aug. 15, 2017. At the end of each private employer policy period (July), it is necessary to reconcile estimated payroll with actual payroll. This is called the Trueup. This report can be completed online at: http://ow.ly/4mWUlm or over the phone by calling 1-800-644-6292. This payroll True-up process is part of prospective billing, and as a result, Ohio businesses are required to reconcile their actual payroll annually for the prior policy year and also reconcile any differences in premium paid. According to BWC, the True-up allows more accurate premium calculation. Even if actual payroll for the year matches the original BWC estimate or a business had zero payroll, the True-up report must be completed. The quickest and easiest way to True-up is online with a BWC e-account. If you do not have a BWC e-account you can create one by signing on to: https://www.bwc.ohio.gov/SelfSvcAccountAdmin/newacc.asp. You can also complete the True-up through the BWC call center however wait times may be extremely high, as a result BWC encourages the use of their online reporting system. IMPORTANT NOTE: Again, August 15, 2017 is the due date for your True-up report to be completed with BWC. This is a critical deadline, as the BWC has indicated that if a business does not complete the True-up timely, they may not be eligible for current, and future alternative rating and premium discount programs such as Group Rating and Group Retrospective Rating. Once more, reports must be submitted either online at (http:// ow.ly/4mWUlm) or by phone at 800.644.6292. Below are a couple of youtube video links that you may find helpful in the process: https://youtu.be/dmYEtuGLEnQ https://youtu.be/YMaslG0eq-M page 8
Call 713–967–6214 or visit eMemberBenefits.com/NAHB to enroll and a G&K representative will contact you.
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www.ncbia.com GK ads for NAHB FINAL.indd 2
july 2017 12/10/15 12:01 PM
Welcome New Members
Paul Klein (Primary) 216-777-3693 Cleveland Magazine Sponsor: Jason Scott, North Star Builders
Kelsey Manning L.E. Scott Electrical 440-356-7450 Sponsor: Larry Scott, L.E. Scott Electrical
David Dragich (Affiliate) (216) 377-6347 Cleveland Magazine Sponsor: Paul Klein, Cleveland Magazine
Jerry Stinson Shamrock Development Company 440-926-3950 Sponsor: Steve Fleming, Shamrock Development Company
Jeff Lowman (Primary) Commstar Credit Union 440-420-4245 Sponsor: Chris Majzun Jr., Majzun Construction
Catherine Schuster Spitzer Management 440-323-471 Sponsor: Steve Fleming, Shamrock Development Company
Mark Patterson (Affiliate) Commstar Credit Union 440-545-2036 Sponsor: Sara Majzun-Garwood, BCT Alarm Services, Inc.
Dan Ketcham The Morning Journal/Adtaxi 440-219-0713 Sponsor: Chris Husted, Prete Builders
Charlotte Chouinard Howard Hanna 440-387-8637 Sponsor: Linda LaFleur, Howard Hanna
Andrew Robins Third Federal Savings 216-314-0322 Sponsor: April Tecco, Third Federal Savings
Jacob Glatz Howard Hanna 440-453-9343 Sponsor: Linda LaFleur, Howard Hanna
july 2017
www.ncbia.com
page 9
OHBA Summer Board Meeting - Dayton, OH OHBA Members and Directors met in June for the Summer Board Meeting. Shown here are Senior NAHB Life Director & Ohio’s State Representative to NAHB, Randy Strauss from Strauss Construction and OHBA Executive VicePresident, Vince Squillace. Be sure to keep up with everything going on with your state association by checking in on our blog every day. Go to www.ncbia.com and then click on Industry News to read everything that is important from State and National associations. If you are interested in being involved in government affairs on a local level, contact the NCBIA and let us know. Email Judie Docs at judie@ncbia.com or call the office at (440) 934-1090.
NEW HOME BUYERS LIMITED WARRANTY BOOKS NOW AVAILABLE Warranty book Updated and Available FOR ONLY $20 EACH! In a binder so you can include other walkthrough documents, warranties, etc.
Email your order to kelli@ncbia.com or call the NCBIA Office at (440) 934-1090 page 10
www.ncbia.com
july 2017
Executive Officer’s Report
by Judie Docs, CSP, MCSP, MIRM, CMP, CGP
NAHB has New Resources Help You Recruit Skilled Labor - NAHB wants to make sure that there are plenty of employment opportunities for young people interested in the home building industry – and that young people continue to be interested in pursuing a career building the homes of tomorrow. The association does that through its support of HBI, the workforce development arm of NAHB and its career-building programs including Job Corps, Pre-Apprenticeship Certificate Training (PACT) and Residential Construction Superintendent Certification. NAHB also supports and advocates for local, state and federal funds used to support industry-sponsored and validated programs that have been proven to be successful: The Job Corps and PACT programs are cost-effective means of providing training and employment opportunities to individuals who are unable to compete in the labor market and of supplying the construction industry with a source of well-trained and motivated workers.
and misperceptions of the industry. HBAs and members can help their communities grow and prosper, while educators can direct their students toward meaningful employment and career choices. Access these resources to help raise awareness about the labor shortage issue, to educate the public about job opportunities in the trades and to recruit the next generation of skilled labor in the housing industry. The new salary data are promoted in the following resources: • State Wage and Workforce Demand Data: State-specific data, including the annual average wages in construction and the projected workforce demand by state and for the top 100 metro areas.
