Freddie Mac: Housing market showing recovery
First-quarter economic data from the office of the chief economist at Freddie Mac showed a 2.2% growth rate, slower than the previous quarter, but better than three of the past four quarters. The slower growth primarily reflected less housing inventory accumulation and a dip in nonresidential construction. Personal consumption expenditures grew at a 15.3% annual rate, reflecting continuing strength in consumer durables (such as cars and kitchen appliances). Also, residential fixed investment (RFI) added 0.4 percentage points to the quarter’s economic growth.
RFI, which primarily reflects new housing construction and remodeling expenses, has been a net positive contributor to growth for four straight quarters, with the latest quarter providing the biggest boost in nearly two years. Multi-family rental-apartment starts and existing-home remodeling have triggered the RFI growth. Housing starts were up in April, and have brought the monthly average over the first four months of 2012 to 713,500, up 24 from the same period a year ago. Nonetheless, RFI remains weak for this stage of the economic recovery compared with previous business cycles.
The Freddie Mac House Price Index (FMHPI) for the first three months of this year suggested that home values may be at or near their bottom in many markets. Comparing March 2012 with December 2011 results at the state level, the index was up at least 0.5% in 13 states, and about flat (plus or minus 0.5% in nine states, but down at least 0.5% in 28 states. With the lowest fixed-rate mortgage rates in more than 60 years, the extraordinary home-buyer affordability in many areas should translate into a sales pickup in 2012 relative to last year.
Despite some signs that the housing market may have bottomed, homeownership rates have continued to move lower through the first quarter. The U.S. Census Bureau reported that the national ownership rate dropped 0.5 percentage points to 65.5% (seasonally adjusted) during the quarter, down from a peak of 69.4% in the second quarter of 2004 and back to a level last seen in 1997. Some additional slippage in the homeowner rate is likely as more than 2 million homes remain in foreclosure proceedings nationwide.
In the same release, Census also reported that vacancy rates for both for-rent and for-sale homes declined further in the first quarter — signs that the rental market continues to tighten and that excess vacant homes are being absorbed by household formations. Homeowner vacancy rates in one-family houses dipped to their lowest rate in six years, and rental vacancy rates for one-family houses fell to their lowest in almost nine years.
Another important first-quarter metric concerned the refinance boom. Although this may not be good news for home improvement retailers, homeowners who refinance are typically not using the opportunity to embark on home renovation projects. Freddie Mac’s first-quarter refinance activity reports found that about four of five borrowers who refinanced their mortgages either paid down their balance or kept it about the same. Further, more than 95% of refinancers in the conforming market chose fixed-rate loans, and about one in three shortened their term from 30 years to 20 or 15 years on their new loan.
“Taken together,” the report concluded, “the first-quarter data releases provide an encouraging sign for both the macroeconomy and the housing recovery. While not uniformly positive, for the most part, the data trend in the right direction.”
This is not going on across
This is not going on across the country. You are just like the white house spreading the wrong message. The housing industry still has thousands of homes upside down, so why lie to the general public???
Armed with iPads, BMC rolls out BMC 2 Go
Boise, Idaho-based BMC is rolling out a suite of enterprise mobile apps called “BMC 2 Go” that will transform sales and operations business processes, making employees more mobile, productive and effective through high-value Apple iPhone and iPad applications.
Boston-based tech firm Apperian partnered with BMC to provide its Enterprise App Services Environment (EASE) as the iOS app management platform to deploy and manage mobile applications for its nationwide network of sales and operations personnel.
The mobile strategy is described as “groundbreaking” by Malini Balakrishnan, BMC’s chief information officer and VP process optimization.
“BMC 2 Go will empower our people in the field,” Balakrishnan said. “As employees visit job sites, they will be able to access data and documents — on demand — that live behind our firewall. This will allow them to share valuable, proprietary content like videos and PDFs of different styles and brands of building products, which will enable customers to make important buying decisions in real time.”
BMC 2 Go will give builders and their buyers access to content that will help them visualize the finished project before or during construction.
“Our groundbreaking interactive tool is an industry first, and further distinguishes BMC’s products and services on the competitive landscape by making the buying process that much more seamless for our customers,” Balakrishnan said.
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New Southern Pine standards take effect in June
Effective June 1, 2012, the Southern Pine Inspection Bureau (SPIB) has issued some new design values for Southern Pine Lumber. The changes will affect only visually graded Southern Pine and Mixed Southern Pine sized 2” to 4” wide and 2” to 4” thick (2x2s through 4x4s) in No.2 and lower grades (No.2, No.3, stud, construction, standard and utility). This also includes new design values for No.2 dense and No.2 nondense Southern Pine. Design values for all other grades and sizes of visually graded Southern Pine remain the same, pending results of testing scheduled for completion later this year.
The last major change for visually graded dimension lumber occurred in 1991 when design values for Southern Pine and other North American species were published based on In-Grade testing of full-size samples of commercially produced lumber. Since 1994, SPIB has conducted an annual resource-monitoring program developed in collaboration with the U.S. Forest Products Laboratory (FPL). SPIB is the first rules-writing agency to publish new design values. Rules-writing agencies responsible for other species are in different stages for evaluating design values.
Design values for structural lumber undergo a rigorous approval process. SPIB partnered with Timber Products Inspection to sample No.2 2×4 test specimens according to a plan approved by the American Lumber Standard Committee (ALSC) Board of Review. SPIB and Timber Products conducted destructive tests in bending and tension, plus gathered stiffness and property data, all in accordance with ASTM International standards. Throughout the process, technical review was performed by FPL. The ALSC Board of Review approved the new design values early in 2012 with a recommended effective date of June 1, 2012.
As June 1 approaches, users should begin using the new design values and revised span tables if they haven’t done so already. The intent of the six-month transition period was to minimize project delays and supply chain disruptions by providing time to begin to use the new design values or switch to other Southern Pine grades or sizes meeting performance requirements. Southern Pine users have many available product options, including visually graded dimension lumber and an increasing supply of mechanically graded lumber. Many producers and key customer groups have already successfully transitioned to the new design values with minimal disruption to their businesses.
Building codes reference design values are certified by the ALSC Board of Review. The American Wood Council (AWC) publishes these design values in a supplement to the code-referenced National Design Specification (NDS) for Wood Construction. Building codes also include span tables and other prescriptive requirements that will need to be amended to reflect the new design values. Visit AWC.org to download the AWC Addendum to Design Values for Wood Construction, revised prescriptive span tables and other updates to AWC’s standards and design tools. Also visit Southernpine.com to obtain easy-to-use span tables for specific grades and sizes of Southern Pine lumber.
SPIB and timber products are currently working to complete the full In-Grade matrix by destructively testing No. 2 select structural 2x4s, 2x8s and 2x10s in bending, tension and compression. Additional design value changes are expected once all the testing is completed later this year. Moving forward, Southern Pine will continue to be monitored with annual destructive testing.
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