Print-All Page: August 1, 2005

“The bill to overhaul the housing government-sponsored enterprises (GSEs) that was narrowly passed on July 28 along party lines by the Senate Banking Committee represents a missed opportunity to achieve a meaningful regulatory framework that strengthens and safeguards the financial health of the GSEs while preserving their vital housing mission,” said Jerry Howard, executive vice president and CEO of NAHB.

“The 11-9 partisan split accentuates deep misgivings about the bill, and even Republican members of the Senate Banking Committee expressed their reservations with the legislation before ultimately voting for passage,” added Howard.

Before the panel voted on S. 190, NAHB sent a letter to all committee members urging them to oppose the bill because it fails to adequately address the nation’s housing concerns.

The measure approved by the panel would severely curtail the investment portfolios of Fannie Mae and Freddie Mac.

“Basically, it would require Fannie and Freddie to engage in a massive sell-off or run-down of existing holdings,” said Howard. “We feel this would disrupt the mortgage markets and greatly harm the housing finance system.”

The legislation also would give the new regulator unrestricted power to increase GSE minimum capital requirements and onerous program approval authority that could inhibit the development of new products.

The bill does not include an affordable housing fund for Fannie Mae and Freddie Mac. However, an amendment offered by Sen. Rick Santorum (R-Pa.) to strengthen their affordable housing goals was accepted by a voice vote.

NAHB policy states that all housing GSEs should be required to meet appropriate affordable housing goals, as well as set aside a reasonable percentage of their profits to support affordable housing efforts, with a level playing field for for-profit housing sponsors in the criteria for awarding such funds.

Because S. 190 was approved along party lines, and contains no affordable housing fund and drastically reduces allowed investments — provisions that are important to Democrats and also supported by NAHB — the prospects for full Senate consideration of the bill remain highly uncertain.

On the House side, the Financial Services Committee this spring approved H.R. 1461 on a strong bipartisan vote of 65-to-5. The House bill, which is awaiting consideration by the full chamber, contains an affordable housing fund provision and is far less stringent in terms of portfolio limits than its Senate counterpart.

“H.R. 1461 is a tough, but fair bill that represents a good starting point as the debate moves forward. Though not perfect, on balance this is a meaningful bipartisan compromise that deserves congressional support,” said Howard.

To read the legislation, click here and enter the bill number in the box at the upper left.

For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252.

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Apartment Rentals Home to Fewer School-Aged Children

Large rental apartment buildings are not a burden to local school systems, according to a new study by NAHB confirming that significantly fewer children are found in those multifamily residences than any other type of housing.

NAHB’s analysis has also found that enough local income typically is generated by the construction of a new multifamily rental building to offset the increased educational expenses of the school-aged children who will be living there.

An analysis of 2000 data from the Bureau of the Census shows that 100 households in rental apartments in buildings of all sizes have only about 34 school-aged children. By comparison, 76 similarly aged children can be found in the same number of households renting single-family houses.

Among 100 households living in rental buildings with at least 20 units, there are only 20 children, the study found.

An NAHB study last year of American Housing Survey data found 37 school-aged children in 100 multifamily rentals and 62 in single-family rentals.

The latest findings are especially relevant at a time when the cost of public education, already the biggest budgetary item for most local governments, continues to grow and is often used by no-growth advocates as a rationale for their opposition to new housing. Of the more than $1.18 trillion spent by local governments in the U.S. during the 2002-2003 fiscal year, 35.8% was for primary and secondary education, according to the Census Bureau’s Government Division.

The NAHB study did find variations among different metro areas, with a higher than average number of children in rental households in California and Texas, both states with high immigrant populations whose households tend to be larger than those in the general population.

There were 80 school-aged children per 100 multifamily rental households in Visalia-Tulare-Porterville, Calif., which was the highest in the country for this type of housing. Six other California metro areas were in the top 10 for the number of children, and three were in Texas.

At the lowest end of the spectrum, there were only 10 children found in 100 multifamily rental households in Iowa City, Iowa.

California was ranked highest with 50 children in every 100 multifamily rental housing units, and North Dakota was the lowest, with 17.

The Census data show that there are more school-aged children in single-family rental homes than in multifamily rentals in every one of the 297 metro areas included in the analysis.

The new information from NAHB can help local jurisdictions avoid overestimating the cost of multifamily developments and make more informed decisions about residential growth, according to the authors of the report.

For more information, e-mail Ann Marie Moriarty at NAHB, or call her at 800-368-5242 x8350.

Work-Site Thefts Rising

Builders in Florida are typically adding as much as 2% to the cost of a new home to cover losses from construction site thefts, according to the Florida Home Builders Association. The rise in thefts has been particularly big in Central Florida, where about 28,450 homes were built between March 2004 and March 2005. In Claremont, Fla., one of Lake County’s fastest growing cities, there has been a 32% increase from 2003 to 2004, according to the police. Larger home builders, such as Centex Homes, often hire off-duty police officers to patrol work sites, but small builders find the $25-an-hour expense too high. The perpetrators are sometimes workers coming in at night and stealing appliances they installed during the day, and with as many as 30-40 contractors going to a construction site, detectives say it is often difficult to determine who should and should not be there. Thieves are now even operating in the middle of the day. “They treat us as a Home Depot store,” said Frank Beaty, a production manager for Banyan Homes in Clermont, where criminals have hit the majority of his work sites. (www.orlandosentinel.com)
Orlando Sentinel (7/18/05); Martin E. Comas

Alarms Fortify Secure Feeling

Despite a decline in burglaries, electronic security systems are gaining in popularity among home owners, largely because of a significant decrease in their cost over the past 15 years. In 1990, an alarm system cost an average of $1,509, according to J.P. Freeman Co., a Connecticut-based research, consulting and services firm, and the cost fell to about $1,000 by 1999. Today, a system can cost $95, with the buyer signing a $30-a-month monitoring contract. About 32% of homes in the U.S. have security systems today, up from 2% in 1979 and 20% in 1992, Freeman says. Unlawful or forcible entries into homes have declined from 110 per 1,000 households in 1973, to 84 per 1,000 in 1983, 58.2 in 1993 and 29.8 in 2003, according to the annual National Crime Victimization Survey conducted by the Justice Department. In his research on home security since the early 1990s, Simon Hakim, an economics professor at Temple University, has found that homes without security systems are about three times more likely to be broken into and they sustain about $400 more in thefts. (www.washingtonpost.com)
Washington Post (7/23/05); Rebecca R. Kahlenberg

Hot Housing Market Opens Doors for Fraud

Mortgage fraud, which is often committed against working-class and poor Americans attempting to become home owners, is “pervasive and growing,” thriving on “collusion by industry insiders,” according to the FBI’s Financial Crimes Report for May. Suspected major mortgage finance violations reported by financial institutions increased from 4,225 in 2001 to 17,217 last year, and the money lost in that fraud has doubled in just the last year. “We’ve never seen so many schemes and such complexity to the fraud,” said Sarah Ludwig of the Neighborhood Economic Development Advocacy Project, which has helped lead investigations into predatory lending in New York. “Everyone works to defraud: the broker, the appraiser, the attorney and the inspector. Before a home owner knows it, they are in way over their heads.” The fraud includes deed thefts in which overly burdened home owners are persuaded to temporarily surrender the title to their house so that an “expert” can straighten out the mortgage. The “expert” then resells the house to the owner at a vastly inflated price, or simply evicts them. Property flippers are buying foreclosed homes and using false appraisals to mark them up by $100,000 or more. (www.washingtonpost.com)
Washington Post (7/29/05); Michael Powell

The Push to Turn Men Into Appliance Shoppers

With recreation or media rooms in more than a third of the new homes now being built, according to NAHB, up from less than 10% a decade ago, appliance manufacturers and retailers are targeting male consumers with a broad array of appliances, from refrigerators to televisions. Using a sports tie-in, this fall Avanti Products plans to start displaying its refrigerators with huge magnetic panels featuring the logos of Nascar stars to college teams. Hannspree California Inc. has a new line of televisions that look like baseballs, basketballs and golf balls. The baseball TVs come wrapped in Major League-quality horsehide. For motorcycle enthusiasts, refrigerators from Heartland Appliances’ new $5,800-$6,500 Ten50 line come with black doors that feature huge, Harley Davidson-style flames. Some have handles that look like motorcycle handlebars and chrome frames that resemble car grilles. Electrolux AB’s Frigidaire is selling a “Beverage Center” that can hold and dispense a 16-gallon keg of beer from a spigot on the front. (www.wsj.com)
Wall Street Journal (7/14/05); Cheryl Lu-Lien Tan