In addition, NAHB has a vibrant, healthy student chapters program for both high school and college-age youth, sponsors the Residential Construction Management Competition at the International Builders’ Show, and looks for opportunities to showcase home building careers. Policy Statement NAHB strives to promote positive working relationships between state and local HBAs and career and technical education institutions to promote and advance careers in the home building industry. Why It Matters Ensuring a consistent, reliable influx of new workers is important in an industry that is continuing to grow. NAHB members are passionate about their trade and professions. Nothing is more rewarding than being able to provide a home of one’s own to a young family. NAHB members also derive personal and professional satisfaction from mentoring construction management students in college programs and the budding carpenters, roofers and others interested in the trades. NAHB continues to update its members-only Skilled Workforce Development Resources to help you recruit skilled labor and spread the word about the valuable careers available in residential construction. NAHB economists recently analyzed the latest salary data from the U.S. Bureau of Labor Statistics to provide HBAs and members with updated information about their local residential construction labor market. NAHB is partnering with educators, members and state and local HBAs to address the housing industry’s labor shortages and to develop a skilled workforce for the future. A collaborative effort that reaches policymakers as well as local educators and high school students can be an effective way to address some of the issues that have contributed to chronic labor shortages july 2017
If you would like to be a part of our Workforce Development Committee which includes our Student Chapter from the Carpentry Department of the Lorain County JVS, please contact its’ chair, Tyler Yost, Dale Yost Construction at tyler.dyc@gmail.com.
www.ncbia.com
page 11
Thank You for Renewing Your Membership 84 Lumber Company – Tom Ostrander
ATTENTION: NCBIA PRIMARY MEMBERS Step Up - Step Out - Let Your Voice Be Heard Nominations are now being taken for the North Coast Building Industry Association Board of Directors seats that need to be filled. Four 3-year directors, one 2-year director and one 1-year director seats are available (commitment beginning January 1, 2018). Those considering a position should be able to attend ALL board meetings that are held the second Wednesday of every other month.
B.W. Plumbing – Kenneth Hutman BCT Alarm Services, Inc. – Sara Majzun-Garwood Bott Law Firm, LTD. - Joe Bott Carter Lumber Company – John Howard
Don’t be afraid to nominate yourself!!!!!
Carter Lumber Company – Jason Palmer
If you are interested in running for one of these open positions, please contact Executive Officer, Judie Docs at judie@ncbia.com or (440)9341090.
Howard Hanna – Kathie Craig Lapos Construction, Inc. – Mike Lapos
Lumber Tariffs Threaten Thousands of U.S. Jobs, Raise Housing Costs
Murello, Inc., - Terry Murello NSN Construction, Inc. – Nick Nardo Northern Ohio Basement Waterproofing, Inc., - Paul Goldsmith Norwalk Concrete Industries – Beth Fritz R. E. Rice, Inc. – Richard Rice
In a move that will raise housing costs and price countless American households out of the housing market, the Commerce Department on June 26 imposed a preliminary 6.87% anti-dumping duty on Canadian lumber imports on top of the 19.88% countervailing duties announced in April. In an official statement, NAHB Chairman Granger MacDonald said that the combined duties are “basically another tax on American home builders and home buyers that will jeopardize affordable housing in America.”
Related Construction, Inc. – Nicholas Penick Slager Painting, Inc. – Tim Slager The Nelson Agency – Theresa Riddell
The 19.88% countervailing duty is intended to compensate for government subsidies that Canadian firms allegedly receive, while the 6.87% anti-dumping duty is intended to bridge a supposed gap between the price that Canadian lumber producers are selling lumber in the U.S. and the “fair market price” determined by the Department of Commerce. Combined, the two duties impose a 26.75% total tariff on Canadian lumber imported into the U.S.
Tom Lahetta Builders, Inc. – Tom Lahetta Tusing Builders Ltd. – Dave Weisenberger Wells Fargo Advisors, LLC – Tim McLaughlin Wickens, Herzer, Panza, Cook & Batista – Phil Truax
Zimmerman Remodeling & Construction., Inc. – Greg Zimmerman In an Eye on Housing blog post, NAHB senior economist Paul Emrath
Our Members Being Recognized by Others Congratulations to our North Coast BIA Membership Chairman, Sara Majzun-Garwood on being chosen as 2017 Rotarian of the Year by The Rotary Club of Amherst. page 12
discusses the impact the duties will have on the housing market and the economy. The analysis shows that the tariffs would boost lumber costs by 8.8% for U.S. consumers and add $1,700 to the cost of a typical single-family home. Further, the annual effects of this tariff in 2017 include a loss of: • 11,336 full-time U.S. jobs • $685.5 million in wages and salaries for U.S. workers • $481.8 million in taxes and other revenue for governments in the U.S. These losses of wages, jobs and taxes are net losses that take into account the increases in wages, jobs and taxes in the domestic sawmill industry. The reduction in jobs is not limited to the construction industry: Jobs are also lost in businesses that sell and transport building materials, provide architecture and engineering services, etc.
www.ncbia.com
july 2017
WE’RE HERE FOR THE LONG HAUL.
2016 RAM 3500 TRADESMAN® LOAD-LEVELING REAR AIR SUSPENSION 1
MAXIMUM 31,210 LB TOWING 2
IMPRESSIVE 7,390 LB PAYLOAD 3
Home builders face a demanding work site—and they demand the most from their work vehicles. That’s why we build Ram trucks to always be ready for the big job and never buckle under pressure. To help your business go the distance, FCA US LLC offers NAHB members, employees and family members a $500 cash allowance on select FCA US vehicles. Stack this offer with our On The Job program to get game-changing cash allowances on vehicle upfit and service. Use your NAHB membership to get the dependable power of Ram trucks and give it everything you need to get your job done. Whether your big job is next month or years away, trust the longestlasting pickup trucks4 to finish strong.
