Reported manufactured housing production data is in month eight (8) of a year-over-year downturn that began in the waning months of 2022. The Texas Real Estate Research Center (TRERC) in conjunction with the Texas Manufactured Housing Association (TMHA) provided MHProNews and others in media with their latest ‘sentiment’ survey dated July 18, 2023. While the information may be ‘technically’ accurate, by accident and/or design it is also apparently misleading too, as will be demonstrated below. TRERC was asked about that issue, and their response will be provided in Part II of this report with analysis and expert commentary. Part I of this report is the information from the TRERC and the TMHA, the later of which is deemed by the Manufactured Housing Institute (MHI) to be one of their state ‘affiliates.’ TRERC’s reports are apparently linked, per the implication of their disclosure below, with MHI member firms. It is unclear to what extent TRERC’s team grasps the nuances of what is reported herein, but the TMHA and numbers of their producers certainly should. MHProNews’ Masthead added facts, evidence, and more analysis will all be included in Part II, along with TRERC’s initial and swift response by Bryan Pope at TRERC and about concerns with their reports.
Other insights will be provided and linked herein below.
Part I
Texas manufactured housing expansion continues, more growth on the horizon
COLLEGE STATION, Tex. (Texas Real Estate Research Center) – General business activity increased for Texas’ housing manufacturers for the fifth consecutive month in June, according to the latest Texas Manufactured Housing Survey (TMHS), and more momentum is expected to build during the second half of 2023.
The TMHS production and sales indices reached annual highs and accelerated heading into the mid-year mark.
“There was real concern from manufacturers about overstocked inventory on retail lots and the headwind of rising interest rates throughout the back half of 2022,” said Rob Ripperda, vice president of operations for the Texas Manufactured Housing Association. “Demand for housing, however, remained resilient, and retailers posted strong sales so far this year.”
“Those sales have brought wholesale orders up for the past four months and have afforded manufacturers the ability to increase their capacity utilization and get their backlogs back to their preferred 4- to 12-week range,” continued Ripperda.
The TMHS backlog index reached an annual high in June, and respondents anticipate some additional increases over the next six months.
An uptick in supply-chain disruptions could have also contributed to the growing backlog, but upstream operations are expected to remain smooth after two years of pandemic volatility.
“Housing manufacturers predicted the improved business environment as early as November 2022, a period when higher interest rates had halted new orders and run rates,” according to Dr. Harold Hunt, research economist at the Texas Real Estate Research Center (TRERC). “As those predictions have played out, there is less uncertainty and ongoing optimism moving forward.”
Several forward-looking indices in the TMHS corroborated the positive outlook for the second half of the year, with manufacturers planning on payroll expansions and increased capital expenditures to keep pace with business activity.
All TMHA members with manufacturing facilities in the state were invited to participate in the sentiment survey, and the survey panel represents 89 percent of HUD-code homes produced in Texas.
Funded by Texas real estate licensee fees, TRERC was created by the state legislature to meet the needs of many audiences, including the real estate industry, instructors, researchers, and the public.
—30—
Part II – Additional Information with More MHProNews Masthead Analysis and Commentary
The following was the emailed exchanged between MHProNews and Bryan Pope, Senior Editor of the Texas Real Estate Research Center Division of Academic and Strategic Collaborations | Texas A&M University.
| from: | L. A. Tony Kovach for MHProNews.com | ||
| to: | “Pope, Bryan E” Senior TRERC Editor @tamu.edu |
||
| date: | Jul 18, 2023, 11:33 AM | ||
| subject: | Re: News release: Texas manufactured housing expansion continues, more growth on the horizon |
Bryan,
Pardon me, but this latest report makes statements that were apparently contradicted by Cavco Industries (CVCO) CEO and Manufactured Housing Institute Vice Chairman William Bill Boor in his remarks to Congress last Friday.
Then, per your prior message on 5.16.2023: “Good afternoon, Tony. You are correct – this is a sentiment survey. We’ll make sure future news releases are clear on that point to prevent any confusion. We appreciate the feedback.” I’m not seeing that clarity in what follows.
“Housing manufacturers predicted the improved business environment as early as November 2022, a period when higher interest rates had halted new orders and run rates,” according to Dr. Harold Hunt, research economist at the Texas Real Estate Research Center (TRERC). “As those predictions have played out, there is less uncertainty and ongoing optimism moving forward.”
Bryan, the following screen captures are compiled from MHARR‘s reports, most months going back several years are linked here. Because Texas is #1, it makes checking the data – which uses HUD’s official figures – rather easy to double check. While this may be technically correct, it doesn’t reflect the fact that production is down sharply from a year ago.