People With Disabilities Face Discrimination in Up to Half of Rental Inquiries in Chicago

A Chicago-based study conducted by The Urban Institute for the Department of Housing and Urban Development, “Discrimination Against Persons With Disabilities — Barriers at Every Step,” has found that hearing-impaired people were discriminated against about half the time when they used a telephone-operator relay to search for rentals. People using wheelchairs faced discrimination about a third of the time when they visited rental properties, the study found. The study highlighted that people with disabilities frequently have their requests denied for reasonable modification and accommodation necessary to make the available housing fully accessible, and nearly 20% of the housing providers with on-site parking refused to make reasonable accommodation of providing a designated accessible parking space for a wheelchair user. At least one-third of the rental properties advertised in the Chicago area were not accessible to people in wheelchairs. “We would all like to think we have made more progress in educating landlords about the Fair Housing Act, but this study paints a different picture of the problems faced by people with disabilities,” said HUD Secretary Alphonso Jackson. He added that HUD intends to educate consumers and landlords about the rights of disabled individuals. (www.rismedia.com)
RISMedia (7/26/05); Beth Bresnahan

The Quest for Quiet

Beating out crime and litter, noise is the top complaint people have about their neighborhoods, according to the U.S. Census Bureau. In the annual Home Features Survey from the National Association of Realtors®, 65% of the respondents cited soundproofing as an important or extremely important home feature. The survey found that 38% of respondents said they desired less noise throughout the home, while 48% identified their bedrooms as the most important area for quiet. Owners who are concerned about noise are finding that builders and architects are increasingly receptive to working with them to reduce the problem when building a new home or soundproofing an existing one. Home owners who replace hollow-core doors with solid-core versions can reduce interior noise by up to 50%, according to Chris King, marketing manager for interior doors for Jeld-Wen. Pete Della Pietra, project manager for Natelli Communities in Gaithersburg, Md., recommends installing thicker-than-normal drywall in certain rooms, double-pane windows and underlayments beneath tile or carpeted floors. (www.washingtonpost)
Washington Post (7-30-05); Dan Rafter

Speculators Seek Loopholes

As developers crack down on investors who are buying condominiums to flip them for a higher price, speculators are turning to loopholes such as owning units under limited liability corporations or claiming them as second homes. Savvy speculators who are buying “are quite explicit to say it’s not an investment,” said Jack Karabees, director of sales for Hudson Capital. “It’s a loophole in a way. You could have seven second homes.” Speculators can be caught when property records and mortgage filings are checked by lenders. Buyers who are going through the process of setting up an LLC are being told that they will have to close on the property first before it can be resold and that having an LLC doesn’t necessarily mitigate personal liability in the eyes of some lenders. Builders also can refuse to sell their units to corporations and LLCs, which don’t have the same rights as individuals to buy property, according to one legal researcher. (www.southflorida.bizjournals.com)
South Florida Business Journal (7/22/05); Susan Stabley

L.A.’s Lofts Lure What Downtown Has Lacked: Residents

If current housing trends continue, the Los Angeles Downtown Center Business Improvement District expects to double its estimated population of 24,000 by 2008. Driving the influx of residents into the downtown’s historic core is the transformation of the upper floors of vacant, century-old banks and Art Deco headquarters into luxury lofts and condominiums. Of 50 historic buildings identified as candidates for housing five years ago, 44 have already been converted or will be soon, according to the Los Angeles Conservancy. The residential development has spurred interest in more services, with a chain grocery store being built downtown for the first time in 50 years. Another $1.8-billion project will feature a park, gourmet store, entertainment and 2,000 housing units. (www.csmonitor.com)
Christian Science Monitor (7/18/05); Sara B. Miller

What Housing Bubble?

By Neil Barsky
If you want to be scared out of your wits these days, you basically have two choices: go watch Steven Spielberg's latest, or listen to the hysterical warnings of economists and journalists about the imminent popping of our so-called housing bubble. Robert Shiller, the ubiquitous Yale economist, says home prices could fall 50% from their peak. Taking things a step further, The Economist recently went so far as to call the global housing boom "the biggest bubble in history."

In a free country, it is fair game for the media and economists to scare home owners with words of gloom and doom, however knee-jerk, consensual and misguided they may be. But housing is a serious business; for most of us, it is our most valuable asset. For generations of immigrants, homeownership has represented the realization of the American dream.

The reality is this: there is no housing bubble in this country. Our strong housing market is a function of myriad factors with real economic underpinnings: low interest rates, local job growth, the emotional attachment one has for one's home, one's view of one's future earning-power, and parental contributions, all have done their part to contribute to rising home prices. Over the past quarter-century, there has been an explosion of second-home purchases, a continued influx of immigrants and a significant reduction in existing housing inventory through tear-downs. Not all of these trends are accurately reflected in the unending stream of data published daily. Home prices on average have risen at a 6% annual pace since 1999, and 13% over the past year.

What we do have is a serious housing shortage and housing affordability crisis. Despite robust construction, unsold inventory stands at four months, well below its 25-year average. Private builders complain they can't get land permitted to meet demand. Low-income housing advocates complain that housing prices are out of reach for many Americans, and that government subsidies have been slashed.

I am not an economist, though if you keep reading, you'll find I can use selective data points to my advantage with the best of them. I was a real estate reporter for The Wall Street Journal through several real estate crises, as well as a Wall Street REIT analyst; I am now a money manager. I currently own stocks in several home builders; so I am putting my money where my mouth is.

Of course, over the past 25 years we have seen numerous real estate busts. However, steep price declines have typically been driven by local economic factors — oil woes lead to weakness in Texas in the '80s; aerospace and defense layoffs soften up prices in LA in the '90s; a contraction on Wall Street hurts New York co-op prices.

What we have never seen in this country is a collapse of home prices without also seeing local economic weakness or significant capacity growth. Absent those factors, housing markets just don't collapse under their own weight. Herewith are some of the myths put forth by the housing bubble Chicken Littles.

Anyone waiting for prices to collapse before buying a home is likely to be in for a disappointment. According to the Homeownership Alliance, new household formation, replacement demand and second-home demand will require about two million homes per year to be built over the next decade. This year, the number is likely to be around two million, the highest number since the 1970s — even as the number of households has grown by over 50% since 1975. Therefore, there is a large cumulative deficit in housing that will take years to correct even if annual housing starts continue at these record levels.

To the cynical, it is seductive to claim that every piece of good news is a bit fraudulent. And real estate has certainly been subject to boom and bust cycles. But bubbles happen when prices become unhinged from intrinsic value. Homes are not stocks; their "intrinsic value" can only be in the eye of the beholder. A house has utility. Rational people might be willing to pay more for a water view, or for living close to work, or for a larger lot. Such voluntary economic decisions are neither irrational nor exuberant.

It's time to stop being alarmist about home prices. To the extent that policy makers want to modulate home-price appreciation, they would do well to relax zoning laws or stimulate development of low-income housing through tax subsidies. Since those things are not likely to happen overnight, housing prices are likely to cool off slowly, if at all.

Bill Would Help Small Builders Provide Health Insurance

In a key vote for NAHB, the House of Representatives on July 26 passed legislation that would enable home builders and other small businesses to offer better and more affordable health care coverage for their employees.

Sponsored by Reps. John Boehner (R-Ohio), Sam Johnson (R-Texas), Nydia Velázquez (D-N.Y.) and Albert Wynn (D-Md.), H.R. 525, the “Small Business Health Fairness Act,” passed the House with strong bipartisan support.

NAHB President David Wilson noted that the bill “would help address the rising number of the uninsured and skyrocketing cost of health care by allowing small businesses to band together through associations to purchase quality health care at a lower cost.”

The measure would help as many as 2 million previously uninsured workers receive health coverage, according to estimates from the Congressional Budget Office.

The U.S. Census Bureau estimates that there are roughly 45 million uninsured individuals in the country today, up from 41 million four years ago and 43.6 million in the past two years. More than 24 million of these workers are employed by small businesses.