GE T A
$500 CASH ALLOWANCE
MOS T N ATION A L A ND LOCA L
INCENTIVES
ON MANY FCA US LLC VEHICLES.5
UP T O
$1,000 ADDITIONAL VEHICLE BENEFITS6
No-Extra-Charge 2-Year Gas/Diesel Lube-Oil-Filter Allowance
Up to $1,000 Commercial Equipment/Upfit Allowance
Up to $1,000 Commercial Graphics Program Allowance
$300–$1,000 Allowance on Select Mopar® Service Contracts
Visit NAHB.ORG/FCA for more details. FCA US LLC IS A PROUD AFFINITY PROGRAM PROVIDER FOR THE NATIONAL ASSOCIATION OF HOME BUILDERS.
july
1 Available feature. 2 Available Cummins® Diesel when properly equipped. 3 Payload based on available 6.4L gas V8. 4 Based on IHS Automotive VIO registration data for all brands of GVW 1-3 pickup trucks continuously sold in the U.S. since 1988, Dodge and Ram have the highest overall percentage still on the road. 5 Family members must reside in member’s same household. See dealer for allowance and eligibility requirements. 6 Upfit bonus must be used in conjunction with On The Job program. See dealer for On The Job eligibility requirements and offers. ©2017 FCA US LLC. All Rights Reserved. Chrysler, Dodge, Jeep and Ram are registered trademarks of FCA US LLC. FIAT is a registered trademark of FCAwww.ncbia.com Group Marketing S.p.A., used under license by FCA US LLC. Cummins is a registered trademark of Cummins Inc. 2017 page 13
SPO
! T U ! O E L D B L A O L S I A S I V GOLF RE STILL A A S P I H S R O NS
Top 5 Mobile Apps for Home Builders
Planning and overseeing your projects has never been easier thanks to a variety of apps available on mobile devices. These apps can help you more efficiently communicate with superintendents and workers, draw up designs for projects and keep track of dates and deadlines. Here is a quick look at five mobile apps – some are relatively new, others more established – that home builders are using. These apps focus on project, not business, administration. Magicplan, an app geared toward interior design, allows builders to virtually – and accurately – place design elements and appliances in their floorplans. The app uses images and videos from their smartphones to construct the floorplan of the selected space. Magicplan is a solid choice for home builders, designers and others looking for an easier way to create floorplans and imagine design elements and appliances within them. Fieldwire enables construction managers to share floorplans more easily with the rest of their teams, including subcontractors. Fieldwire helps construction managers share assignments and track hours and material costs. It’s a solid project management app for bridging the gap between office staff and workers in the field. LumberCalc focuses specifically on materials cost evaluation. It enables home builders to scan boards and quickly convert their dimensions into
board feet. The app also allows users to calculate order totals after plugging in the MBF price, and enables them to estimate dimensions for specific paneling profiles. Where Magicplan focuses on interior design, Eagleview is geared specifically toward roofline planning. Using GPS technology, Eagleview allows home builders to calculate the proportions of any roofline, an important assist for builders planning to add extensions to standing structures or renovating rooflines on existing homes. Evernote is a cross-platform app that helps home builders keep track of their schedules through note-taking and archiving software. Builders who find it a challenge to keep track of different aspects of their projects – budgetary expenses, timetables, individual worker assignments, and punch lists – can use Evernote to easily record it all. Users can tag, annotate, edit and share their notes with attached photos and files. Evernote has over 200 million users worldwide, making it one of the most popular mobile apps. The apps listed above are just a handful of the countless mobile tools that can make it easier for home builders to manage their projects more efficiently. Find more information on many other builder apps reviewed on NAHBNow. This post was researched and written by Luke Goodwin, a summer intern for NAHB Communications.
How a Home Purchase Boosts Consumer Spending Using the Consumer Expenditure Survey (CES) data from the Bureau of Labor Statistics (BLS), NAHB Economics research shows that a home purchase triggers additional spending on appliances, furnishings, and remodeling. NAHB’s most recent estimates are based on the 2012-2014 data and show that during the first two years after closing on the house, a typical buyer of a newly-built single-family detached home spends on average $4,500 more than a similar non-moving home owner. Likewise, a buyer of an existing single-family detached home tends to spend over $4,000 more than a similar non-moving home owner, including close to $3,700 during the first year. The NAHB analysis compares spending behavior among three groups of single-family detached home owners: buyers of new homes, buyers of existing homes and non-moving owners. Home buyers, and new home buyers, tend to be larger households with children, and on average wealthier, with higher levels of education and concentrated in urban areas. Any of these factors could potentially explain higher spending on appliances, furnishings and remodeling by home buyers. Thus, the NAHB analysis controls for the impact of household characteristics on expenditures, and, nevertheless, finds that a home purchase alters the spending behavior of homeowners and that otherwise similar homeowners spend more across all three categories compared to non-moving owners during the first two years after moving. july 2017
www.ncbia.com
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Mark These Dates in Your Calendar JUL 27 - Clambake Committee JUL 27 - SMC Steering Meeting JUL 27 - SMC Networking Luncheon at North Star Builders
9:00am 11:00am 11:30am
AUG 04 - Golf Classic - Sweetbriar Golf Course AUG 24 - Night at the Crushers - Hosted by YP
All Day Long 7:00pm
SEP 04 - Labor Day - Office Closed SEP 09 - NCBIA Family Picnic-Amherst Twp. Park SEP 13 - Board of Directors Meeting SEP 21 - SMC Networking Event at Pogie’s Clubhouse
1:00pm 5:00pm 5:00pm
AUG 04 - Clambake - Amherst Eagles
6:00pm
Check the website at www.ncbia.com for up to date changes, additions and corrections to these events!
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Members’ accounts are not insured or guaranteed by any government or government sponsored agency.
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THANK YOU SPIKES!
