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Monday Morning Briefing 5-21-2012

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New Southern Pine Design Values Become Effective June 1

As previously communicated in this report, new design values for #2 and lower grade Southern Pine and Mixed Southern Pine 2x4’s will become effective on June 1 of this year. These reduced values, developed by the Southern Pine Inspection Bureau (SPIB), were approved by the American Lumber Standard Committee’s Board of Review in January. At the urging of NAHB and other industry stakeholders, an effective date of June 1 was provided to allow the industry some time to transition to the new design values while avoiding project delays and market disruptions. As part of these efforts, the American Wood Council has developed addenda to the National Design Specification for Wood Construction, the Wood Frame Construction Manual, and the Span Tables for Joists and Rafters reflecting the new design values, and has also developed recommended amendments to prescriptive tables in the International Residential Code and International Building Code. The new values were reduced by 25-30% and will primarily affect the design of roof trusses. Though the maximum allowable spans for 2x4 headers, joists and rafters will be shorter, they are not commonly used in those applications, and so will have minimal effects on most builders. In addition, 2x4 studs used in conventional construction are not affected by this change. It is our understanding that any such adoption would apply only to new construction. Projects already under construction or submitted to the building department prior to an adoption date should not be affected, however in any particular situation, builders should consult with their local jurisdiction regarding any plans to adopt and enforce the new design values. Going forward, SPIB is testing additional sizes and grades of Southern Pine. A submission to ALSC is expected in late summer or early fall, which may propose reductions to design values for larger sizes (including 2x6 through 2x12) and higher grades (#1 and Select Structural). ALSC has also directed that the other major species (Douglas Fir, Hem-Fir and Spruce-Pine-Fir) should undergo sampling and testing to assure there are no changes to their current design values.

Builder Confidence Up Five Points in May

Builder confidence in the market for newly built, single-family homes gained five points this month from a downwardly revised reading in April to reach a level of 29 on the NAHB/Wells Fargo Housing Market Index (HMI), released May 15.  This is the index’s strongest reading since May of 2007. Each of the index’s components rebounded in May from declines in the previous month. The component gauging current sales conditions and the component gauging traffic of prospective buyers each rose five points in May to 30 and 23, respectively, with the traffic component hitting its highest level since April of 2007. The component gauging sales expectations in the next six months rose three points to 34. Meanwhile, three out of four regions registered improving builder sentiment in May. This included a six-point gain to 32 in the Northeast, and five-point gains to 27 and 28 in the Midwest and South, respectively. The West posted a two-point decline, to 29. Commenting on the latest HMI results, NAHB Chief Economist David Crowe said, “While home building still has quite a way to go toward a fully healthy market, the fact that the HMI has returned to trend is an excellent sign that firming home values, improving employment and low mortgage rates are drawing consumers back." He noted that the pace of this emerging recovery could be stronger but for the significant impediments that the market continues to face with regard to builder and consumer access to credit, inaccurate appraisals, and more recently, rising materials prices.

Housing Starts Rise 2.6 Percent in April From Upwardly Revised Pace

Nationwide housing production gained 2.6% in April from an upwardly revised pace in the previous month to hit a seasonally adjusted annual rate of 717,000 units, according to figures released by the U.S. Census Bureau and HUD on May 16. This modest gain was seen in both the single- and multifamily sectors, which registered increases of 2.3% to 492,000 units and 3.2% to 225,000 units, respectively. The latest data indicates that starts activity has returned to the gradual, upward trend that NAHB expects to see continuing through this year. NAHB Chief Economist David Crowe noted that, “While still less than half the pace of what we would expect in a fully healthy market, the rate of housing production in April was very solid for this point of the recovery and in keeping with the findings of our latest builder surveys that have registered modest improvements in buyer traffic and near-term sales expectations for single-family homes." Regionally, starts were mixed in April, with the Midwest and South posting gains of 6.7% and 11.6%, respectively, and the Northeast and West posting respective declines of 20.7% and 8.1%. Meanwhile, permit issuance fell 7% to a seasonally adjusted annual rate of 715,000 units in April following an unsustainably large gain in the previous month. The decline was entirely on the more volatile multifamily side, where permits fell 20.8% to a 240,000-unit rate that is essentially back to trend. Single-family permits gained 1.9% to 475,000 units. Regionally, permit activity held unchanged in the Northeast while declining 12.3% in the Midwest, 3.2% in the South and 13.9% in the West, respectively. Today's photos are Amboise. This particular starter castle plan was converted to a "log cabin style" home and built with 18" diameter logs by Amish builders. More photos can be found at this link: Amboise Choose From More Than 400 House Designs and House Plans We offer house designs in a wide range of styles and sizes. Some of our more popular house designs include European-inspired Georgian and Palladian homes, English Manor house plans, Tuscan-style Italian villas, French chateaux, and Colonial house plans. Our Tuscan-style villas range from 1800 sf to 13,600 sf. Our Newport Classics house designs are gentrified New England-style cottages that range from 1500 to 5000 square feet. Our starter castles, mansions and estate homes are designed in the grand tradition of some of the most impressive homes in the world. Please feel free to search our house designs or browse our photo gallery to get a sense of the many styles and types of house designs we offer. Our plans have been built around the globe, from Canada to Dubai, and one plan could be just for you!

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  • Joanne Loftus
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