“To underscore the importance of this issue to home builders and the nation’s small businesses, NAHB designated consideration of the measure as a key vote,” said Wilson. “We urge the Senate to act promptly on companion bill S. 545 so that America’s working families can start receiving the cost-effective, high-quality health care coverage they deserve.”

To read the legislation, click here and enter the bill number in the box at the upper left.

For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252.

New Single-Family Sales Hit a Record Pace in June

Sales of new single-family homes surged to an all-time seasonally adjusted annual rate of 1.374 million units in June, according to estimates released last week by the U.S. Commerce Department, which was 4% higher than May’s upwardly revised sales pace and 14% above the sales rate one year earlier.

"Builders expected June numbers to be very strong," said NAHB President David Wilson. "We survey single-family builders regularly, and they indicated that they were solidly optimistic about July."

"The housing market turned in another solid performance throughout the second quarter, showing the strength of demand," said NAHB Chief Economist David Seiders. "A strong economy and favorable market fundamentals, including a low and stable mortgage rate structure, growing employment and increases in household income, are driving the market."

June’s new home sales pace quickened in all four regions of the country, with a 7.2% increase in the Northeast, 5.1% in the South, 2.8% in the West and 2.1% in the Midwest.

The median price for new homes sold in June was $214,800, down from $227,400 in May, probably reflecting a change in the regional and market segment mix of sales, according to Seiders.

The inventory of new homes for sale was 454,000, a 4.0 months' supply at the June sales pace.

"The inventory situation remains very manageable,” Seiders said. “More than 56% of the homes included in the inventory are under construction and a record 22.3% have not been started yet. Because of the limited amount of land available for building in many areas and in anticipation of increased mortgage rates in the coming months, builders' inventories are very lean."

See what's on the horizon for the housing industry at the semi-annual gathering of the country's premier economists and finance experts. Get the latest forecasts on housing starts, project budgets and other economic bellwethers at the Fall Construction Forecast Conference on Oct. 19 at the National Housing Center in Washington, D.C. Visit www.nahb.org/conference for more information.

HousingEconomics Online, the online publication from the NAHB Economics Group, is your single source for market analysis, forecasts, housing statistics and more. In-depth analysis and detailed Excel tables and overviews are available for all the state forecasts. To learn more or subscribe to HousingEconomics Online, visit www.housingeconomics.com.

Existing Home Sales Smash Record in June

Surpassing expectations, existing home sales smashed another record in June, rising 2.7% to a seasonally adjusted annual rate of 7.33 million from an upwardly revised pace of 7.14 million in May, the National Association of Realtors® announced last week.

Sales — including single-family, townhomes, condominiums and coops — beat the previous record of 7.18 million set this April and were 4.4% brisker than one year earlier.

“Just when you think sales activity is ready to settle into a more sustainable pace, the housing market continues to surprise,” said David Lereah, the Realtors®’ chief economist.

“We’ve been expecting sales to remain at historically high levels,” he said, “but this performance underscores the value of housing as an investment and the importance of homeownership in fulfilling the American dream.”

Home sales continued to receive a boost from low mortgage interest rates in June, when conventional fixed-rate loans averaged 5.58%, according to Freddie Mac’s weekly survey, down from 5.72% in May and 6.29% a year earlier.

Job growth and further economic improvements also helped stoke housing demand, Lereah said.

The median existing price for all homes sold in June was $219,000, up 14.7% from a median of $191,000 posted in June of 2004. This was the strongest 12-month price increase since November 1980 when annual appreciation was 15.6%, according to the Realtors®.

The median price of an existing condominium in June was $223,500, somewhat higher than the $218,600 for a median single-family home.

Sales of existing condos and coops set a fourth consecutive monthly record in June, rising 4.5% to a seasonally adjusted annual rate of 960,000 units, up from 919,000 in May.

Regionally, existing homes sales rose 5.5% in the West, where the median price was $317,000; 3.4% in the Northeast, at a median price of $250,000; 1.9% in the Midwest, at $177,000; and 1.1% in the South, at $177,000

Inventory levels rose 3.8% at the end of June to 2.65 million existing homes for sale, representing a 4.3-month supply at the current sales price, the Realtors® reported.

Eye on the Economy

By David F. Seiders, NAHB Chief Economist
The U.S. economy definitely is out of the woods …

Rampant speculation about a faltering economic expansion has now fallen by the wayside. The U.S. economy has shown impressive resilience to external shocks, including record global oil prices and terrorist outbreaks in London, and the economy is displaying solid fundamentals that should carry us forward for some time to come. Indeed, we figure that the current expansion, which began at the end of 2001, is now moving into its “middle innings” and has a long way to run.

We’re now pegging growth of real Gross Domestic Product (GDP) at 3.5% for the second quarter and 3.8% for the third, on par with the solid pace of other recent quarters. GDP growth may slow a bit later this year and in 2006, as slack in resource (labor and capital) markets is gradually reduced, but skillful management of economic policy should help keep growth around a sustainable trend pace for an extended period. At this point, we feel no need to speculate about the timing of the next economic recession.

The growth of aggregate demand and economic output (real GDP) has been strong enough to generate systematic improvement in the national labor market since the fall of 2003, despite historically high rates of productivity growth (output per hour). Even the beleaguered Midwest region is looking somewhat better.

Payroll employment increased by 146,000 in June, according to preliminary data released on July 8 by the Labor Department. The average monthly gain for the second quarter (including revisions for earlier months) now stands at 181,000, compared with 190,000 for the first quarter and 172,000 for the past 12 months. NAHB’s forecast shows maintenance of job growth in this range through 2006.

The labor market report for June showed an unemployment rate of 5.0%, down from 5.1% in May and 5.6% a year earlier. Growth of household employment was 186,000, the labor force grew by only 1,000, and the labor force participation rate slipped from 66.1% to 66.0%. We expect the unemployment rate to hang around the current level for some time, and an anticipated rise in the labor force participation rate should help maintain enough slack in labor markets to support solid growth in employment and output through 2006 and beyond.

The ‘core’ inflation picture has improved despite ongoing economic expansion and oil price shocks …

Extended periods of above-trend growth in economic output (real GDP) typically generate upward pressures on core inflation (excluding prices of food and energy), at least partly through the labor market (i.e., through rising unit labor costs). Strong growth of labor productivity can hold off these pressures, particularly in the early stages of an economic expansion when productivity surges naturally (labor already hired is used more intensively), but at some point labor costs typically become an inflation force. That’s happening in the U.S. now, and some inflation impulses also are coming from commodity prices and non-oil imports.

The inflation issue clearly is on the front burner at the Federal Reserve, and the Federal Open Market Committee (FOMC) has explicitly reserved the right to “fulfill its obligation to maintain price stability” as the Fed moves gradually toward a position of monetary neutrality.

In this regard, recent news on producer and consumer price inflation has been rather reassuring. The Producer Price Index (PPI) for finished goods was dead flat in June, and the core component of the PPI showed a year-over-year advance of only 2.2% — the slowest since last November. The Consumer Price Index (CPI) also was flat in June, and the core CPI was up by only 2.0% on a year-over-year basis ― the slowest since last October. The technically superior chain-core CPI showed only a 1.8% gain, the same as in May.

The May report on personal income and consumer spending also provided an encouraging read on inflation (June data are not yet available). Indeed, the Fed’s favorite inflation gauge, the core price index for personal consumption expenditures (PCE), held at a year-over-year rate of 1.6% while the market-based core PCE price index held at 1.7% — the same as the average for the previous six months. These readings are within the Federal Reserve’s apparent “comfort zone,” as suggested by economic projections contained in the Fed’s semi-annual Monetary Policy Report to the Congress that was delivered by Fed Chairman Alan Greenspan on July 20-21. However, the upper end of the FOMC’s projected ranges is only 2% for both 2005 and 2006, leaving little room for acceleration from the recent pace.

As expected, the Federal Reserve hiked short-term interest rates by 25 basis points at the conclusion of the June 29-30 FOMC meeting. This adjustment took the federal funds rate target to 3.25%, up from 1% when the Fed embarked on the tightening process exactly one year earlier. The bank prime rate has risen from 4.0% to 6.25% in the process.

The FOMC statement continued to describe monetary policy as “accommodative” (even after the June 30 rate adjustment) and retained language to the effect that remaining accommodation can be removed “at a measured pace.” Thus, contrary to some speculation in the markets, the FOMC made no suggestion that a pause in the persistent series of upward rate adjustments is imminent and Greenspan’s recent Congressional testimony reinforced that point.