STATESMAN SPIKE (500-999 SPIKE CREDITS) Bob Yost.......................Dale Yost Construction............................ 602.25 SUPER SPIKE (250-499 SPIKE CREDITS) Mary H. Felton...........Fidelity National Title............................. 362.50 Terry Bennett...............Bennett Builders....................................... 297.75 ROYAL SPIKE (150-249 SPIKE CREDITS) Jack Kousma...............Kousma Insulation................................... 232.50 Chris Majzun Jr. .........Majzun Construction............................... 228.00 Bill Perritt....................Perritt Building Co................................... 220.50 Bucky Kopf..................Kopf Construction Corp......................... 190.00 Randy K. Strauss........Strauss Construction............................... 174.50 Bill Comerford............Hovey Kaiser Insurance Associates...... 173.50 Jeff Hensley.................Lake Star Building & Remodeling......... 160.25 RED SPIKE (100-149 SPIKE CREDITS) Tom Lahetta................Tom Lahetta Builders.............................. 135.00 Chris Majzun Sr..........Majzun Construction............................... 101.00 GREEN SPIKE (50-99 SPIKE CREDITS) Patrick Shenigo...........ShenCon Construction, LLC.................. 96.00 Thomas Caruso...........Caruso’s Cabinets.................................... 91.75 Tom Sear......................Ryan Homes............................................. 89.75 Mike Lapos..................Lapos Construction................................. 74.00 Tim Conrad.................Graves Lumber......................................... 67.00
Chris Mead..................Maloney & Novotny, LLC...................... 63.50 Sara Majzun- Garwood...BCT Alarm Services................................. 59.00 Aaron Kalizewski.......Grande Maison Construction................. 55.50 Ray Allen Thom..........Thom Concrete ........................................ 50.50 LIFE SPIKE (25-49 SPIKE CREDITS) Jason Scott...................North Star Builders.................................. 37.50 Steve Schafer...............Schafer Development.............................. 30.50 Jeremy Vorndran........84 Lumber................................................. 30.50 BLUE SPIKE (6-24 SPIKE CREDITS) Liz Schneider..............Dollar Bank............................................... 18.50 Ken Cassell..................Cassell Construction................................ 13.50 Jason Higgins..............Sunnyside Chevrolet............................... 14.00 Chris Collins...............Carter Lumber Company....................... 12.50 Michelle Nowlin.........First Federal Savings of Lorain.............. 12.50 Tom Ostrander............84 Lumber Co........................................... 11.50 Tami Lanphere............Town Money Saver.................................. 10.50 Jeff Lugar.....................ABC Supply Co........................................ 9.0 Keith Martin................MBD Homes............................................. 9.0
Our SPIKES are Our FOUNDATION
WOTUS Rule Definitions on the Way Out The EPA and Army Corps of Engineers on June 27 proposed to replace consuming federal permits for countless ditches, isolated ponds and dry the 2015 definition of the term “waters of the United States” (WOTUS) channels,” NAHB chairman Granger MacDonald said today in a press with the text that existed since 1986. release. The agencies said the action is the first in a two-step process. In Step 2, the government will propose a new definition for WOTUS. Going back to the well-established 1986 definition allows the agencies to provide continuity and clarity to the regulated community while deliberating on a new definition. And this time, the agencies said, the path to a new rule will be more public. “As we go through the rulemaking process, we will continue to make the implementation of the Clean Water Act Section 404 regulatory program as transparent as possible for the regulated public,” said Douglas Lamont, acting Assistant Secretary of the Army for Civil Works. “NAHB applauds President Trump, the EPA and the Corps for taking the necessary actions to roll back this seriously flawed WOTUS rule that would harm housing affordability by requiring expensive and timejuly 2017
“Earlier this year, the president honored a campaign promise made to home builders as he signed an executive order directing EPA and the Corps to begin the process of dismantling the controversial WOTUS rule. This is an important step forward to rework the flawed regulation that blatantly usurped state and local authority,” MacDonald said. “NAHB looks forward to working with the administration, EPA Administrator Scott Pruitt and [Mr.] Lamont to develop a common-sense solution to protecting our nation’s waterways while taking into account the interests of local businesses and communities nationwide.” For additional information, contact Owen McDonough or Tom Ward at NAHB.
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NAHB Members Fan Out on Capitol Hill
Builders from South Dakota pose in front of the U.S. Capitol before their meetings begin. More than 800 builders, remodelers and their trade partners from across the nation are heading to Capitol Hill this morning for the annual NAHB Legislative Conference. In a day full of meetings with elected officials and their staff, our members will call on Congress to make housing and homeownership a national priority and to support policies that will keep the housing recovery moving forward. “Today, builders from coast-tocoast are sending a loud and clear message to members of Congress that a strong housing market is critical to spur job growth and create a vibrant, dynamic economy,” said NAHB Chairman Granger MacDonald.
(Marco) Rubio. Addressing the labor shortage is definitely our No. 1 priority. But we also need to get a handle on regulations. Many of my clients are getting killed by excessive regulations and it’s getting harder and harder for them to turn a profit. Our hope is that [Congress will] apply more common sense to the regulations that impact home building,” said Kimberly Mackey, president and founder of New Home Solutions in Tampa, Fla. A predictable, affordable national flood insurance program. “Losing the national flood insurance program would make it hard to even build — let alone sell,” said Darrick Guthmiller, chief business officer of Kochmann Brothers Homes Inc. in Fargo, North Dakota. Housing finance reform. “We need to talk about the future of housing finance. That is the key, critical issue here in Tulsa,” said HBA of Greater Tulsa director of association issues Stacey Bayles.
In more than 250 individual meetings with their representatives and senators, our members are asking for progress on several key housing issues, including: Regulatory reform. “We need a common-sense approach to regulations that kill small businesses. We need to be at the table. We need to keep pressing,” said Tom Ashley, co-owner of the remodeling company Expand Inc. in Baton Rouge, La. “We’re very excited to go up on the Hill today and speak with Sen.
