Economic Update – Builder Confidence Improving!

Housing news turned positive this week as spring gave way to summer. Future data will confirm whether the recent turn in momentum reflects a return to the improving trend that was in place before the end of 2013, but early signs are encouraging.

New single-family home sales reached their highest pace in six years in May. According to estimates from the Census Bureau and HUD, new home sales were at a seasonally adjusted annual rate of 504,000 in May, a gain of 18.6% over a slightly downwardly revised April (425,000). This rate is the highest since May 2008 and is a significant increase from the winter low point for sales in March (410,000).

The May pace of sales was certainly an improvement over the soft patch experienced from February through April. The most recent gains are likely due to a payback for weather-related declines during the winter, so future months will indicate whether a better trend has taken hold. But encouraging signs like better jobs numbers are consistent with this outcome.

Another improved indicator is the NAHB/Wells Fargo Housing Market Index (HMI), which rose four points in June to 49. This is just shy of the 50 mark, indicating at least as much optimism as pessimism among single-family home builders. The index dipped 10 points to 46 in February from a sustained above-50 mark for eight months and remained near there for four months. The June gains were experienced in all the components of the HMI: current sales, expected sales and traffic.

Alongside the positive new home sales report was the May existing home sales measure. The National Association of Realtors reported that existing home sales were up 4.9% from April to May. While still 5% lower year over year, the 4.89 million seasonally adjusted annual rate confirmed a turn in the decline that had been in place since the middle of 2013. Year-over-year declines in existing home sales, which distinguish this market from the growing new home market, are likely due to recent drops in distressed and investor purchases, as well as the 2014 expiration of a tax rule connected to short sales.

The one negative housing report in recent weeks was construction starts. The Census Bureau and HUD estimated that total housing starts declined 6.5% in May. Single-family starts were down 5.9%, while multifamily construction in properties with five or more units was down a larger 8.3%. The declines were a result, in part, to April’s numbers, where were among the highest since the end of the recession. On a year-over-year basis, the May pace of single-family construction was 4.7% higher and 19.2% higher for five-plus multifamily building.

Home price appreciation appears to be slowing after the strong gains of the past year or two, propelled by increases in areas that experienced some of the largest price declines during the recession. House prices grew by 10.8% between April 2013 and 2014, according to the S&P/Case-Shiller 20-City Composite Home Price Index, which was less than the 12-month growth rate of 12.4% seen in March. Similarly, the Federal Housing Finance Agency’s Purchase-Only Index rose 6% compared to 6.4% in March. Both indices show that annual house appreciation slowed from December to April and suggest the housing market may be returning to its long-run growth trend.

Consistent with the weak housing reports from the winter and early spring, the final estimate of first-quarter GDP indicated that the economy contracted as a 2.9% rate, the worst quarter in five years. Besides disappointing investment numbers, personal consumption growth was anemic and exports displayed particular weakness. Part of the poor performance was weather related and other one-off factors. Second-quarter GDP growth should reflect some payback for deferred economic activity and post a growth rate higher than 3%.

Common measures of general prices and inflation, moved in opposite directions in May. Producer prices declined 0.2%, after notable increases of 0.5% and 0.6% for March and April respectively. Among building materials, softwood lumber prices rose 1% in May from April. Prices are 28% above the average level over 2011. OSB prices have flattened out in 2014, declining 0.7% in May. Prices are 23% above the average level over 2011. Gypsum prices declined 0.7% in May, 41% above the average 2011 mark.

In contrast, consumer prices in May experienced the largest monthly increase since February 2013, rising 0.4% on a seasonally adjusted month-over-month basis and 2.1% year over year. The increase was broad, affecting many items found in the consumer basket such as energy, food and shelter. The NAHB constructed real rent index increased nominally in May. Over the past year, real rental prices rose by 1.1%.

The Federal Open Market Committee, the Federal Reserve’s monetary policy committee, announced this week that the pace of asset purchases (quantitative easing) will be reduced by another $10 billion to $35 billion per month. The federal funds rate will continue to remain at the current near zero level for a “considerable time” after asset purchases have concluded.

