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Homebuilder sentiment jumped in November, according to a report from the National Association of Home Builders.

The NAHB's housing market index came in at a reading of 20 for November, bringing the index to its highest level since May 2010. Economists were expecting the index to remain unchanged from the originally reported reading of 18 in October according to Thomson One Analytics.

Still, the index remains well below 50, indicating that builders largely view the market as poor.

"While this second solid monthly gain on the builder confidence scale is encouraging, the overall measure remains quite low due to the many challenges that home building continues to face with regard to the high number of foreclosures, the difficulties of obtaining construction financing and accurate appraisals, and the restrictive lending environment that is discouraging potential buyers," said Bob Nielsen, NAHB chairman and a home builder from Reno, Nev.

Reported by The Street (11/16/11)

New residential construction surged 15% in September, turning in its best performance in 17 months, though economists warned that a housing recovery has yet to take hold.

While new construction is key to getting the economy going, much of the new building came from the apartment sector, which can be very volatile. Many economists also noted that permits pulled for new construction, also an important measure of builders’ plans for the future, declined in September.

Nevertheless, the news of the increase cheered investors on Wall Street as well as several housing analysts who follow the numbers closely.

“A strong residential construction number is a welcome relief for an economy struggling to hang on to expansion and a hopeful harbinger of better days to come,” Celia Chen, a housing economist with Moody’s Analytics, wrote in a research note Wednesday morning. “Caution, however, needs to be taken in interpreting the surprisingly strong top-line housing starts for September.”

Builders started new residential units at a seasonally adjusted annual rate of 658,000 in September, a 15% increase over the prior month and up 10.2% from the same month the year before, according to the U.S. Commerce Department.

Single-family homes were built at a rate of 425,000 units, which is only 1.7% above a revised August estimate, meaning the bulk of the increase came from the building of structures with five or more units.

News of the increase in new home starts came one day after builder confidence in the market rose, according to a closely watched index that measures builder sentiment. The National Assn. of Home Builders/Wells Fargo Housing Market Index jumped by four points to 18 in what was the biggest one-month gain since April 2010, when a tax credit for buyers was fueling purchases. Sentiment remains pretty dismal, however, as a number above 50 indicates more builders view conditions as good than poor.

“A stagnant economy and labor market has meant that housing recovery over the past year has been painfully slow, but we do believe that housing is gradually healing and recovering,” Nishu Sood, a home-building analyst with Deutsche Bank, wrote in a research note Wednesday.

Despite that cautious optimism, economists also pointed to the housing permits number released Tuesday by the Commerce Department, which signaled a more mixed picture for housing. New residential building permits were issued at a seasonally adjusted annual rate of 594,000 units, which is 5.0% below the revised August rate, though still up 5.7% from September 2010.

“We would warn against getting too excited as the fundamental picture has not changed; household formation is still too low and the excess supply is still too high to warrant a major rise in home building,” read part of an analysis by Capital Economics.

Reported by Los Angeles Times  (10/19/11)

In Bozeman, Mont., Anders Lewendal is hard at work building a home he hopes will be a blueprint for creating jobs in America.

Lewendal, an economist turned builder, is constructing a house made entirely from U.S.-made products. Everything from the nails, screws and bolts, to the steel, staples and bathtub is made in the United States.

"Every piece here is made in America," he said.

Lewendal is convinced that if every builder bought just 5 percent more U.S.-made materials, they would create 220,000 jobs. The Boston Consulting Group agrees, confirming that Lewendal's numbers add up.

In all, the U.S.-made house is being built with more than 120 products from more than 33 states. But builders do acknowledge that using American products can be more expensive.

A box of nails is $5 more than those made in China and steel is $146 more a bundle. Even though certain goods are more expensive, in total, the cost of the house is nearly identical, given that other U.S.-made products are cheaper. The all-American home, which is not yet finished, is running only 1 to 2 percent more than a foreign-sourced house.

While some items might be more expensive, the difference in quality is often noticeable. The nails produced by Maze of Peru, Ill., are made using high-carbon steel and a double coat of zinc. The result is that they are stronger, rust proof and jam the nail gun less.

"[We're] one of the last makers of nails in this country," company president Roelif Loveland said.

About 90 percent of nails come from China and, Loveland said, if he could double sales, he could add 25 more jobs.

Many other U.S. companies said the same thing. If Lewendal's idea catches on, they could hire, too. From Gorilla Tape of Cincinnati to a Sherwin-Williams plant in Georgia and a Moen plant in Pennsylvania, companies around the country say if builders bought more American products, it would put people back to work.

ABC News sent Lewendal’s list to builders across the country and some responsed immediately.

Contractor Tarek Saad said he started ordering Maze Nails, an architect in Miami said she'll start buying the U.S.-made items that are priced the same as the foreign ones, and Paul Minnis, a remodeler from Michigan, doubled Lewendal's request.

"If 5 percent will make a difference," he wrote, "I am going to try for 10 percent or more American-made products."

Reported by ABC News (Oct. 11, 2011)

Builder confidence in the 55+ housing market for apartments was significantly higher during the first quarter of 2011 according to the National Association of Home Builders (NAHB).

The NAHB’s expected demand index for 55+ multifamily rental units rose 10 points, to 44, from a year earlier.  David Crowe, NAHB’s chief economist said that demand is for existing 55+ rental apartments is running ahead of production.

“A shortage may even emerge in that segment of the market, if pent-up demand emerges quickly but builders’ inability to access credit continues,” he said.