Members also planned to discuss tax reform, including protecting incentives for homeownership; promoting cost-effective energy codes; securing a supply of softwood lumber sufficient to meet demand; and improving the Low-Income Housing Tax credit to help meet the nation’s acute need for affordable rental homes. Rep. Peter Roskam (R-Ill.), who sits on the House Ways and Means Committee, spoke to builders before they met with their lawmakers and said that this year there is “a real opportunity to do something about tax reform.” House Republicans are working on a tax reform blueprint that would generate economic growth, simplify the tax code, stop erosion of the U.S. tax base so that it is no longer more attractive for U.S. corporations to go overseas, and provide permanency to the tax code to deliver certainty to the business community, Roskam said. It’s the first year since 2013 that NAHB has held its annual Legislative Conference in Washington, D.C. During the past three years, as part of a nationwide effort to “bring housing home,” builders across the country met with their federal lawmakers in their home districts. The conference is held in conjunction with the NAHB Midyear Meeting. “The big benefit of the board meeting for me is coming and meeting with other builders,” said Brian Esposito, owner of Esposito Construction Inc., in Hilton Head Island, S.C. “The learning and education I get from them is a big reason why I come.”
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U.S. Total Payroll Employment Gains Accelerated in June June’s employment gains accelerated while the unemployment rate ticked up. Moreover, employment in residential construction kept increasing with the lower unemployment rate. According to the Employment Situation for June 2017 reported by the BLS, total nonfarm payroll employment increased by 222,000 in June, faster than the 152,000 gains in May. The unemployment rate rose to 4.4%, from a 16-year low of 4.3%. The labor force participation rate increased by 0.1 percentage point to 62.8% in June.
Monthly employment data, released by the BLS Establishment Survey, also indicate that home builder and remodeler employment increased by 6,000. The 6-month moving average of job gains for residential construction now was close to 5,000 a month. Residential construction employment is now 2.695 million, broken down as 760,000 builders and 1.93 million residential specialty trade contractors.
Over the last 12 months home builders and remodelers have added 115,600 jobs on a net basis. Since the low point of industry employment In June, while the numbers of employed persons and unemployed following the Great Recession, residential construction has gained persons increased by 245,000 and 116,000, respectively, the number of 712,800 positions. persons not in the labor force declined by 170,000. The decrease in the number of persons not in the labor force contributed to the higher labor In June, the unemployment rate for construction workers declined force participation rate. to 5.1% on a seasonally adjusted basis, from the 5.9% in May. The unemployment rate for the construction occupation had been on a general decline since reaching a peak rate of 22% in February 2010.
NCBIA Taking BRANDING to the Next Level Recently the National Association of Home Builders has provided all of our local associations with new and exciting advertising slicks that can be used as a part of local branding campaign. These eye-catching print ads that carry messages about the benefits of homeownership are a great tool for locals to use during New Homes Month, National Homeownership Month, or any time throughout the year. One of these fantastic ads is shown on the facing page. The North Coast BIA has begun a program with Adtaxi to begin branding our location association via our social media outlets. Our audience is on Facebook, Instagram and other highly visible social media sites. This campaign is being facilitated by our new member Adtaxi and The Morning Journal. They are partners with Facebook and Google and are providing us with much needed guidance on the web. They are skilled at audience development to find an nurture leads for this association and its members. You have likely already seen some of our branding advertising while page 22
surfing on Facebook. These ads are just the start of our continuing efforts to make our name known to the general public. We want them calling us when they need a contractor, a plumber, or an electrician in stead of contacting some woman with a list. When you see one of our branding ads (shown here) we ask that you share it with others on your “FRIENDS” list. The more we all share the name of the North Coast BIA and our abilities to help people with their housing needs, the more we help all of the members that are a part of this great association.
www.ncbia.com
july 2017
Own your future Home is where it all begins – where your family grows, memories develop and dreams take shape.
Learn more about buying and owning a home at nahb.org/timetobuy.
NAHB Officers Hold Productive Talks with HUD Secretary Carson In a broad agenda focusing on regulatory reform and housing affordability, NAHB senior officers today held productive talks with HUD Secretary Ben Carson. Topics covered included:
discussions with builders with Section 3 experience and suggested that HUD partner with HBI, NAHB’s workforce development arm, in developing job training resources.
• The Federal Flood Risk Management Standard. NAHB believes that HUD’s proposed rule to expand its floodplain management oversight should be withdrawn because it fundamentally threatens access to FHA mortgage insurance programs for single-family home buyers and multifamily builders.
• Davis-Bacon. Home builders are subject to costly and administratively complex Davis-Bacon wage requirements when they use HUD funding or FHA multifamily mortgage insurance to construct affordable rental housing. NAHB urged HUD to reaffirm existing guidance which calls for application of a single “residential” Davis-Bacon wage determination for low-rise multifamily properties. We also asked Secretary Carson to help us weigh in with the Department of Labor to advocate further DavisBacon reforms.
• Small Area Fair Market Rents. HUD has instituted a rule to make Small Area Fair Market Rents based on ZIP codes rather than an entire metropolitan area. Among other things, NAHB urged HUD to rescind most of the rule and reinstate the Fair Market Rent regulations in effect prior to the new rule. • Affirmatively Furthering Fair Housing. This HUD rule requires, states, local governments and public housing agencies to conduct a formal fair housing planning process as a condition of receiving certain HUD funds. NAHB urged HUD to revise the rule to address concerns about its potential for inappropriate federal encroachment on local land use decisions and legitimate business practices, such as a landlord’s refusal to accept rental subsidies. • HUD Section 3 program. Under Section 3, builders who receive federal HUD funds must offer job training and opportunities to low-income residents in their neighborhoods. Although well-intended, Section 8 has had unintended consequences for some builders, including increased costs, administrative burdens and project delays. We offered to facilitate
• Mortgage insurance premiums. Shortly after the inauguration, President Trump reversed an action by the Obama administration to lower the fee for FHA mortgage insurance by one-quarter of one percent. NAHB believes the FHA insurance fund can readily sustain the modest 25 basis point mortgage insurance premium reduction and urged HUD to reinstate the rate cut to help more qualified first-time home buyers to afford home loans. Those attending the meeting with the HUD secretary included NAHB Chairman Granger MacDonald, First Vice Chairman Randy Noel, Second Vice Chairman Greg Ugalde, Third Vice Chairman Dean Mon, Immediate Past Chairman Ed Brady, Government Affairs Committee Chairman Justin MacDonald and Housing Finance Committee Chairman Greg Peek. For more information, contact Chellie Hamecs at 800-368-5242 x8425.