We’re expecting another quarter-point hike in the Fed’s target for the federal funds rate at the Aug. 9 FOMC meeting and we’re still projecting a funds rate of 4% by year end. Some further increase is likely in 2006 as the central bank seeks out a position of monetary “neutrality,” with or without Greenspan at the helm. (Greenspan’s term expires in January but President Bush may ask him to stay on pending confirmation of a successor).

Greenspan devoted a large part of his July 20-21 monetary policy testimony to the substantial decline in long-term interest rates that’s accompanied the Fed’s progressive increases in short-term rates since mid-2004 ― a pattern he described as “without precedent in our recent experience.”

Back in February, Greenspan characterized the behavior of long rates as a “conundrum,” but he now seems much more confident about the fundamental factors at play. He cited four key factors that are restraining long-term rates: low inflation expectations, smaller risk premiums for inflation uncertainty, smaller term premiums for holding long-term securities (because of lessened volatility in the economy) and a global excess of intended saving over intended investment.

This is pretty arcane stuff, of course, and the explanations don’t necessarily signal where long rates are going or lay out the implications of stubbornly low long rates for the conduct of monetary policy. The question remains: will the Fed continue to raise short-term rates and risk a yield curve inversion?

Greenspan told Congress that an inverted yield curve does not have the same adverse economic implications as in past periods, a statement that raised a lot of eyebrows in financial markets and in the forecasting community. NAHB’s forecast says the Fed will not have to prove that proposition because long-term rates will move up moderately during the second half of 2005 and in 2006 as the Fed systematically moves the federal funds rate to 4% and beyond. Indeed, long-term rates have moved up significantly in recent weeks, aided and abetted by a surprise revaluation of the Chinese currency that provoked questions about the future of Chinese central bank investment in dollar–denominated assets. The 10-year Treasury yield now is hanging around 4.25%, up from 3.90% a month earlier, and we expect this rate to be around 4.5% at year end.

The housing market turned in another strong performance in the second quarter, and the third quarter has started out on a high note as well. Total housing starts held firm in June at a 2.004 million pace, and starts averaged more than 2 million units for the second quarter as a whole. The single-family market was particularly strong, as starts averaged 1.67 million for the quarter.

Issuance of residential building permits increased by 2.4% in June to a seasonably adjusted annual rate of 2.1 million units. Single-family permit issuance nudged up 1.3% to a rate of 1.649 million units for the month and the pace of multifamily permit issuance was up 6.5%. In the process, the backlog of unused single-family permits rose to an historically high level. Builders obviously are facing very strong demand for homes, and drawn-out regulatory processes in many local jurisdictions have encouraged builders to accumulate an unusually large supply of unused permits to be able to meet anticipated housing demand.

Home sales and house prices continued to move ahead in June, showing the strength of demand. Indeed, sales of existing single-family homes and condo/co-op units both hit new records on a national basis and all regions but the Midwest posted record numbers; furthermore, price appreciation accelerated further in both markets, showing year-over-year gains of nearly 15%.

In the new-home market, sales were a record 1.374 million units in June and the months’ supply of homes for sale was a low 4.0 ― both symptoms of a demand-driven market. A record 22.3 percent of the for-sale “inventory” consisted of homes that had not even been started, but for which permits had been issued.

The median price for homes sold in June was $214,800, down from $227,400 in May. That was probably caused by a change in the regional and segment sales mix. There is no evidence that prices are being reduced to stimulate sales.

Surveys of home builders and home mortgage lenders show that strength in the single-family sector extended into July. NAHB’s Housing Market Index was 70 in July, within the elevated range that’s prevailed for the past year, and the index of applications for mortgages to buy homes (Mortgage Bankers Association series) gravitated upward to a new record during the month (four-week moving average basis).

The recent strength of the single-family market has provoked another upward revision to NAHB’s forecasts for home sales and housing starts in 2005-2006. We’re now projecting 2.004 million total starts for 2005, up by nearly 3% from last year, and the forecast shows a record 1.653 million single-family units. We’re projecting total starts of 1.894 million in 2006, with 1.554 million single-family units — down by 6% from 2005. The anticipated setback is based primarily on our forecast of the interest rate structure as well as expectations for a less aggressive adjustable-rate mortgage (ARM) market and a reduced presence of speculators in the single-family and condo markets. (Read the June 29 issue of "Eye on the Economy" for a discussion of these two topics).

We expect national average home price appreciation to slow to some degree in 2006 as sales volume recedes, but the pace of price gains should not fall below the long-term average (around 5%). Price declines could occur in some local markets in 2006, but widespread declines are just about out of the question as long as our forecasts for the economy and the financial markets turn out to be on target.

NAHB Chief Economist David Seiders analyzes the economy from the point of view of the housing market every other week in the free e-newsletter, “Eye on the Economy.” The preceding is a reissue of his July 27 edition. To subcribe to “Eye on the Economy,” click here.

"HousingEconomics Online" is a new online publication from the NAHB Economics Group that provides the latest housing economic data, trends and key events shaping the economy. NAHB’s leading economists analyze and synthesize the housing and economic information to provide in-depth analysis of the niches and nuances of the home building market.

"HousingEconomics Online" combines unique scientific research with practical applications providing insights that are original, useful and written in terms that builders, manufacturers and housing finance professionals can understand and apply to their own businesses. To order, visit the www.housingeconomicsonline.com detail page.

This interactive Web site at the executive level provides critical data and information quickly, easily and frequently and includes the following features:

Builders’ Tip: Keeping Mud Off a House Under Construction

If you are putting siding on a new building in an area where it frequently rains, you may find your newly-sided lower walls spattered with mud after every shower. The problem is worse on walls below eaves that have yet to receive their gutters.

After much brushing, washing and repainting of mud-stained walls, I decided to roll out a 3-foot-wide strip of landscaping fabric on the ground along the wall. It works like magic.

Splashing is just about eliminated. The water hits and passes through. There is no puddling and the fabric doesn’t become slippery the way scraps of sheathing do when used for this purpose.

The fabric also keeps your shoes cleaner, which keeps ladder steps, your hands and, ultimately, the siding cleaner, and it makes nails and small tools easy to recover when dropped.

When you’re done installing the siding, lay down straw for interim splash protection until final grading and seeding are in place.

BuilderBooks.com Offers More Than 250 Books that Help You Build Your Business

BuilderBooks.com is your source for training and education products for the building industry. The official bookstore for NAHB, BuilderBooks.com offers award-winning publications, software, brochures and more available in both English and Spanish. To view these publications online, click here, or call 800-223-2665.

The NAHB University of Housing offers a variety of business management courses and professional designation programs that set builders and remodelers apart from the competition. For a complete list of current offerings, visit www.nahb.org/designations.

Subscribe Your Employees to Nation’s Building News — and a Chance to Win Digital Camera

Subscribe your employees to Nation’s Building News Online. It’s free, easy and NAHB members who sign up three or more employees will be entered into the "Make Your Business Click" contest to win a digital camera. To learn more or sign up your employees, click here.

The New American Home Goes Caribbean, Targets Boomers

The New Amercian Home for 2006

At 9,500 square feet and situated along the shore of Windemere’s Lake Burden just minutes from the Orange County Convention Center, The New American Home® at the 2006 International Builders’ Show will have a distinctive, British-Caribbean flair and squarely target baby boomers.

“It’s a baby boomer, all-about-me house,” said builder Alex Hannigan, president of Hannigan Homes, Inc. “We are trying to achieve a ‘wow’ factor everywhere you go in the house. It will be open and take advantage of the main amenity, which is going to be the lake.”

The New American Home takes shape.

With “wow” very much in mind, architects John Orgren and Flavio Coronel, of WCI Architecture & Land Planning, Inc., designed a wide, two-story home that offers views of Lake Burden from nearly every room in the house. They also incorporated a variety of points of interest to guide the eye across the home’s front elevation, including a two-story tower with a spiral staircase.

The New American Home® has several outdoor spaces planned — including several loggias, an outdoor kitchen, two fireplaces and a boat dock. Inside, there will be a home theater, second-floor library, game room and home office. There will also be a lakefront spa room with its own massage table.

This year’s home is Energy Star-rated through the U.S. Department of Energy program “Building America” and is set to become the first certified “green” home built through the New American Home program. The design is ideal for cross ventilation when the air conditioning is turned off. Other energy and conservation features include HEPA filtration for clean indoor air, a roof gutter system that will collect rainwater to irrigate the landscaping, and mulch made from recycled construction materials.

