NBN Online for the week of October 22, 2007

Small Dip Helping to Improve Health of Remodeling Market

Looking on the bright side, the current slump in remodeling activity will gradually lead back to a healthier market than existed at the height of the housing boom, when big spenders accounted for a disproportionate share of home owner improvements, Kermit Baker, senior research fellow at the Harvard Joint Center for Housing Studies and project director of its Remodeling Futures Program, said at last week’s Remodeling Show in Las Vegas.

In 2005, Baker said, 5% of the households remodeling their homes accounted for 60% of total market activity, which was “highly concentrated” and “not healthy over the longer term.” A revival of smaller-scale projects and a movement to greater household participation is “healthier for the industry, and more sustainable,” he said.

Following the downward path of the overall housing industry but not nearly as precipitously, remodeling should resume growth in 2009 coinciding with a turnaround in housing sales and starts. With market conditions back to normal, the annual increase in remodeling volume should be in the traditional 6% to 7% range through 2011, he said.

The remodeling industry will also receive a boost from household formations, fueled largely by strong immigration, Baker indicated, with the Joint Center projecting 2 million more formations in the current decade over the previous decade, which was a period of rapid population growth.

[MORE]

Lumber Prices Provided by Random Lengths

Builders See Further Headway on Mortgage Credit Crunch

Following adoption of policy at last month’s fall board meeting in Seattle calling for prompt action in Washington to ease the mortgage credit crunch, several NAHB-supported proposals are in the pipeline to increase liquidity for the nation’s mortgage markets, develop solutions to subprime and foreclosure problems and stabilize financial markets.

“Much has happened since our board set forth its marching orders,” NAHB President Brian Catalde said in an Oct. 16 memorandum to the association leadership. “The Federal Reserve Board has cut interest rates, Congress is moving several bills to help the housing market and ease the growing problem of home foreclosures, and federal regulators are providing Fannie Mae and Freddie Mac more flexibility to address the subprime crisis.

“Moreover, NAHB has updated and revamped its ‘Back to Basics Toolkit’ (nahb.org/toolkit) with a new Myth Buster section that debunks sensationalized and often false or misleading media reports about the nation’s housing finance system and housing market. It includes resources tailored for HBA leaders to help reassure the public and spur new home sales.” (To read more on myth busters elsewhere in this issue, click here.)

Debunk Falsehoods in the Media With NAHB ‘Myth Buster’ Info

In a concerted effort to boost consumer confidence and debunk sensationalized media reports about the nation’s housing finance system and housing market, NAHB has launched a new “Myth Buster” campaign to help its members present a more balanced and accurate picture on current and projected conditions in the housing market.

The campaign is aimed at correcting the record on falsehoods being presented in local and national media outlets, such as claims that there is no mortgage money available, foreclosures are skyrocketing and home values are in a free-fall with no bottom in sight.

The campaign information, available to home builders association leadership and NAHB members, includes facts and information that corrects the record and shows why now is a good time to shop for a new home.

The information is available in the Myth Busters section of the NAHB Web site — located at nahb.org/toolkit for use by NAHB members only.