What Do Home Buyers Buy after Moving? In a prior recent post we discussed NAHB research showing how during the first year after closing on a home sale, home buyers tend to spend considerably more money on furnishings, appliances and remodeling compared to non-moving owners. Buyers of new homes spend most, outspending non-movers by a factor of 2.6. Buyers of existing homes spend twice as much as non-moving owners. This post reveals particular items that are most popular with home buyers and help explain changes in their spending behavior triggered by a house purchase. The NAHB analysis of the Consumer Expenditure Survey (CES) data from the Bureau of Labor Statistics shows that the biggest outlay in the budget of new home buyers is furnishings. They spend $3,778 on furnishings outspending old home buyers 70 percent and non-moving owners 5.3 times. Average spending is estimated for all households in the group regardless whether they purchased a certain item or not. Thus, higher averages may point to larger and/or more frequent spending by the group. Compared to non-moving owners, new home buyers spend more on every single item the CES counts as furnishings with the exception of infant’s furniture and other furnishings. They also outspend existing home buyers on nearly all furnishing items with the exception of office furniture, dinnerware, and infant’s equipment. july 2017
A home purchase, especially when it is a new home, has a particularly large effect on expenditures on living room chairs/tables and dining room/kitchen furniture. During the first year after moving, new home buyers spend $687 on living room chairs and tables outspending nonmoving owners and existing home buyers 12 and 5 times respectively. The average spending by new home buyers on dining room and kitchen
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How a Home Purchase Boosts Consumer Spending Using the Consumer Expenditure Survey (CES) data from the Bureau of Labor Statistics (BLS), NAHB Economics research shows that a home purchase triggers additional spending on appliances, furnishings, and remodeling. NAHB’s most recent estimates are based on the 2012-2014 data and show that during the first two years after closing on the house, a typical buyer of a newly-built single-family detached home spends on average $4,500 more than a similar non-moving home owner. Likewise, a buyer of an existing single-family detached home tends to spend over $4,000 more than a similar non-moving home owner, including close to $3,700 during the first year. The NAHB analysis compares spending behavior among three groups of single-family detached home owners: buyers of new homes, buyers of existing homes and non-moving owners. Home buyers, and new home buyers, tend to be larger households with children, and on average wealthier, with higher levels of education and concentrated in urban areas. Any of these factors could potentially explain higher spending on appliances, furnishings and remodeling by home buyers. Thus, the NAHB analysis controls for the impact of household characteristics on expenditures, and, nevertheless, finds that a home purchase alters the spending behavior of homeowners and that otherwise similar homeowners spend more across all three categories compared to non-moving owners during the first two years after moving.
Looking at spending patterns of new home buyers and identical households that do not move, the differences are largest on furnishings. A typical new home buyer that buys a new home is estimated to spend almost $2,500 more on furnishings than an identical household that stays put in a house they already own. In the same way, moving into a new home triggers higher levels of spending on appliances. A typical new home buyer that moves into a new home is estimated to spend over $1,250 more on appliances during the first year compared to a non-moving owner. In the case of property repairs and alterations the differences are smallest, $714. Similarly, buying an older home triggers additional spending. The typical buyer of an existing home tends to spend over $4,000 more on remodeling, furnishings, and appliances compared to otherwise identical homeowners that do not move. However, in case of buying an older home, most of this extra spending goes to remodeling projects, more than $2,000, and occurs during the first year after closing on the house. For furnishings, buyers of existing homes boost their spending by over $1,200 during the first year after moving in. The elevated level of spending on furnishings persists into the second year when old home buyers spend additional $500 over their typical budget on furnishings. In the case of appliances, buyers of existing homes outspend similar non-
moving owners by $433. The statistical analysis further shows that this higher level of spending on furnishings, appliances and property alterations is not paid by cutting spending on other items, such as entertainment, transportations, travel, food at home, restaurants meals, etc. This confirms that home buying indeed generates a wave of additional spending and activity not accounted for in the purchase price of the home alone.
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NAHB’s latest research updates the 2008 study that was based on 20042007 data. The earlier data, collected during the housing boom, showed somewhat higher spending by home owners overall. Nevertheless, the tendency of home buyers to outspend non-moving owners on appliances, furnishings, and home improvements was similar.
What Do Home Buyers Buy after Moving?
OSHA Proposes to Delay Deadline for Electronic Injury Reporting
CONTINUED FROM PAGE 25 furniture is $345. This is 12 times higher than the amount spent by non- OSHA has announced that it is proposing to delay to Dec. 1 the date by moving owners and exceeds the respective spending of existing home which certain employers are required to electronically submit workplace injury information from 2016. buyers 9 times. The differences in spending patterns are similarly large when comparing spending on window coverings. New home buyers outspend nonmoving owners 10 times ($215 compared to $21), while existing home buyers (with an average annual spending on window covering of $78) outspend non-moving owners 4 times. The biggest ticket item for new home buyers is sofas, with an average spending exceeding $700 during the first year after moving. This is 60 percent higher than the amount spent by buyers of existing homes and 6.4 times higher than what nonmoving owners typically spend on sofas per year.
The original mandate, as NAHBNow reported in May, would have given builders, contractors and other companies until July 1 to electronically submit their lists of 2016 workplace injuries. OSHA had previously announced a suspension of the July 1 deadline until further notice.