Bryan, the following screen captures are compiled from MHARR‘s reports, most months going back several years are linked here. Because Texas is #1, it makes checking the data – which uses HUD’s official figures – rather easy to double check. While this may be technically correct, it doesn’t reflect the fact that production is down sharply from a year ago.
While the remarks could be said to be inconsistent, nevertheless Cavco’s Boor said the following to Congress on Friday.
“If finalized as proposed, these standards would significantly threaten the affordability of new manufactured homes – our nation’s most affordable homeownership option – by imposing costs on homeowners that far exceed any reasonable value placed upon the hoped-for energy savings. Stated otherwise, low-income consumers will be forced bear the cost of an overzealous and ill-informed approach to ESG at the expense of the American dream of homeownership, but also, perhaps counterintuitively, at the expense of helping households move into what for most would be newer and more energy-efficient housing than they have now.”
That’s hardly “optimism,” don’t you agree?
Boor also told Congress:
“My testimony will also touch on other manufactured home availability and affordability issues where we believe Congress and federal agencies can take constructive actions to expand homeownership opportunities. Rather than artificially making it more difficult for us to produce quality, affordable housing we believe there are things that Congress and federal agencies can do to facilitate the availability of manufactured housing.”
What makes the above interesting is that you may recall that I’ve previously raised some of the same issues with your predecessor that Boor raised with Congress on Friday. Namely, that HUD is not properly enforcing the Manufactured Housing Improvement Act (MHIA) of 2000’s enhanced preemption provision, nor is the FHA or FHFA properly providing the financing support via FHA Title I, or Duty to Serve (DTS) manufactured housing chattel lending support that Congress made law years ago. Our reports and analysis are always grounded in known facts and evidence.
My concerns include, but are not limited to, that you are not only harming your own reputation(s), but you are potentially misinforming the public and industry members, as some others simply reprint what you provide with no analysis or clarifying commentary.
Per Boor to Congress:
“The manufactured housing industry is at a critical crossroads due to regulatory barriers and market forces. Cumulative shipments from January 1 through April 30, 2023, decreased by 30 percent compared to the same time period of 2022. April 2023 shipments were down 34 percent compared to April 2022 shipments. These decreases in shipments are being caused by prospective homeowners being priced out of potential purchase due to increased costs of construction and skyrocketing mortgage interest rates – factors affecting all segments of the housing industry. When families are priced out of buying a manufactured home, they are priced out of the security and wealth-building benefits of homeownership.”
That hardly sounds like “optimism.”
It seems to me that since MHProNews has advised TRERC about these concerns several times, there is a false optimism being provided to your readers.
What can be done to correct this problem, please? The “sentiments” may be ‘accurate’ in some sense, but nevertheless they obviously do not comport with reality and facts that run counter to the narrative that those giving those ‘sentiments’ may hope to convey through TRERC’s monthly reports.
Your solution oriented thoughts on these concerns are appreciated. Thank you.
Tony
[for MHProNews] ##
About 16 minutes later, MHProNews received the following emailed reply from Pope.
| from: | “Pope, Bryan E” Senior TRERC Editor @tamu.edu | ||
| to: | L. A. Tony Kovach for MHProNews.com | ||
| date: | Jul 18, 2023, 11:49 AM | ||
| subject: | RE: News release: Texas manufactured housing expansion continues, more growth on the horizo |
Thank you for the feedback, Mr. Kovach. We appreciate it. All pass it along to the research team.
Bryan Pope | Senior Editor
Texas Real Estate Research Center
Division of Academic and Strategic Collaborations | Texas A&M University … ##
As of 2:29 AM ET on 7.20.2023 no further follow up from Pope or others at the Texas A&M based TRERC has been received.
MHProNews has reported for years that ‘positive news’ and ‘positive research’ about manufactured housing often gets scant attention in mainstream news when compared to the negative news that routinely appears to dominate. That point was conceded by Darren Krolewski with MHI-linked and MHI member Equity LifeStyle Properties (ELS) owned MHVillage’s MHInsider.
Others in the MHI orbit have made similar remarks and admissions. So, it is not only MHI critics, such as the Manufactured Housing Association for Regulatory Reform (MHARR) or those who seek accountability from MHI leaders who have expressed evidence-based concerns that MHI is not doing its job properly, despite the odd periodic praise for CEO Lesli Gooch, Ph.D., or others involved in MHI leadership.