The two-story tower includes a spiral staircase.

The home will also have an elevator.

Tom Davis, project manager of The New American Home®, said this year’s home answers the needs of many builders for simple technology and a home environment that will provide for an active, healthy, environmentally responsible and engaged life.

The New American Home® can be toured during the 2006 International Builders’ Show, which will be held Jan. 11-14 in Orlando.

For more information, see details of The New American Home® on the builders’ show Web site, www.buildersshow.com.

Technology for the Home Building Industry: An Overview

By Jordan B. Zimbelman
The marketplace is filled with hardware and software that can improve your business. The following is an overview of the new business technologies available to the home building industry.

If you currently don’t use technology in your business, your first step should be to get your back-office operations in order. The more projects you work, the more paperwork — invoices, receivables, change orders and headaches ― you have. A simple, easy-to-learn accounting system can keep you organized.

Accounting systems enable you to know when you’re making money and when you’re losing it. They generate project reports itemizing the costs that you’ve paid as well as the money you’ve received. Accounting programs also provide a quick snapshot of each project’s production cycle status.

Accounting systems are quicker and more accurate than balancing your books by hand and can help you avoid costly and embarrassing mistakes.

Also, accounting software alone can speed up your budgeting process by providing an easily-referenced database of past projects and their associated costs.

Estimating software can integrate with an automated accounting system and with computer-aided design (CAD) software to create project plans that are detailed down to the number of boxes of nails needed for a certain project. Automating the process saves time, guards against data entry errors and assures integrity among different management reports.

Imagine a system that keeps you in complete financial control. First it estimates each project and finalizes the budget with actual bids. Then, as you purchase materials and pay trade contractors, the software updates the budget in real time. The system projects future cash flows and required reserves on a companywide basis. It generates easy-to-read management reports that help you track your business liquidity. Using such a system is almost like having your own CPA and chief financial officer.

For more information on estimating software, read Jim Girardi’s Tech Talk article in the Business Management Tools section of the NAHB Web site (link available to NAHB members only).

As your business continues to grow, communication between the office and the field becomes more complicated. Just think of how much effort it takes to issue and track a typical customer change order — especially when the customer changes his mind more than once.

Fortunately, wireless technology makes it possible for superintendents to process information electronically. This saves the trouble of making phone calls and reduces or eliminates cumbersome paperwork.

Project management software maintains an online database that contains all purchase orders, variance orders (unplanned items usually initiated in the field) and change orders. The software also helps eliminate problems that may arise from the mountains of duplicate paperwork generated the old fashioned way.

With a wireless project management system, payment approval is moved from the back office to field personnel who receive material shipments and approve trade contractors’ work. With an electronic purchase order at his fingertips, your superintendent has a quick checklist to compare against invoices. Handheld communications devices can help shorten cycle times and reduce mistakes, which results in happier vendors and ultimately a bigger bottom line.

Technology can help you in the sales office, too. With the help of CAD software, your customers can take digital walkthrough tours of your models at a computer terminal. Virtually any options (elevations, floor plans, finishes, etc.) can instantly be swapped out and displayed on the computer screen.

You also can use your company Web site to usher customers through the building process. They can view images of the construction site, ask questions and post product selections and change orders.

A customer-oriented Web site is an effective way to differentiate your business from others. If you want your customers to be involved in the home building process, they can and should be. Happy customers produce smoother closings.

Technology cannot answer big-picture questions like, “What market should I enter?” or “How can I adapt to a changing customer base?” but it can make the decision process a little easier.

Online research can supply you with information about demographics, market potential and geographic confinement, as well as sales and existing inventory reports. You can also monitor labor and material rates across different states, making due diligence a little less painful.

For more information on strategic planning technology, read Allen’s "Stategic Planning" Tech Talk article (link available to NAHB members only).

When you decide to upgrade your technology, determine what type of software will benefit your business and how it will improve your operations. Then find a vendor to provide it. Visit the Technology Solutions Directory at www.nahb.org/tsd for a comprehensive listing of software and IT vendors

Jordan B. Zimbelman is a graduate student in finance at Kansas State University. He is working with NAHB’s Business Management Department as an intern this summer. For more information, e-mail Zimbelman, or call him at 800-368-5242 x8498.

Portions of this article are excerpted from NAHB’s Tech Talk article series. You can read the entire series by visiting the Tech Talk series listing link on the NAHB Web site. The series links are available to NAHB members only.

Turning Down the Heat of That Burning Question

If you haven’t had one knock on your door recently, you probably will be getting one soon. You know, the prospect who has just been “burned.” Through no fault of your own, they don’t trust you or any other remodeler.

So the “burning” question for you, as an industry professional, is how do you respond to this type of consumer?

You could just say to yourself, "Well, you didn’t get burned by me,” and continue going about your usual business. But that is probably not in the best interests of this potential customer — a person you ostensibly are in the business to serve, educate and guide through the remodeling world.

The right approach is to expend a little more effort in order to gain their trust. Provide them with more accurate information and assurances and proof of your professionalism, abilities and responsiveness. If you and the other pros in this industry don’t step forward to do this, who will?

Educate them on how to avoid getting burned by using yourself and your company as a positive example. Start by telling them a little about how you operate, your procedures and how you handle different phases of the process?

You also can tell them about some of your company policies and your company structure.

Offer to show them a letter or picture or, heck, give them the phone number of a past or current customer (with that customer’s permission, of course) who’s willing to discuss a job you did for them.

These things will help restore the burned customer’s faith in the remodeling industry, and that's an endeavor for all of us — improving the image and performance of our industry. Remember, a club of one doesn’t help anyone, not even the one. But when our industry’s image rises, we all rise with it.

I believe that we owe it to any prospects who fit this profile to help them to overcome their anxiety and concerns, whether real or perceived. It’s good business to take a few minutes out of your day to answer that call and provide some sound advice, tips and pointers ― no matter what the outcome. It helps the industry, it helps you and, bottom line, everyone is a potential source of leads for your next customer.

Nation's Building News Correspondent Greg Miedema, CGR, CAPS, is president of Dakota Builders in Tucson, Ariz. He is chair and founder of his local Remodelors™ Council, a member of the NAHB Remodelors™ Council Board of Trustees and currently serves as the chairman of the Remodelors™ Council Public Affairs Committee. The Southern Arizona Home Builders Association (SAHBA) has named Dakota Builders, Inc. Remodelor™ of the Year in 1998, 1999, 2000 and 2003. For more information, send him an e-mail.

"How to Find a Professional Remodeler," available at BuilderBooks.com, promotes the professionalism of your remodeling business by offering valuable advice to your customers on the process of selecting a remodeler. The brochure guides consumers from the dream to the reality of having their homes remodeled by skilled and trained professionals. Sections include what to look for in a professional remodeler, what questions to ask and signs of a professional remodeler. To view or puchase this publication online, click here, or call 800-223-2665 to order.

The NAHB University of Housing offers CAPS, CGR, CGB and a variety of other professional designation programs and business management courses that set builders and remodelers apart from the competition. To learn more about NAHB’s designation programs, visit www.nahb.org/designations. For a complete list of all current education offerings, click here.

The Remodelor™ of the Month (this link is accessible to Remodelors™ Council members only) award program is underway. Don't miss your opportunity to be named the Remodelor™ of the Month.

The program groups local councils from different states into designated months. There will be two “wild card” months that will allow the council’s members-at-large to participate in the program. A winner will be chosen each month and that winner will then be automatically included in the nominations for the Remodelor™ of the Year award.

This is a great opportunity for local councils and members to get involved and submit their “best of the best” members to compete with other councils. The national Remodelors™ Council will send out press releases and highlight each winner in ReNews, the Remodelors™ Council e-newsletter.

Informal Living Trend Found by Architect Design Survey

Business is good for architects working in the residential sector, with 44% of the firms reporting a 5% increase in their overall billings for the first quarter of this year and the typical firm having more than five months worth of work under contract, according to a survey released by the American Institute of Architects (AIA) in June.

“Our data demonstrates that the remodeling market, for both additions/alterations and kitchen/bath renovations, were the strongest sectors in the residential market for the first quarter of 2005,” said Kermit Baker, the association’s chief economist.