In analysis news, economists at NAHB mapped the change in county-level housing permit activity for 2013. Overall, 1,807 counties and county equivalents saw an increase in the number of single-family permits issued over the prior year while 858 saw a decrease. According to data from Hanley-Wood, there was some movement among the rankings of the top 10 publicly traded home builders in 2013, although D.R. Horton maintained the top spot with more than 25,000 closings.

Additionally, NAHB economists discussed land banking and new mortgage application data for new homes. Lastly, data for the first quarter of 2014 revealed that property taxes, the top revenue source for state and local government, made up 40.3% of receipts from major sources over the last four quarters – an important reminder of the role real estate plays in local economies.

ICF Manufacturers Form New Industry Association

cicfi_identity_transparent(Toronto June 2014) Four leading insulating concrete form manufacturers have formed a new industry association. Logix Insulated Concrete Forms Ltd., Nudura Corporation, Quad-Lock Building Systems Ltd. and Superform Products Ltd., who cumulatively represent the majority of the ICF products manufactured in North America, are the founding members of the Council Of ICF Industries (CICFI). Andy Lennox, Vice President, Marketing of Logix was elected to be the Chairman and Murray Snider, President and CEO of Nudura will serve as Vice-Chairman.

“The mission of the CICFI is to promote and enhance the social, environmental and economic value of insulating concrete forms in the North American marketplace.” says Lennox. “Our industry has a great story to tell and we look forward to representing and growing the ICF industry in an energetic and professional manner. We’ve held a number of very productive meetings over the last few months during which we’ve identified our priorities and developed our initial action plans. Now that our association is officially up and going the implementation and execution begins. This association is long overdue, we are excited to get started and we look forward to additional ICF manufacturers joining us as we move forward.”

FOR MORE INFORMATION CONTACT:

Andy Lennox

Chairman – Council Of ICF Industries

705-928-3779

andy@logixicf.com

 

OWNER NEEDING HOUSE TO PERFORM AS NUCLEAR BOMB SHELTER BUILDS WITH LOGIX ICF

ICF was considered the only choice available for this owner requiring the house to perform as a NUCLEAR BOMB SHELTER, Provide Protection from GUNFIRE, withstand up to a SEISMIC 8 EARTHQUAKE and be as FIREPROOF as possible!

From the start the owner’s goal was to have the most energy-efficient and sustainable structure that could be built,  using the most cutting edge technology and materials available. So this owner chose LOGIX ICF which allowed the structure to get as close to a net zero efficient structure as possible.

The architect chose Logix platinum ICFs molded with Neopor as the building material of choice. The efficiency of the ICF walls, coupled with enhanced insulation using ICF foam (Fortress floor system) for the floor and ceiling offered an extremely energy-efficient envelope.

Be sure to come back to this blog over the next few weeks to hear more about the amazing challenges as this home was built and the additional benefits of using LOGIX ICF in meeting, and in some cases exceeding expectations!

Logix Introduces Heat-Sheet Panels For Radiant Floor Heating Applications

Logix Insulated Concrete Forms Ltd. is pleased to announce the launch of Heat-SheetTM  –  a new lightweight radiant floor insulating system designed for slab-on-grade, sandwich slab, snow-melt, retrofit and overlay applications.

Compact 2′ x 4′ Heat-Sheet panels are made with Type 2 or Type 3 EPS, come in six thicknesses and offer R-values from R4 to R14.

Heat-Sheet’s tough preformed nodules resist jobsite breakage and form the convenient 3″ multi-directional tubing channel grid. With Heat-Sheet , 1/2″, 5/8″ or 3/4″ radiant floor tubing easily “walks into place” (usually in 1/2 the time or better) and stays in place without ties, clips or staples in most cases.

Heat-Sheet panels are available across Canada and in the USA. The availability of Heat-Sheet products will vary from region to region

For additional information, or to download the Heat-Sheet brochure or installation guide, visit www.heat-sheet.com or call Logix at 888.415.6449.456