Monthly Update: June 2019

According to data and analysis assembled respectively by Home Innovations Research Lab and ProSales, both builders and dealers expect increased demand for off-site technologies and component manufacturing for the foreseeable future.

Both builders and dealers expect to see notable growth in roof trusses and open and closed wall panels, as builders increasingly transition away from rafter-frame roofs and site-built framing. Preassembled floors and prebuilt stairs are also primed for growth.

To date, the Midwest and West are quickest to adopt off-site construction, except when it comes to roof trusses, which see strong growth nationwide.

Based on its in-depth analysis of market conditions, MetroStudy expects that the U.S. housing market will be stable, albeit undersupplied, throughout 2019, with high levels of pent-up demand in lower price ranges. Based on current permitting activity as well as overall economic conditions, forecasters expect to see a slow, gradual decline in housing starts after the market reached its recent peak of 1.23 million starts.

While there are some worrying signals—such as slower price appreciation, higher costs, upward pressure on mortgage rates, and slowed overall economic growth—they foresee little risk of market collapse because of undersupply and high demand in most markets. Though many markets are overvalued, few have developed a supply bubble.

To access MetroStudy’s complete Q2 Housing Forecast, click here.

During a recent episode of the Build Show YouTube series, expert builder Matt Risinger introduced viewers to Tstud™, an innovative, newly engineered framing product that mitigates against thermal bridging. Each Tstud consists of an internal truss system and closed-cell foam that provide a near-complete thermal break in wall assemblies, thereby eliminating the need for exterior insulation. The product is code compliant with regard to strength, performance against wind loads, sound transmission, and fire safety. To learn more about Tstud visit https://www.tstud.com/ or watch the video.

The Chicago Regional Council of Carpenters’ embrace of mass timber was recently featured in two episodes of the council’s Built to Last® television series. Built to Last® traveled to the council’s Apprentice & Training Center in Elk Grove Village, Ill., to see firsthand how the council is growing the capacity of current tradespeople to build with mass timber.

A centerpiece of the council’s mass timber curriculum is the opportunity for trainees to put together their very own mass timber structure. Working on behalf of the council, WoodWorks identified a manufacturer that created a customized CLT structure, which trainees assemble inside the training center. Besides giving trainees firsthand experience with the materials, the structure purposefully exposes them to a variety of scenarios that they may encounter in the field.

The council’s curriculum also emphasizes the role of installers as key members of design/build teams from the start. The council is working to share its mass timber training program with other training centers across North America to make sure a skilled workforce is in place and ready to build with mass timber.

The national Residential Remodeling Index (RRI) increased to a new high of 117.5 during the first quarter of 2019, marking a 4.1% increase from one year earlier and a 0.7% increase from the previous quarter. The RRI has now experienced 28 consecutive quarters of year over year gains. All but one metro area—Bismarck, N.D.—is expected to see growth in 2019 and at an average rate of 3.1%.

The inflation-adjusted value of big-ticket remodeling projects in 2019 is predicted to increase 4.8%, to $203.7 billion. Big-ticket exterior and basement projects are expected to have the biggest increases, while big-ticket pool, siding, and addition projects will have the smallest year-over-year increases.

While the latest RRI forecast projects continued growth over the next several years, it will slow compared with past years, with year over year gains dipping to approximately 2.3% in 2020 before rising again to 3.2% in 2021. These moderate gains will be closely tied to expected lower housing turnover. Read more here.

Bain & Company, a leading global consulting firm, recently teamed with the Nature Conservancy (TNC) to assess how reforestation can help address climate change. The result is a vision of a market-based forest economy that prompts reforestation at a fast-enough rate to slow climate change.

Rather than trying to reduce wood use, the envisioned forest economy emphasizes the increased use of sustainably harvested tree products, particularly for high-value, long-term uses. Demand for these tree products will be generated mainly by substituting wood products, such as CLT, for more carbon-intensive building materials like concrete and steel.

According to Bain’s analysis, a 1% increase in annual demand for industrial wood products could drive 20 million hectares of new sustainably managed tree farms.

To read more about Bain and TNC’s vision for a successful forest economy, click here.

Katerra, the California-based off-site construction company, recently published a white paper on mass timber’s role in achieving biophilic designs. Katerra noted that hundreds of existing studies already prove that exposure to natural elements, such as sunlight and natural materials like wood, has considerable positive impacts on human health and well-being, including when in indoor environments. Many people inherently feel better in interior wood environments, be it at home, at work, or in commercial or institutional spaces.

These biophilic benefits add to the overall economic cost-benefit of mass timber structures and make them more compelling as long-term, strategic investments. In the case of mass timber, biophilic benefits join a growing list of advantages, including shorter build times and cost savings compared with conventional construction materials and methods. Read more here.

Like their peers nationwide, contractors in Portland, Ore., are shifting to prefabricated components as a way to increase efficiency and overcome the persisting shortage of skilled labor. In Portland, a bevy of new projects under construction incorporate panelized wood-framed wall systems, CLT panels in floor and ceiling installations, and other methods of prefabrication.

Computer-aided design and manufacturing ensure a high level of accuracy in the components themselves; however, project managers in Portland stress the importance of early planning and coordination to truly maximize the efficiency offered by prefabricated materials. With planning, on-site work and installations run more smoothly and thus minimize the amount of on-site work—and labor—required. Read more here.

Mortenson, in partnership with Urban Development Partners and RSP Architects, is developing and constructing Arizona’s first CLT office building, the five-story, 182,000-square-foot Beam on Farmer in Tempe. Located near Arizona State University, ​​the Beam on Farmer will incorporate enough mass timber to capture 3.5 tons of carbon dioxide. Besides the carbon benefit, Mortenson specified CLT to improve the functionality of the building and maximize its interior design flexibility via large grid spacing and high exposed ceilings.

The Beam on Farmer will be available for occupancy in late 2020. Learn more here.

In May, demolition crews imploded the 21-story, 332-foot Martin Tower, the former world headquarters of Bethlehem Steel. Built in 1972 during the height of the company’s heyday, the building was abandoned by Bethlehem Steel in 2003 during its bankruptcy proceedings.

Bethlehem-based Wind-Drift Real Estate and the Herrick Company currently own the 53-acre site and will turn it into a mixed-use development, featuring 578 housing units, 125,000 square feet of office space, and 100,000 square feet of retail. Read more here.

Throughout June, the U.S. Department of Agriculture (USDA) is celebrating National Homeownership Month and highlighting its role in helping residents in small towns and cities across rural America purchase affordable homes. Since 1949, USDA’s Single-Family Housing programs—which include a variety of loan and grant programs designed to increase access to homeownership—have served more than 4.4 million families in rural America, including in communities that are the cornerstone of America’s softwood lumber industry.

In kicking off the monthlong observation, Joel Baxley, acting assistant to the secretary for rural development, noted that “by helping rural Americans achieve the dream of homeownership, USDA is supporting benefits that extend far beyond the home, resulting in stronger, more prosperous rural communities.”

To learn more about National Homeownership Month, contact a USDA Rural Development State Office near you.