“Additionally, the condominium and town house market was nearly as strong, with over half of firms reporting improving conditions for these units,” Baker said. “We have found that the primary drivers in this particular market are young adults and empty-nesters who are interested in moving into urban neighborhoods.”

The first in a series of Home Design Trends Surveys identified “a significant shift in consumer preference from formal living and dining rooms towards more ‘informal features’ featuring an open space layout of family rooms, dens and activity rooms,” Baker said.

The AIA Design Trend Survey is being conducted on a quarterly basis. Future surveys will cover home features, emerging design trends and kitchen and bath features and products.

Hot Weather Poses Hazards for Workers

Heat-related deaths of a construction worker and two farm workers in California’s Central Valley last month demonstrate the need for employers and their employees to be able to prevent and recognize the symptoms of potentially fatal heat-related illnesses.

Dizziness or lightheadedness; weakness; mood changes or the inability to think straight; an upset stomach; vomiting; decreased or darkened urine; fainting or passing out; and pale, clammy skin are all symptoms of heat exhaustion that workers need to watch for on hot summer days.

When precautions aren’t taken, physical work in high temperatures and high relative humidity can be a recipe for heat exhaustion, which occurs when the body is unable to cool itself sufficiently through sweating. If prompt action isn’t taken to treat heat exhaustion, the victim can suffer a heat stroke or even die.

The National Weather Service warns that high humidity can make hot temperatures especially dangerous because it retards the evaporation of sweat that cools the body down. At a relative humidity of 50%, fatigue is possible at a temperature even as low as 80 degrees. At a humidity of 70%, sunstroke, heat cramps and heat exhaustion are possible at 85 degrees, becoming more likely at 90 degrees. When the thermometer rises above 95 and the humidity is 70%, the heat index can be 130 degrees or higher, and that is a prescription for heat stroke with continued exposure.

If a worker appears to be suffering from heat exhaustion, the U.S. Occupational Safety and Health Administration (OSHA) recommends moving them to a cool, shaded area to rest. If symptoms include dizziness or lightheadness, the victim should lie on their back with the legs raised 6 to 8 inches. If symptoms include nausea, the victims should lie on their side.

Loosen and remove any heavy clothing, have the person drink cool water unless they are sick to the stomach, and cool them down by fanning and spraying with a cool mist of water or applying a wet cloth to their skin. Call 911 if the person does not feel better in a few minutes.

For “Protecting Yourself in the Sun,” a two-page publication with suggestions to protect employees from harmful radiation, click here. For a Spanish version, click here.

For a “Heat Stress Card” with information on heat stress symptoms and first-aid techniques, click here. For Spanish, click here.

For more information, e-mail George Middleton at NAHB, or call him at 800-368-5242 x8590.

Delays in construction due to poor safety procedures will cost you money. To protect your job site against OSHA violations, go to www.builderbooks.com/Safety. BuilderBooks.com has the resources you need to create a safety program that protects your workers — and your profits. Bulk prices are available. To view these publications online, click here, or call 800-223-2665.

Certified Graduate Designees of the Year Entries Sought

Participating program designees will be judged on the promotion of their designation to customers and their efforts to mentor and recruit new program participants. They will also be evaluated on how they have elevated the image of the designation through participation in local events or activities.

Winners will be selected by the boards of governors of the CGB, CGR and CAPS programs and will be announced at the third annual graduation reception at the 2006 International Builders’ Show in Orlando, Fla.

“It’s always exciting to win an award,” said last year’s CAPS winner, David Mathews, “but it’s really a chance to see what other people are doing with their designation and how they are making it work.”

The Designee of the Year Award program was begun in 2004 when the boards of governors decided to highlight the impact NAHB’s designation programs were having on members.

One of last year’s CGA nominees, Dianne Beaton, said that coupling the awards ceremony with the graduation reception “helps to get the message out that it’s worth pursuing designations, plus it teaches that you can always learn something new. It really shows that if you believe in the organization and the power of education, your designation can bring you rewards that you don’t even know about.”

To apply for the title of Designee of the Year, contact the Professional Designation Help Line at 800-368-5242 x8154. Completed forms should be sent to Tara Occhipinti by Sept. 30.

The graduation reception will be held 6:30 p.m. Wednesday, Jan. 11, at The Peabody Orlando. Advance registration is free to all designation holders and one guest. The fee for designation candidates is $40.

Education Calendar

Whether you’re new to the industry, hope to make your next career move or want to improve your company’s bottom line, The NAHB University of Housing can assist you in your education pursuits.

Visit www.nahb.org/education for a comprehensive listing of courses throughout the country. Be sure to visit often in order to view the most up-to-date information in your area.

Subscribe Your Employees to Nation’s Building News — and Earn a Chance to Win Digital Camera

Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB.

Twenty Easy Steps for Creating Persuasive Direct Mail

"Put it before them briefly so they will read it, clearly so they will appreciate it, picturesquely so they will remember it, and, above all, accurately so they will be guided by its light."
— Joseph Pulitzer

Good letters are good for business. Here are 20 simple rules for writing persuasive direct mail and business letters that will definitely not win you a Pulitzer, but if followed, will render you closer to the goal you seek.

From NAHB’s Membership Minute, a service of the NAHB Membership Team primarily for membership staff of home builders assocations. To subscribe, e-mail membership@nahb.com with "sign me up!" in the subject line.

For additional cutting-edge sales and marketing information, subscribe to NAHB’s Sales + Marketing Ideas magazine. Call 800-368-5242 x8192 or visit www.smimagazine.com to subscribe or order a copy. Click here to learn about membership benefits of the National Sales and Marketing Council and the Institute of Residential Marketing.

The Insititute of Residential Marketing Offers Courses and Designation Programs for Sales & Marketing Professionals

The Institute of Residential Marketing (IRM) offers four designation programs for sales and marketing professionals:

BuilderBooks.com offers a variety of sales and marketing publications online. To view or purchase these publications, click here.

Tour Provides Insights on Concrete Technologies

Rookies and veterans alike in the residential concrete industry found what they were looking for at the Concrete Home Building Council’s recent two-day Concrete Technologies Tour at which more than 100 attendees from across the country visited facilities in the Kansas City, Mo. area.

“Prior to attending the tour, my only experience with concrete was as a foundation, driveway or sidewalk material,” said James Trumble, a remodeler based in Ann Arbor, Mich. “The tour opened my eyes to the many different uses of concrete. The people I met on the tour, and the lessons I learned, helped prepare me to take advantage of those uses.”

Trumble said that the tour provided him with direct access to experts in the industry’s various disciplines, including manufacturing, production, business owners and association staff, and they were able to provide him with information that “would have taken me years to assemble on my own.”

“The most fascinating part of the tour wasn’t the actual process or technology, but it was how serious our hosts were about getting the rock out of the mine, getting the cement portioned perfectly, mixing the concrete under as close to ideal conditions as possible, applying spectacular finishes through staining and coloring,” Trumble said. “Additionally, the robotics employed by the various form manufacturers was a demonstration of their commitment to perfection.”

Based on the knowledge he gained on the tour, Trumble said that he will be using Insulated Concrete Forms (ICFs) for the first time in his next two projects.

The tour of concrete technologies started underground in the Hunt Midwest Material Subtropolis, the world’s largest underground industrial park. Carved out of a limestone quarry, the facility is currently 5 million square feet in size and will eventually grow to 50 million square feet. Tour participants were able to see actual blasting in the ongoing excavation that is adding space to the subtropolis.

From there, the attendees received a first-hand view of the cement process at a Lafarge manufacturing plant, and then moved on to a Concrete Materials Company Degussa and Scoffield ready-mix plant where they saw demonstrations of concrete stamping, staining and overlays.

The first day of the tour ended at a Miller Materials concrete masonry plant, where concrete paver machines were running at full throttle.

Day two started out at ACH Foam Technologies, where attendees learned the process of making insulated concrete forms, as well as ice chests and garage insulations. From there Western Forms displayed the removable form industry in the above-grade world, how it’s done and the potential it has. The tour then went on to view insulated concrete form homes in different stages of development by C&C Concrete Specialists.

The tour ended with a visit to Wall Ties & Forms’ removable form manufacturing plant, where industrial robots were the center of attention.

Next year’s tour will visit Arizona to view an autoclaved aerated concrete plant, a post-tensioned plant, roof tile manufacturing and a post-tension masonry subdivision. Also included will be a more in-depth cement plant tour.