Demand for sales of single family or condos didn’t fare as well, declining 2 and 3 points, down to 17 and 8, respectively.

“Builders in the 55+ market are still finding that some customers are hesitant to buy,” said Ken Simons, a New Jersey developer and chair of the NAHB 50+ Housing Council Board of Trustees.  ”Many prospective 55+ buyers are having trouble selling their existing homes, a problem often made worse by low appraisals.”

The 55+ single-family HMI measures builder sentiment based on current sales, prospective buyer traffic and anticipated six-month sales for that market. A number greater than 50 indicates that more builders view conditions as good than poor.  Among the index components, present sales dropped two points, to 15. Expected sales (six months into the future) dropped six points, to 24. And traffic of prospective buyers fell one point, to 17.

The 55+ multifamily condo HMI also showed weakness, with an index level of 8, down from 11 at the beginning of 2010. All three index components – current sales, expected sales and buyer traffic – declined during this period.

In contrast, indices of current and expected production of 55+ apartments gained 7 and 8 points, up to 20 and 27, respectively, in the first quarter of 2011.  The index measuring current demand jumped 11 points, up to 39.

Reported by NAHB Senior Housing News (May 12, 2011)

New-home sales will remain weak into 2012, said Bill Wheat, chief financial officer of D.R. Horton Inc., one of three U.S. homebuilders to predict a delayed recovery today.

“We don’t see the economic drivers to change in 2011,” Wheat, whose Fort Worth, Texas-based company is the second- largest homebuilder by revenue, said at a Wells Fargo & Co. (WFC) conference in New York today. “We feel it could still be a struggle in 2012.”

Homebuilders are fighting to compete with lower-priced existing homes as a glut of foreclosures drives down values. New houses sold at an annual pace of 300,000 in March, up from a nearly 50-year-low pace of 270,000 in February, the Commerce Department reported April 25.

The number of visitors and serious shoppers at homebuilder sales offices “weakened sequentially” in April from the previous month, Adam Rudiger an analyst with Wells Fargo Securities, wrote in a May 9 report based on a survey of 150 sales managers in 20 markets.

Five years into the housing slump, unemployment at 9 percent and a drumbeat of negative news continue to discourage buyers, Douglas C. Yearley Jr., chief executive officer of Toll Brothers Inc. (TOL), said at the Wells Fargo conference. Home prices may fall as much as 9 percent in 2011, Zillow Inc. said in a May 9 report.

“People are still scared,” said Yearley, whose Horsham, Pennsylvania-based company is the largest U.S. luxury-home builder. “We’re just disappointed that demand hasn’t come back better at this point.”

Jeffrey Mezger, CEO of Los Angeles-based KB Home (KBH), speaking at the conference today, said he expects sales to “bump along for the next 18 months.”

The Standard & Poor’s Supercomposite Homebuilder Index of 12 companies declined 1.5 percent as of 3:18 p.m. in New York.

VALENCIA, Calif. - KB Home (NYSE: KBH), one of America’s premier homebuilders, and Newhall Land today announced a land purchase agreement in the prestigious West Hills Village in Valencia, California. KB Home has acquired 43 finished lots from Newhall Land and will begin construction on a new community at the site in late June.

The energy-efficient homes built by KB Home in West Hills will include solar power systems as a standard feature, helping homeowners to reduce their monthly energy bills and cost of homeownership for years to come, while also benefiting the environment. KB Home recently announced plans to open 10 communities across Southern California in which all of the homes will be built with photovoltaic solar systems.

“KB Home has a strong relationship with Newhall Land and we are pleased to be working with them again in Valencia, one of the most-desirable submarkets in the greater Los Angeles area,” said Steve Ruffner, president of KB Home’s Southern California division. “We look forward to introducing area buyers to our Built to Order™ approach, and to offering some of the most energy-efficient homes on the market today, with solar power systems included in every home as a standard feature at this and many more of our new home communities throughout Southern California.”

“KB Home will be a great partner for us as we continue developing West Hills, a beautiful village in Valencia,” said Marlee Lauffer, vice president of marketing and communications for Newhall Land. “We appreciate the value and quality KB Home delivers to its homebuyers, and we hope this is one of many opportunities we have to work together in the future.”

KB Home’s new community will offer home shoppers three new energy-efficient floor plans ranging from 2,941 to 3,646 square feet with up to six bedrooms, four baths, and three-car tandem garages. Each new home will be Built to Order™, which means homebuyers choose their home site and floor plan, which can then be customized to fit their lifestyle and taste. Options include various elevation styles, as well as structural changes such as converting multipurpose spaces to additional bedrooms, or adding a covered patio to enhance outdoor living spaces. Buyers then decide on finishing touches at the KB Home Studio, a retail-like design center showcasing choices available for flooring, cabinets, lighting and more.

All new KB Home communities feature ENERGY STAR^® qualified homes, along with the exclusive new KB Home Energy Performance Guide™ (EPG). Similar to the miles per gallon rating or MPG, which reflects fuel efficiency and is standard when purchasing a new car, the KB Home EPG informs prospective buyers about the relative energy efficiency of a KB home versus a typical new or resale home, and provides them with an estimated dollar amount for the monthly electric and/or gas energy costs for the home as designed. For the first time, KB Home can project for homebuyers the potential financial benefit of owning an energy-efficient KB home based on data provided by independent third-party consultants. The KB Home EPGs for the homes at the new community in Valencia will reflect the additional energy efficiency provided by the solar power systems.

Reported by Business Wire (May 11, 2011)