Get an inside look at building industry employee compensation trends across the country with the newly released study conducted by the National Association of Home Builders Economics & Housing Policy Group: The 2014 Single-Family Builder Compensation Study.
Published by National Association of Home Builders BuilderBooks, the study provides compensation and benefits data for 39 common positions at single-family home building companies. The study shows average total compensation and the prevalence of benefits offered to each position by:
- geographic region
- 2014 dollar volume
- number of single-family units started in 2013
- number of employees on payroll
The study is based on data collected in July 2014 from builders across the country. It’s divided into two sections that present the survey findings from different perspectives:
Compensation and Benefits across 39 Positions—a broad view of the full-time positions at single-family building companies as well as a comparison of total compensation and benefits across positions.
- Compensation and Benefits by Position—a detailed view of each position’s average compensation and benefits.
- Results from this survey provide single-family builders with up-to-date information that can be used to benchmark their employees’ level of compensation and benefits.
The 2014 Single-Family Builder Compensation Study is available at BuilderBooks.com or by calling 800-223-2665. It costs $79.95 for National Association of Home Builders members and $149.95 retail.
The eBook format available at ebooks.builderbooks.com allows readers to view the study directly on their computer, iPad and Android. The price: $55.99 for National Association of Home Builders members, $89.99 retail.
Existing Home Sales
Existing home sales, as reported by the National Association of Realtors (NAR), surged 14.7% in December, including an increase in the first-time buyer share to 32%, the highest share since August. December sales snapped back from a November decline partially attributable to delays in closings from the rollout of the Know Before You Owe mortgage disclosure rule by the Consumer Financial Protection Bureau (CFPB). The new rule was designed to help consumers understand their loan options and avoid closing cost surprises. Total existing home sales in December increased to a seasonally adjusted rate of 5.46 million units combined for single-family homes, townhomes, condominiums and co-ops, up from 4.76 million units in November. December existing sales were up 7.7% from the same period a year ago.
Existing sales increased in all regions, ranging from 8.7% in the Northeast to 23.2% in the West. Year-over-year, all regions increased, ranging from 4.6% in the South to 11.9% in the Northeast.
Total housing inventory decreased by 12.3% in December, and is 3.8% lower than its level a year ago. At the current sales rate, the December unsold inventory represents a 3.9-month supply, down from a 5.1-month supply in November. Some 32% of homes sold in December were on the market for less than a month.
Distressed sales are defined as foreclosures and short sales sold at deep discounts. The distressed sales share decreased to 8% in December from 9% in November. The December all-cash sales share decreased to 24% from 27% in November and 26% in December 2014. Individual investors purchased a 15% share in December, down from 16% in November and 17% a year ago.
The December median sales price of $224,100 was 7.6% above last December, and represents the 46th consecutive month of year-over-year increase. The median condominium/co-op price of $209,900 in December was up 4.9% from last December.
Although the Pending Home Sales Index fell slightly in November, the sharp volatility in November and December sales was a function of implementing a new regulation. Builder sentiment remains strong, and the tight inventory of existing homes bodes well for new single-family sales in 2016.
“This is a really good indicator that the real estate market is returning to normal levels. When existing home sales rise it stimulates sales of new homes, and it stimulates remodeling activity,” said Home Builders Association of Greenville President Joe Hoover, APB, of Hoover Custom Homes.
New Home Sales
Sales of newly built, single-family homes rose 14.5% to 501,000 units in 2015: the highest level since 2007, according to newly released data from the Department of Housing and Urban Development and the U.S. Census Bureau. Meanwhile, sales in December increased 10.8% to a seasonally adjusted annual rate of 544,000 from an upwardly revised November reading.
“The December sales report is a great end to a very strong year,” said National Association of Home Builders Chairman Ed Brady. “As we move forward in 2016, we should see the housing market continue to make lasting gains.”
“Relatively low interest rates and an improving economy are motivating buyers to make a new-home purchase,” said National Association of Home Builders Chief Economist David Crowe. “Builders are upping their inventory in response to heightened consumer interest. Housing inventory is now at its highest level since October 2009.”
Sales increased in all four regions in December. The Midwest, West, Northeast and South all posted respective gains of 31.6%, 21%, 20.85% and 0.4%.
The inventory of new homes for sale was 237,000 units in December, a 5.2-month supply at the current sales pace.
Combining the reports of increasing sales of existing and new homes points to an overall increase in the housing market. Considering recent history, those in the building industry should always be cautious, but these reports point to a strengthening economy.
Good news for those in the home building industry–NAHB’s Eye on Housing
blog reports that home building continues to grow.
Housing starts for the month of September rose 6.5% to an eight year high of 1.206 million units on a seasonally-adjusted annual basis. The increase was all in the multifamily sector, rising 18.3% to 466,000. Single-family starts were virtually unchanged at 740,000. This is the first month total starts passed the 1.2 million mark since October 2007.
