Builder confidence rises
Builder confidence in the market for newly built, single-family homes improved by two points in July to 15 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The gain largely offsets a three-point dip recorded in June, and marks the ninth time out of the past 10 months in which the index has held within the same three-point range.
"The improvement in builder confidence in July is a positive sign that the outlook perhaps isn’t quite as bleak as was feared in June," said National Association of Home Builders (NAHB) chairman Bob Nielsen and a home builder from Reno, Nev. "While builders continue to confront serious challenges with regard to competition from foreclosed properties that are priced below replacement cost, inaccurate appraisals of new homes, and a very restrictive lending environment for new home construction, select markets are showing gradual improvement as consumers begin to take advantage of very favorable buying conditions."
"We view the upward movement in the July HMI as a correction from an exceptionally weak number in June that was at least partly attributable to negative economic news and the close of a disappointing spring selling season," said NAHB chief economist David Crowe. "The strong rebound in sales expectations for the next six months likewise marks a return to trend. Basically, the market continues to bounce along the bottom, with conditions in some locations beginning to improve."
The NAHB has been conducting its monthly builder confidence survey for more than 20 years, asking builders of single-family homes to rate their sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to gauge traffic of prospective buyers as "high to very high," "average" or "low to very low." The index is then calculated and seasonally adjusted. Any number over 50 indicates that more builders view sales conditions as good than poor.
Housing starts for June show improvement
Monthly housing starts for June rose above the 600,000 mark for the first time since January, according to data released today by the Commerce Department.
Housing starts increased to a seasonally adjusted annual rate of 629,000 in June, up 14.6% from the revised May estimate of 549,000. Single-family starts also showed a big improvement — up 9.4% to a rate of 453,000.
The 629,000 annual rate came in much higher than anticipated by most forecasts, which had called for a rate of about 570,000.
The June figures were heading in the right direction on a year-over-year basis, also. Total housing starts were up 16.7% over June 2010, and single-family starts were up a slight 0.4% compared with a year ago.
Looking at the four regions of the country, single-family construction showed the biggest growth in the Midwest, where starts increased more than 20% compared with last year and last month. The Northeast in June posted a 35.1% increase in total housing starts, compared with May.
Building permits in June were at a seasonally adjusted annual rate of 624,000, up 2.5% from May, and up 6.7% compared with June 2010.
Former ProBuild execs form investment group, acquire steel company
An investment group led by Paul Hylbert, former CEO of ProBuild Holdings, and Boreas Advisors have announced the acquisition and recapitalization of Barton Supply, a Colorado fabricator and distributor of structural and reinforcing steel products and accessories.
Hylbert’s new investment group, as yet unnamed, partnered with Boreas Advisors in 2011 to look for opportunities in the housing and building products industry. It wasn’t difficult for Hylbert and Boreas to find each other after Hylbert left ProBuild three months ago: Boreas consists of former ProBuild executives.
Steve Swinney, former VP finance, planning and analysis at ProBuild, is managing partner of Boreas Advisors. The Denver-based firm’s principals, Kyle Barker, Bryan Cleveringa and Eric Miller, all worked in finance at ProBuild.
Swinney will serve as CEO of the new acquisition, while Cleveringa will serve as CFO. The former owners of Barton Supply, Don and Scott Barton, will stay on as part of the management team, as well as investors.
With locations in Aurora, Colorado Springs and Fort Collins, Barton Supply serves general contractors, foundation and framing subcontractors, and home builders. Over the past five decades, Barton Supply has grown to three locations and added bending, cutting and welding capability to fabricate reinforcing steel products, as well as structural steel beams, posts and columns.
In an interview with Home Channel News, Hylbert talked about the 18-acre facility and rail siding at Barton’s main facility, and the similarities between the distribution of any building materials, be it lumber or steel. Although Hylbert still has three months left on his non-compete contract with ProBuild, “We’re in the rebar fabrication game,” he explained. “These are products that lumberyards don’t sell [so] it’s not really competitive with ProBuild.”