In January, NAHB, along with the U.S. Chamber of Commerce, Oklahoma State HBA, State Chamber of Oklahoma and three poultry associations filed a lawsuit challenging the legal authority of OSHA to New home buyers also spend more on appliances – $3,094, compared issue the electronic reporting rule. with $1,889 for existing home buyers and $1,182 for non-moving owners. The biggest outlay in the appliance budget of new home buyers are clothes washers/dryers, lawnmowers/other yard equipment, and computer hardware/systems. Coincidentally, new home buyers outspend existing home buyers and non-moving owners on all these appliances. They also outspend non-moving owners on such big-ticket items as refrigerators/home freezers and televisions. The high level of spending by new home buyers may seem surprising considering that many new homes come with installed appliances, but suggests that these purchases are nevertheless more frequent among these households. The Builder Practices Survey conducted by the Home Innovation Research Labs has insightful data on why some appliances are more likely to be purchased by new home buyers. It shows that twothirds of new homes built in 2015 came with no clothes washers and dryers and 36 percent had no installed refrigerators. At the same time, In addition to the lawsuit, on May 5 NAHB and other construction industry virtually all new homes came with cooking stoves, ranges, or ovens. associations asked the Department of Labor to put the implementation Somewhat unexpectedly, new home buyers spend almost as much and enforcement of the rule on hold and to reopen the rulemaking record ($3,729) as buyers of existing homes ($4,085) and outspend non- to reexamine the legal authority for the rule and its impact on workplace moving owners ($2,232) on property alterations and repairs. However, safety and health. the specific types of remodeling projects are quite different across the groups. As anticipated, buyers of existing homes and non-moving For more information about the rule and other jobsite safety concerns, owners spend more on various repairs and replacements. They also contact NAHB’s Rob Matuga at 800-368-5242 x8507. outspend new home buyers on kitchen/bathroom addition or remodeling, and purchasing and installing new items such as HVAC, electrical and security systems, paneling, flooring, siding, windows and doors. Average spending of new home buyers on most of these items is close to nothing, suggesting that new home buyers rarely spend on these items during the first year after moving. However, when it comes to outside additions and alterations, including a new driveway, walk, or fence, new home buyers outspend existing home buyers and non-moving owners by far. Even though, during the first year after closing on the house, home buyers tend to spend on furnishings, appliances, and property alterations considerably more compared to non-moving owners, most of the demand for appliances, furnishings, and remodeling projects in a given year is generated by non-moving home owners, because they outnumber home buyers by such a wide margin. july 2017
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Mortgage Rates Fall Again
Information provided by the Federal Housing Financing Agency’s Mortgage Interest Rate Survey indicates that mortgage rates on purchases of newly constructed homes fell over the month of May to 4.00 percent, from 4.02 percent in April. Since rising by 64 basis points between October 2016 and February 2017, rates have now slipped 18 basis points over 3 consecutive months.
component by comparing the yield on the 10-Year Treasury Inflation Protected Securities with the rate on the 10-year Treasury Note. Since the yield on the 10-Year Inflation Protected Securities is indexed to the Consumer Price Index (CPI), then the spread between these two yields should also provide information about the market’s view of inflation**.
A previous post illustrated that the longer-term trend in the 30-year fixed rate mortgage reflects changes in the rate on the underlying 10-year Treasury Note. Over the October 2016 to February 2017 period, the U.S. 10-Year Note rate rose by 66 basis points to 2.42 percent. The 66-basis point increase in the 10-Year Treasury Note rate over this time period would imply that the average mortgage risk premium, the difference between the rate on the conventional 30-Year Fixed Rate Mortgage for the purchase of newly constructed homes and the 10-Year Treasury Note rate, fell by 2 basis points over the same period. Over the more recent February-May period, the rate on the 10-Year Treasury Note fell by 12 basis points to 2.30 percent, twice the implied change in the risk premium*.
The figure above indicates that the increase in the 10-Year Treasury Note rate over the October 2016 to February 2017 period reflected a nearly equal increase in both the market’s view of inflation expectations and the real return on the 10-year Treasury rate. However, over the February to May period, the decline in the 10-Year Treasury Note rate overall reflected a decrease in the markets expectations for inflation. Meanwhile, the real return on the 10-Year Treasury Note rose.
The figure above suggests that the trend in the 10-Year Treasury Note rate has had a larger impact on changes in the mortgage rate on purchases of new construction, although the risk premium associated with mortgage lending has also played a role, albeit a smaller one. With some assumptions, researchers can decompose the 10-Year Treasury Note rate into its inflation component and its “real” or inflation-adjusted page 28
However, relying solely on the bond market for information about trends in inflation may not yield accurate results. In addition to the assumptions underlying this calculation, other factors may be impacting the recorded yields on these securities. For example, the Federal Open Market Committee’s quantitative easing programs, which involved significant purchases of longer-term Treasury securities, may mask the private market’s view of inflation as implied by bond yield spreads. Comparing results from bond yields with survey data on consumer prices can help to confirm whether inflation accelerated toward the end of 2016 and whether it has slowed in recent months.
As shown in the table above, 12-month changes in the CPI indicate that inflation had accelerated between October 2016 and February 2017, from 1.64 percent to 2.80 percent. Since February 2017, inflation has slowed to 1.87 percent. Similarly, using changes in the price index on the Personal Consumption Expenditures component of the National Income Product Accounts (i.e. GDP) shows that inflation had largely been accelerating between October 2016 and February 2017 before slowing in each month since February***.