The trends in both are more apparent on a quarterly or year-to-date basis that smooths some of the monthly irregularities inevitable in sample data. Single-family starts averaged 746,000 for the third quarter, up 5.7% from the second quarter. Multifamily starts averaged 418,000 for the third quarter, down 7.3% from the second quarter. On a year-to-date basis, both increased: single-family starts are up 11% from the same period in 2014 and multifamily starts are up 13.8%. These averages provide a clearer picture of the steady increase in housing construction that we have been experiencing for several years.
Permits were down 5% but that change was also due entirely to the multifamily sector. Single-family permits were virtually unchanged at 697,000 while multifamily permits fell 12.1% to an annualized rate of 406,000. Multifamily permits accelerated in June as builders drew permits to beat new regulatory deadlines and builders are working off that inventory. On a year-to-date basis, the trends are more informative with single-family increasing 9.4% and multifamily up 18.8%.
The smoothed trends tell the same story: single-family production continues to move forward at a modest pace as more current home owners feel comfortable selling their existing home and buying a new one. Younger, newly formed households continue to move out of their parents or roommate living arrangements and rent an apartment driving up the demand for more rental units. NAHB expects this same trend to continue into 2016.
Data from the FDIC indicate that smaller financial institutions, typically community banks, are the most common sources of lending for home building acquisition, development and construction (AD&C) loans. This trend strengthened during years of the housing crisis.
The FDIC data are split into two sources: commercial banks and savings institutions. As of the final quarter of 2013, total 1-4 residential construction and development loans held by commercial banks summed to $38.9 billion. Such loans from savings institutions represented a smaller source: $4.8 billion.
With respect to commercial banks, the fourth quarter 2013 FDIC data reveal that 62% of home building AD&C lending was held by banks roughly matching the community bank standard of possessing less than $10 billion in total assets. This lending was decentralized as there are almost 5800 such institutions, although it is not possible to determine how many held residential AD&C loans. In contrast, there were 90 commercial banks with more than $10 billion in assets, holding a still significant $14.7 billion in home building AD&C loans.
Nonresidential AD&C lending, which includes some land development financing and commercial real estate, is more likely to be held by larger banks, as the chart above indicates. In fact, more than half (56%) of such loans were held by commercial banks with more than $10 billion in assets.
A larger share of residential AD&C was held by larger institutions prior to the recession. The chart above notes the change in market share from the end of 2007 to the end of 2013. While the share of nonresidential AD&C held by large banks increased over this six-year period, the market share of residential AD&C shifted to smaller banks. For example, at the end of 2007, 52% of home building AD&C was held by banks with more than $10 billion in assets, a swing of 14 percentage points of market share from 2007 to 2013.
The smaller savings institutions side of the market tells a similar story. At the end of 2013, 86% of home building AD&C loans held by savings institutions was controlled by institutions with less than $5 billion in assets. A noticeable difference is that both residential and nonresidential AD&C lending shifted, in terms of market share, toward smaller savings institutions from the end of 2007 to the end of 2013, as the following chart demonstrates.
South Carolina’s leading index of economic indicators in May improved for the fourth straight month and hit its highest point since June 2007, according to a report posted by the S.C. Department of Commerce.
The leading index, driven in part by a jump in new-home construction and a drop in unemployment claims, reached 101.1 in May, according to the report, authored by David Clayton, director of the agency’s research division.
“Heading into summer, the housing market continues to improve in South Carolina,” the report said.
The number of residential construction permits rose 26.3% in May compared with April. Meanwhile, the total value of the permits issued in May rose 17.5%.
The coastal region posted the largest increases in new residential construction permits with Charleston up 53% in May over the previous month, and Myrtle Beach up 39%.
The median sales price for a single-family home climbed $8,500 or 5.6% in May, the reported added.
“Last month’s median sales price gain was the largest, in dollar terms, since August 2009,” the report said.
Overall, the volume of home sales in May rose 21% compared with May 2012, with the heftiest increases in Greenville and Spartanburg, each up about 40%.
On the jobs front, nonfarm employment increased 5,400 jobs or 0.3% in May from the prior month.
Meanwhile, the average weekly number of initial claims for unemployment insurance was 4,306 in May, about 2.6% less than April and about 4% less than May 2012.
Greenville reported the largest decline at 14%, followed by Spartanburg, down 9%.
Other key S.C. indicators in May included:
- Personal income decreased 1% to $163.3 billion in the first quarter.
- S.C. stock index gained 1% of 0.95 points, closing at 100.85.
- 0.01% decrease in labor force, down 276 to seasonally adjusted 2,169,409.
- No change in unemployment rate at 8%.
- 1.4% decrease in weekly manufacturing hours to 41.3 hours.
- 0.4% decrease in available online job posts to seasonally adjusted 56,400 listings.
Source: Columbia Regional Business Report