For more information, e-mail Dawn Faull at NAHB, or call her at 800-368-5242 x8362.

Almost 100 ICF Home Designs Available on New CD

Nearly 100 home designs for insulating concrete form (ICF) construction are available on a new “Home Plan CD” released last month by Reward Wall Systems.

Almost a year in development, the CD has been designed to allow home builders to easily browse design plans based on the features they most desire.

Helpful tips on the CD demonstrate the comfort and cost savings that can be attained in homes using the innovative concrete technology. The CD also includes information on the durability of ICFs and their ability to eliminate allergens, mold and noise.

While construction costs for a Reward concrete home can run from 0%-5% higher than a traditionally built house, depending on its size and design, the technology will result in savings that more than make up the difference, the manufacturer says, including as much as a 50%-80% savings on monthly heating and cooling bills and lower mainetnance and insurance costs.

Reward concrete walls also elminate cold or hot spots in the home, keeping temperatures uniform throughout, and are significantly more wind- and fire-resistant than wood-frame houses.

Located in Omaha, Neb., Reward Wall Systems was the first national manufacturer of two complete and diversified lines of insulating concrete forms for residential and commercial structures.

Customers of the company include general, residential and concrete contractors and construction supply distributors.

To order copies of the “Home Plan CD,” contact the Reward Wall Systems customer service department at 800-468-6344.

Utah Builder to Tap Into Expanding Market in Mexico

Carlos Reynaga (l) and Bryson Garbett, of Garbett Homes, to build in Mexico.

Garbett Homes, based in Sandy, Utah, plans to build 100-500 townhouses for an underserved but expanding middle-class housing market in Mexico. Bryson Garbett sees the venture as an opportunity to serve a particular market niche and expand his business.

He said he will build townhouses in the $140,000-$170,000 price range styled like the townhouses he currently builds in Utah for first-time home buyers. Garbett already has incorporated as a Mexican business and is currently negotiating to purchase about 30 acres to build on.

Recent reforms in the mortgage and finance market initiated by Mexican President Vincente Fox have given the Mexican middle class access to more options. Mexican banks now offer mortgages of up to $150,000, and Fox hopes to boost the number of mortgages offered from 535,000 in 2004 to 750,000 next year.

Public and private creditors are responding and projecting big gains, as well. This year, BBVA Bancomer, part of Spain's Banco Bilbao Vizcaya Argentaria, plans to boost lending to individuals by 84% and to developers by 64%.

Garbett is not going into business in Mexico alone, however. He is teaming up with Mexican businessman Carlos Zepeda Reynaga, a chemical engineer with an MBA from Brigham Young University in Utah.

Though Reynaga had no previous experience in the housing industry, he gained much needed insight while attending NAHB’s 2nd International Housing Conference of the Americas in Mexico City in 2004. Reynaga said the conference helped him transition into the housing industry. He and Garbett were able to develop strong business contacts — including developers and representatives from several financial organizations — through the conference as well. In addition, NAHB’s Rita Feinberg, executive director of the International Department, provided them with valuable financing options and contacts.

The 3rd International Housing Conference of the Americas will be held in Mexico City on Nov. 3-5. For more information or to register, visit www.nahb.org/mexicoconference.

Tucson Plumbing Trainer Named ‘Instructor of the Year’

John Gallagher, a Home Builders Institute (HBI) plumbing instructor at the Fred G. Acosta Job Corps Center in Tucson, Ariz., was named the “Instructor of the Year” during an annual training conference for HBI instructors in New Orleans last month.

HBI trains more than 70 students a year in plumbing, facilities maintenance and electrical wiring at the Acosta campus. Gallagher, who is lead instructor there, was honored for demonstrating exceptional leadership in his daily interaction with students, center colleagues and the surrounding community.

The Instructor of the Year was selected from the winners of six “Manager’s Choice Awards” for outstanding achievement in each of the nation’s Job Corps regions. Gallagher is located in Region VI, where HBI programs are conducted on 15 Job Corps campuses in Alaska, Arizona, California, Hawaii, Idaho, Oregon and Washington.

Gallagher formed his region’s first NAHB Student Chapter, which is sponsored by the Southern Arizona Home Builders Association (SAHBA). The chapter provides HBI students with the benefits of NAHB membership and valuable ties to the local residential construction industry. Students and instructors also have received complimentary passes to SAHBA’s three annual industry shows.

“John is an excellent teacher, committed to his students and to their success after Job Corps,” said Edward Taczanowsky, SAHBA president. “He is a genuine credit to the entire home building industry.”

Gallagher has worked with members of the home builders association such as Becklin Construction and Pulte Homes to provide his students with educational experiences on the job site.

Following a nomination by Gallagher, HBI Acosta graduate Fabian Liera received the NAHB President’s Award earlier this year for his accomplishments and dedication to the industry. A work-based learning program has been established at Ironwood/Winnelson Plumbing, which is owned by Liera.

For more information, e-mail Maria McIntyre at HBI, the workforce development arm of NAHB, or call her at 800-795-7955 x8912.

Wood-Burning Stoves Focus of Clean Air Campaign

Based in Orange, Calif., Lennox Hearth Products is a division of Lennox Industries, which is a member of the National Council of the Housing Industry (NCHI) — the Supplier 100 of NAHB. The Hearth, Patio and Barbecue Association is also an NCHI member.

The association’s campaign has raised $1 million in donations from the wood stove industry to provide more than 300 low-income county residents with EPA-certified stoves, which reduce emissions by 90% compared to a traditional wood-burning stove and do not require as much wood to burn.

Lincoln County is receiving additional EPA funding to coordinate the replacement of the community’s remaining 1,200 non-certified wood stoves over the next two to three years. The Montana project will serve as a model for the EPA’s “Great American Wood Stove Change-out Campaign” in other parts of the country.

Widespread use of older wood-burning stoves is blamed for 80% of the pollution in the Libby valley, where smoke gets trapped overhead and can linger for days until a new weather front moves through.

Lincoln County is one of 208 whole or partial counties across the country, plus the District of Columbia, that the EPA has designated as “non-attainment areas” because they do not meet the Clean Air Act standard for fine airborne particulate matter.

The EPA estimates that 80%-90% of the wood stoves currently being used by 10 million Americans are older stoves that emit unhealthy combinations of fine particulate matter.

Lennox offers several EPA-approved wood stoves as well as a full selection of EPA-approved wood, gas and electric fireplaces and pellet stoves.

The latest addition to the Dave Lennox Signature™ Collection, the high-efficiency, wood-burning Villa Vista fireplace features the latest fire view in its category and can heat up to 2,500 square feet with a powerful and efficient 70,000 Btu catalytic combustion burner.

This feature is solely for educational and informational purposes. Nothing on this page should be construed as policy, an endorsement, warranty or guaranty by the National Association of Home Builders of the featured product or the product manufacturer. The National Association of Home Builders expressly disclaims any responsibility for any damages arising from the use, application or reliance on any information contained on this page.

NAHB-Produced Shows on HGTV & DIY — This Week

The NAHB Production Group is a full-service, self-contained, media production unit creating programming for cable television, broadcast television, non-profit, museum and corporate clients. Productions range from magazine format shows for general audiences to museum-installation videos for specialized use.

The production group includes award winning journalists, writers and photographers with experience in broadcast, documentary and corporate television.

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Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB.

Herman J. Smith Scholarship Award Winners Announced

The Herman J. Smith Scholarship Fund, honoring 1981 NAHB President Herman J. Smith, provides assistance to graduate and undergraduate students studying construction management, mortgage finance and related fields.

“We are so proud to work with the National Housing Endowment to provide educational opportunities for worthy students,” said Patsy Smith, who established the scholarship in her husband’s memory. “Herman’s favorite motto was, ‘Always leave the woodpile higher than you found it.’ I believe this scholarship is a testament to his philanthropic work and to his great love of this industry.”

Smith serves as a trustee of the endowment and also is the chairman of the Home Builders Institute, the workforce development arm of NAHB. Since its inception, the Smith scholarship has awarded more than $95,000 to more than 60 exemplary students

Builders Get Behind Habitat for Humanity, Local Charities

Members of the Saline Home Builders Association in Benton, Ark. are among the many builders and associates across the country supporting Habitat for Humanity and local charities in their areas.