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july 2017
Mortgage Rates Fall Again
(Continued from page 25) Taken together, the recent rise and, so far, smaller decline in the mortgage rate largely reflected changes in the 10Year Treasury Note rate, although, to a smaller extent, the implied risk premium played a role as well. Over the end of 2016, the increase in the 10-Year Treasury Note rate reflected both an increase in the expectations for inflation as well as the real yield on Treasury securities. However, the decline in mortgage rates over the February-May period likely reflected, in large part, a slowdown in inflation. This analysis then suggests that there are at least two links between inflation and housing demand, the house price channel and the mortgage rate channel. * According to the FHFA, “The indices are based on a small monthly survey of mortgage lenders, which may not be representative”. When we substitute the rate on the 30-Year Fixed Rate Mortgage rate as provided by Freddie Mac, a more commonly used rate, the impact of the risk premium over the February-May period shrinks even more.
an idea known as Rational Expectations Theory posits that expectations of price changes are equal to prices changes in the present, absent any shocks (i.e. energy price volatility). *** In fact, inflation had been accelerating since the summer.
** More directly, calculating this “breakeven rate” provides information on the markets expectations for inflation over the 10-year window. However,
2017 Membership Drive
by Sara Majzun-Garwood - Membership Chairman
Have you got your member in yet to be entered in the 2017 member drive? If you haven’t there is still time! I am so proud to announce that as a whole our association has brought in 54 members thus far since January 1st! We are so close to our goal of 300 members! Plus one lucky sponsor will win the trip for 2 worth $1800! How can you get an entry in the trip drawing? Simply bring in a member! For every primary member that you sponsor into our association you will receive 6 entries in to the drawing, and for every affiliate member you sponsor you will receive 1 entry. If the association as a whole brings in 40 Primary members we will up the value of the trip to $2800! We are only 9 primary members away from that goal. Now sometimes getting members is not the easiest thing to do. A lot of times it is hard to overcome the “No” when trying to get someone to join. There are lots of tricks and tips that can help with that. Explain to them that by joining the NCBIA that person has to opportunity to save their company up to 53% on their workers comp. For some companies that right there is worth the price of membership. If the person is looking to grow their networking base then you could explain to them about our Sales & Marketing Committee. The Sales & Marketing Committee holds monthly networking events where business contacts are always being made. Maybe the individual is looking for other discounts. With our partnership with the National Purchases Partners there are hundreds of companies july 2017
that offer discounts to our members. Some of those companies include Lowes, Staples, Houzz, Speedway, and Verizon. Sometimes the best way to get someone to join is to invite them along with you to an event so that they can see just how powerful a membership to the NCBIA can truly be. So get out there and get your member today! Number of Total Members To Date:
54
31 Primary Members 23 Affiliate Members The Indians Have Brought In A Total Of 19 Primary Members And 14 Affiliates For A Total Of 128 Points The Cavs Have Brought In A Total Of 12 Primary Members and 9 Affiliates For A Total Of 81 Points Remember: For Each Primary Member Your Team Gets 6 Points And For Each Affiliate Your Team Gets 1 Point. Leading Recruiters: Sara Majzun Garwood (Indians) 15 Members Chris Majzun Jr. (Indians) 5 Members Michelle Nowlin (Cavs) 3 Members Mary Felton (Cavs) 3 Members Jeff Hensley (Cavs) 3 Members Linda LaFleur (Indians) 3 Members Bob Yost (Cavs) 3 Members
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July Sales and Marketing Committee Networking Luncheon at St. Jude Dream Home!
Thank you Jeff Crawford and Kelly Christie for hosting our SMC Builder Networking Luncheon at the 2017 St. Jude Dream Home & thanks to Janet Saggio of Bella Ciba for the wonderful lunch.
July Sales and Marketing Committee Networking Luncheon at St. Jude Dream Home!
Thank You Sponsors!
We’re in the offering NAHB members up to $1,000 business.
2017 Chevrolet Low Cab Forward 3500HD
2017 Chevrolet Silverado 2500HD
2017 GMC Sierra 1500
2017 Chevrolet Express 2500 Cargo Van
NAHB MEMBERS BENEFIT FROM THESE SPECIAL OFFERS. Members of the National Association of Home Builders (NAHB) can now enjoy a private offer1 of up to $1,000 toward the purchase or lease of most new Chevrolet, Buick and GMC vehicles. Choose an eligible vehicle at your local dealer and present your NAHB proof of membership. You can add on incentives from the National Fleet Purchase Program2 and Business Choice3 to get the best value on vehicles that run your business. For private offer details, visit nahb.org/gm.
Example offer for NAHB members who are business owners purchasing a 2017 Chevrolet Express 2500 Cargo Van. Up to
$1,000 Private Offer1
Up to
+
$4,000
National Fleet Purchase Program (FVX)2
Up to
+
$1,200
Eligible Accessory Cash Allowance3,4
Up to
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$6,200 In Potential Value
1 Private offer amount varies by model. Up to $500 offer for retail deliveries and up to $1,000 offer for fleet deliveries. Valid toward the purchase or lease of eligible new 2016 and 2017 model year vehicles. Customer must take delivery by 1/2/18. Not compatible with other private offers. Not valid on prior purchases. Compatible with many current incentives. Incentives are subject to change without notice. Offer excludes Chevrolet Bolt, Camaro, Chevy SS, Corvette, Sonic, Spark, Trax, Volt, Buick Cascada, Lacrosse, Regal, Verano and all Cadillac vehicles. Additional GM models may be excluded from time to time at GM’s sole discretion. See dealer for details. 2Offer available to qualified fleet customers. Not compatible with some other offers. Take delivery by 12/31/17. See dealer for details. 3To qualify, vehicle must be used in the day-to-day operations of your business and not solely for personal/non-business-related transportation purposes. Must provide proof of business. For complete program requirements, including information regarding offers, vehicles, equipment, options, warranties, and ordering, consult your dealer or visit gmbusinesschoice.com. Take delivery by 1/2/18. 4 Not eligible on associated accessories from third-party independent suppliers. Not available with some other offers. Take delivery by 1/2/18. See dealer for details. ©2017 General Motors, LLC. All rights reserved. The marks appearing in this ad are the trademarks or service marks of GM, its subsidiaries, affiliates, or licensors.