Yesterday, on 7.19.2023, this editorial writer for MHProNews/MHLivingNews had remarks delivered to the Federal Housing Finance Agency, one of about 2 dozen individuals and experts in the country to do so. Those remarks are found linked below.
Those linked remarks reference “A Pimple on an Elephant’s Ass.” Those previous fact- and evidence-based remarks, as in those above, hot-linked the evidence that supported the condensed thesis. Ironically, Cavco’s CEO and MHI Vice Chairman Boor’s remarks to Congress generally confirmed that years of concerns raised by MHProNews and this Masthead writer.
Specifically, Boor said to Congress: “Rather than artificially making it more difficult for us to produce quality, affordable housing we believe there are things that Congress and federal agencies can do to facilitate the availability of manufactured housing.” He also said this.
“The manufactured housing industry is at a critical crossroads due to regulatory barriers and market forces. Cumulative shipments from January 1 through April 30, 2023, decreased by 30 percent compared to the same time period of 2022. April 2023 shipments were down 34 percent compared to April 2022 shipments. These decreases in shipments are being caused by prospective homeowners being priced out of potential purchase due to increased costs of construction and skyrocketing mortgage interest rates – factors affecting all segments of the housing industry. When families are priced out of buying a manufactured home, they are priced out of the security and wealth-building benefits of homeownership.”
TRERC and the TMHA have for months conveyed something quite different. Consider these headlines and reports as evidence. Instead of “Ready for a Rebound” in February 2023, it is now July 2023 and the ‘rebound’ is not confirmed by Boor. Boor in fact called it “a critical crossroads” caused by “regulatory barriers and market forces.”
MHProNews called into question another 2023 report by TRERC by pointing to the hard facts. To their credit, TRERC replied to such concerns and admitted that they needed to clarify their reports to make the bright line distinction between “sentiments” measured by TRERC and facts.
As MHProNews has previously reported, another oddity is that Boor seems to have contradicted himself in what he said during a quarterly earnings call to analysist Gregory Palm.
Texas, and all of manufactured housing, hit levels of production so low that they have not been seen for over a decade. Which begs the question: why are some praising MHI leadership, such as Gooch? Is it because they like low production because it helps facilitate consolidation, which numbers of MHI members – including Cavco – have said in their published statements is a high priority for their firm?
Boor and MHI leaders can’t have it both ways. Because Boor is correct: “These decreases in shipments are being caused by prospective homeowners being priced out of potential purchase due to increased costs of construction and skyrocketing mortgage interest rates – factors affecting all segments of the housing industry. When families are priced out of buying a manufactured home, they are priced out of the security and wealth-building benefits of homeownership.” To learn more, see the sobering facts and analysis found in the articles linked herein, including the one that follows. Because if not for MHARR, MHProNews, and MHLivingNews reports, fact checks, and analysis, tens of thousands inside manufactured housing and untold numbers beyond the industry would be getting a steady diet of paltering, posturing, red herring and circus tactics of “deception and misdirection” instead of hard facts and clear analysis of those facts. As attorney John Whitehead recently said, ‘circus politics are intended to distract us. Don’t be distracted.’ Manufactured housing should be soaring. But Boor admitted to Congress that the industry is at a risky crossroads instead.
Boor’s remarks should be a call for state and federal officials to investigate specifically what’s gone wrong in affordable manufactured housing. Because other attorneys have alleged serious problems that may include felony violations of the law. ##
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By L.A. "Tony" Kovach - for MHProNews.com.
Tony earned a journalism scholarship and earned numerous awards in history and in manufactured housing.
For example, he earned the prestigious Lottinville Award in history from the University of Oklahoma, where he studied history and business management. He's a managing member and co-founder of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.
This article reflects the LLC's and/or the writer's position, and may or may not reflect the views of sponsors or supporters.
Connect on LinkedIn: http://www.linkedin.com/in/latonykovach
Related References:
The text/image boxes below are linked to other reports, which can be accessed by clicking on them.
'Alarming Year-Over-Year Manufactured Home Production Declines Continue' per Manufactured Housing Assoc as Deceptive Trade Practice Concerns about ManufacturedHomes.com, MHInsider, MHI Raised
'Alarming Year-Over-Year Manufactured Home Production Declines Continue', per Manufactured Housing Association for Regulatory Reform, Deceptive Trade Practice Concerns, ManufacturedHomes.com, MHVillage, Equity LifeStyle Properties, ELS, MHInsider, MHI, Lesli Gooch, George Allen, Ben Nelms, Brand Nelms, Patrick Waite, Darren Krolewski, Patrick Revere, Rick Robinson,