For a good many builders and associates across the country, charity and helping with community and neighborhood projects are as integral to building new homes as are permits, 2x4s and drywall.

Whether individually or through their local home builders associations, NAHB members are helping with Habitat for Humanity builds and supporting HomeAid, Boys & Girls Clubs, hospitals, schools and other local charitable causes through generous donations of money, materials and volunteer labor.

In order to learn more about the extent of local support builders and the federation are giving to Habitat and their communities, NAHB recently conducted a survey of the philanthropic work done through HBAs. Of the 850 state and local HBAs affiliated with NAHB, 48 responded to a request for details on charitable donations provided to their local Habitat affiliate.

Because less than 6% of the HBAs responded, the findings merely skim the surface of community service projects performed annually by NAHB members and affiliates. The following are some of the highlights:

“I can’t stress enough how HBAs should get involved with their local Habitat,” said Debbie Tidball, the former executive officer of the Saline Home Builders Association (SHBA) in Benton, Ark.

Tidball said SHBA members had a “blast” working with Habitat and were extremely pleased about doing something for the community — and working together. “Our members don’t usually get a chance to work with each other, and during a build you get that opportunity,” Tidball said. “When the project is finished, people always say, ‘I’ll be back next time.’”

The SHBA has participated in three home builds with Habitat and has plans to join in the Home Builders Blitz in June 2006, a national program that will pair Habitat affiliates with home builders to build 1,000 homes in one week.

To recognize the enormous philanthropic work of HBAs and members, NAHB and the National Housing Endowment, the philanthropic arm of NAHB, are sponsoring two awards programs that honor the generosity of the home building industry:

The National Housing Endowment Home Builders Care Project of the Year Award is open to home builder associations and councils affiliated with NAHB. The annual program recognizes an outstanding community service project developed and implemented by a local or state HBA or council affiliated with NAHB.

Complete award descriptions and entry forms for both competitions are available on the NAHB Web site at www.nahb.org.

Tucson Builders Donate Diapers and Anti-Graffiti Truck

Unhappy with a growing graffiti problem in its community, the Sales and Marketing Committee of the Southern Arizona Home Builders Association worked over the last couple of months on the donation of a clean-up truck worth about $12,000 to Tucson’s graffiti abatement program.

The committee also funneled its community outreach efforts to support the Southern Arizona Community Diaper Bank during the summer months, when contributions for the program fall off dramatically.

Council member K.R. Yarbrough Construction donated a Ford F250 truck to help the city eradicate graffiti. The vehicle was refurbished with contributions from Gaslight Print Shop and Southern Arizona Glassworks, and it was supplied with a 185-psi compressor by Borderland Construction.

The council collected more than 4,700 diapers to add to the diaper bank’s dwindling supply. The diapers are distributed to the elderly, disabled, babies and toddlers.

Nearly 2 million diapers were requested last year by social service agencies, churches and schools, Cheryl Smith, the director of the diaper bank, told the Tucson Citizen.

The diaper bank is especially valuable to the working poor, who find it difficult to afford the monthly $80-$100 cost of diapers, Smith said. Twenty percent of the bank’s diapers go to the elderly, many of whom live on fixed incomes.

The home builders council also collected more than $6,500, which is beling split between the two recipients.

Complete award descriptions and entry forms for both competitions are available on the NAHB Web site at www.nahb.org.

NAHB Fall Board Meeting in Reno Sept. 7-11

OFFICIAL MEETING NOTICE OF
THE NATIONAL ASSOCIATION OF HOME BUILDERS
BOARD OF DIRECTORS

The following schedule of events is a partial listing provided as a notice for the upcoming NAHB Fall Board of Directors Meeting, which will be held in Reno, Nev. on Sept. 7–11, 2005.

Meetings will be held at the Hilton Reno Resort and Casino. The fall board program will identify the exact time and place of each scheduled meeting.

Wednesday, September 7

Subcommittees, Task Forces, Working Groups Meetings
National Vice Presidents
State Representatives
Executive Board Meeting

Thursday, September 8

Committees, Subcommittees and Councils Meetings
Past Presidents' Council
National Housing Center Board of Governors
2006 Leadership Meeting (TBC)

Friday, September 9

Committees, Subcommittees and Councils Meetings
2006 Presidential Advisor Meeting
Budget & Finance Committee
Nominations Committee
National Housing Endowment
Resolutions Committee

Saturday, September 10

Area Caucuses 1-15
Joint Executive Board, Budget & Resolutions Committee Meeting
Board of Directors Meeting

Sunday, September 11, 2005

Board of Directors Meeting

Save on Dell™ Computer Products

Dell, the world's leading computer systems company, offers discounts to NAHB members on an array of products designed to meet the technology needs of your company. Discounts are available on:

Contact the Dell Association Sales Representative at 888-577-3355, Monday-Friday, 7 a.m.-8 p.m. (CT) and Saturday, 8 a.m.-5 p.m. (CT).

For the most up-to-date details on the Member Advantage discount program and all of the participating companies, go to www.nahb.org/ma.

Subscribe Your Employees to Nation’s Building News — and Earn a Chance to Win Digital Camera

Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB.

Help Tsunami Survivors Rebuild Their Homes

NAHB and the National Housing Endowment have established the Home Builders Care/National Housing Endowment-Tsunami Shelter Fund to raise desperately needed funds to build permanent shelter for the victims of the devastating earthquake and tsunami disaster in South Asia last year. The fund currently has raised more than $360,000.

NAHB has designated Habitat for Humanity® International and Shelter for Life International to be the recipients of the fund. Through NAHB donations, Habitat for Humanity will create a Disaster Response Technical Center in one of the affected countries it is serving. Shelter For Life will build a “Home Builders Care Village” of starter homes in Sri Lanka with NAHB funds.

Please help by making a tax deductible donation to the Home Builders Care/National Housing Endowment-Tsunami Shelter Fund.

Checks should be made payable to the National Housing Endowment and, in the memo section, please note the "Tsunami Shelter Fund."

The NAHB Senior Officers have selected Past President Bob Mitchell to oversee and guide this fundraising effort.

For more information, contact Troy Patterson at the National Housing Endowment at 800-368-5242 x8483 or Kym Kilbourne in NAHB Public Affairs, x8447.

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Subscribe Your Employees to Nation’s Building News — and Earn a Chance to Win Digital Camera

Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB.

Calendar of Events

Subscribe Your Employees to Nation’s Building News — and Earn a Chance to Win Digital Camera

Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB.

Nation's Building News Online: August 1, 2005

Senate Bill on GSE Reform Found Wanting

Subscribe Your Employees — You Could Win a Digital Camera

Apartment Rentals Home to Fewer School-Aged Children

Work-Site Thefts Rising

Alarms Fortify Secure Feeling

Hot Housing Market Opens Doors for Fraud

The Push to Turn Men Into Appliance Shoppers

People With Disabilities Face Discrimination in Up to Half of Rental Inquiries in Chicago

The Quest for Quiet

Speculators Seek Loopholes

L.A.’s Lofts Lure What Downtown Has Lacked: Residents

What Housing Bubble?

Bill Would Help Small Builders Provide Health Insurance

New Single-Family Sales Hit a Record Pace in June

Existing Home Sales Smash Record in June

Eye on the Economy

Builders’ Tip: Keeping Mud Off a House Under Construction

The New American Home Goes Caribbean, Targets Boomers

Technology for the Home Building Industry: An Overview

Turning Down the Heat of That Burning Question

Informal Living Trend Found by Architect Design Survey

Hot Weather Poses Hazards for Workers

Certified Graduate Designees of the Year Entries Sought

Education Calendar

Twenty Easy Steps for Creating Persuasive Direct Mail

Tour Provides Insights on Concrete Technologies

Almost 100 ICF Home Designs Available on New CD

Utah Builder to Tap Into Expanding Market in Mexico

Tucson Plumbing Trainer Named ‘Instructor of the Year’

Wood-Burning Stoves Focus of Clean Air Campaign

NAHB-Produced Shows on HGTV & DIY — This Week

Herman J. Smith Scholarship Award Winners Announced

Builders Get Behind Habitat for Humanity, Local Charities

Tucson Builders Donate Diapers and Anti-Graffiti Truck

NAHB Fall Board Meeting in Reno Sept. 7-11

Save on Dell™ Computer Products

Help Tsunami Survivors Rebuild Their Homes

Save More With BuilderBooks.com Rewards

Calendar of Events