PwC Partner Mitch Roschelle says that homebuilders’ optimism is retreating. Roschelle cites among the factors behind the decline – land, labor and lumber – which could affect every American who owns or rents a house.
You could add one more “L” to Roshelle’s list, LIBOR.
LIBOR is a benchmark rate, which some of the world’s leading banks charge each other for short-term loans. It stands for London Interbank Offered Rate, and serves as a first step to calculating interest rates on various loan products throughout the world.
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) tells MHProNews that their builder sentiment gauge fell to 70, the lowest reading since last November.
“Builders’ optimism continues to be fueled by growing consumer demand for housing and confidence in the market,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, LA. “However, builders are reporting challenges in finding buildable lots, which could limit their ability to meet this demand.”
“A strong labor market, rising incomes and a growing economy are boosting demand for homeownership even as interest rates rise,” said NAHB Chief Economist Robert Dietz to the Daily Business News. “With these economic fundamentals in place, the single-family sector should continue to make gains at a gradual pace in the months ahead.”
Problems for Stick-Builders Could be Good News for Manufactured Housing…
Producers tell MHProNews that when components like steel, aluminum or lumber rise for conventional builders, even though it goes up for factory builders too, they increase is often less steep. Bulk purchase buying power is one reason for the advantage.
Less waste in the building process is another.
Manufactured housing sales have risen steadily since it hit its all-time low in 2009.
In spite of the obvious price and other advantages that manufactured housing has over conventional builders, the industry has still lagged behind.
The causes for that lag have been explored in other reports, including the analysis sparked by the Urban Institute’s report on manufactured housing. ## (News, analysis, and commentary.)
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Submitted by Soheyla Kovach to the Daily Business News for MHProNews.com.
Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.