Page 6 - GSABA Builder Brief August 2020 Issue

JEFF CZAR President
In the Middle of Difficulty
Lies Opportunity
Recent economic data shows a rapid improvement in new home sales the past two months. This is good news for the residential construction industry and provides opportunities for all of us. The recent Case-Schiller data indicates that in the second quarter of 2020, we saw a 4.7 percent year-over-year price gain in new and pre-owned home values.
These gains are due in part to mortgage interest rates being at an all-time low. According to Freddie Mac, at the start of July 2020, interest rates were below 3.1 percent. The labor market is also improving, with a marked rise in construction hiring.
Robert Dietz, NAHB’s Chief Economist, recently shared “The labor market is following the positive trends in housing. In May, construction hiring surged and job openings increased, down only slightly from the 373,000 tally measured a year earlier. Indeed, home builders and remodelers added 83,200 jobs in June, after gaining 224,200 in May. This pickup matched the broader economy, which saw an employment gain of 4.8 million and a decline for the unemployment rate to 11.1 percent. The true jobless rate is higher than the official rate, but the NAHB forecast sees an unemployment rate near 10 percent at the end of 2020. “
While the forecast for the future is looking up, our industry is facing material shortages with lumber prices at a two year high. The Random Lengths Framing Composite Price increased to $523 per 1,000 board feet for the week ending July 10th. This is the first-time lumber prices have topped the $500 level since April of 2018. Tariffs are adding to these increases, not only for lumber but for several building materials.
As we look to the November elections, we must urge our elected officials and this administration to end tariffs on imports of lumber, steel, aluminum and numerous other goods used to build American homes. The rising cost of building materials is driving up housing costs and harming housing affordability. Tariffs currently in place on key building materials are meant to resolve trade conflicts, however, the tariffs are essentially taxes paid by American businesses and families, not foreign countries.
We are in unprecedented times. Residential construction is an essential business and together we need to take steps to help stop the spread of this virus. There are COVID 19 resources available on the GSABA website. There are posters in English and Spanish for your building sites and offices. You will find a Management Plan template that you can use and recommendations on steps to take as an Employer to protect your employees, clients, third parties and others you and your team members come into contact with.
With a bit of collective effort, the residential construction industry stands poised to lead the recovery on local and national levels. You can be assured that your Association will continue to keep you abreast of changes that have an impact on your business. We are in this together and together we will continue to advocate for safe and affordable housing for the greater San Antonio community.
6 AUGUST 2020 | GREATER SAN ANTONIO BUILDERS ASSOCIATION
FROM THE PRESIDENT