Print-All Page: May 30, 2011

With some members of Congress actively pushing to abolish Fannie Mae and Freddie Mac and end the federal backstop for housing, NAHB on May 26 told Congress that maintaining an appropriate level of government support is absolutely essential for preserving the stability of the nation’s housing finance system.

Testifying before the Senate Banking Committee, NAHB First Vice Chairman Barry Rutenberg said that absent a federal role to help reassure mortgage market investors, the cost and availability of mortgage credit would be subject to unpredictable volatility.

"The historical record from the 1998 Russian crisis to the tragedy of Sept. 11 clearly shows that the private sector is not capable of providing a consistent and adequate supply of housing credit without a government backstop," said Rutenberg.

"As the private market transitions to assume a greater responsibility, there must be a predictable, permanent federal role in order to ensure a consistent supply of mortgage liquidity and to allow rapid and effective responses to market dislocations and crises," he said.

While NAHB strongly supports efforts to modernize the nation's housing finance system, it is critical that any reforms be well-conceived, orderly and phased in over time, he said.

NAHB opposes legislation pending in the House and Senate that would effectively wind down the operations of Fannie Mae and Freddie Mac without providing a clear vision for the future housing system and ensuring a non-disruptive transition to a new secondary market framework.

Similarly, NAHB believes that more than a dozen short-term legislative proposals offered by House Republican lawmakers to reduce the support Fannie Mae and Freddie Mac provide to the mortgage markets represent a piecemeal approach to reform that would disrupt the housing market and could push the nation back into a deep recession.

Recent bipartisan legislation (H.R. 1859) introduced by Reps. John Campbell (R-Calif.) and Gary Peters (D-Mich.) would replace Fannie Mae and Freddie Mac with five private companies that would issue mortgage-backed securities with government backing.

Legislation currently being developed by Rep. Gary Miller (R-Calif.) would also include a predictable government role in the secondary mortgage market to preserve its financial stability and maintain a stable housing sector.

"NAHB views the introduction of H.R. 1859 and Rep. Miller's draft legislative proposal as very positive developments as debate on the future of the housing finance system moves forward in Congress," said Rutenberg.

"Maintaining a continuing and appropriate level of government support is necessary to promote investor confidence and ensure liquidity and stability for homeownership and rental housing," he said.

Without a federal backstop for housing, Rutenberg warned, the 30-year, fixed-rate mortgage -— the major housing finance tool for most Americans — would become increasingly scarce and much more costly, pricing many creditworthy borrowers out of the marketplace.

Similarly, the availability of financing for multifamily housing would fall woefully short of the growing amount that is needed.

Also of great concern to NAHB are proposals unveiled in late March by six federal agencies that would establish a "Qualified Residential Mortgage" (QRM) standard featuring a minimum 20% downpayment.

This downpayment requirement would keep homeownership out of reach for most first-time home buyers and middle-class households.

About 62% of existing residential first mortgages would not have qualified under the proposed QRM standard because they had downpayments of less than 20%, according to LPS Applied Analytics, a mortgage data firm.

NAHB estimates that it would take 12 years for a typical family to save enough money for a 20% downpayment on a median-priced single-family home and other research has found it would take even longer.

"If buyers are denied access to affordable housing credit, the shadow inventory of foreclosed homes will not be drawn down, a housing recovery will not take hold and economic growth will stall," said Rutenberg.

Moreover, low-downpayment home loans have been originated safely for decades and are not what drove the housing lending crisis, added Rutenberg.

"Subprime, no-doc and other alternative mortgage products crashed our economy," he said.

"We believe the Administration and regulators must acknowledge this fact and offer a new plan that ensures a safe and healthy mortgage market and keeps homeownership affordable for working American families."

For more information, email Scott Meyer at NAHB, or call him at 800-368-5242 x8144.

Floor Plans: Modular Interpretation Brings Colonial-Era Farmhouse Into 21st Century

In historic Concord, Mass., not too far from where a handful of Minutemen loaded their muskets and fired upon 700 advancing British Army regulars during the opening salvo of the Revolutionary War, there stands a modern interpretation of a colonial-era home styled after a New England farmhouse.

The four-bedroom, 3,800-square-foot modular home — manufactured by Preferred Building Systems and built by Sterling Homes Development Corp. — features a farmer’s front porch with painted balusters, a mudroom, crown molding, chair rails and hand-built cabinets — much like its 18th century predecessors. But that’s where the similarities end.

There’s an attached two-car garage — with two mahogany, barn door-style garage doors — cement board pre-painted clapboard siding to endure harsh New England winters, random-length bamboo flooring, energy-efficient appliances, an on-demand water heater, a central vacuum system and all the modern advantages of modular construction, including a tight, energy-efficient building envelope, a shorter on-site construction time and reduced on-site waste.

Although the owners chose to build their home in a style that would blend with its historic surroundings, they specified an open floor plan, with divided living spaces, that will meet their family's needs in the years ahead.

The kitchen, dining room and family room flow together and provide ample room for formal and informal entertaining. The kitchen features an island with seating for three, a floor-to-ceiling custom pantry, a desk, hand-built maple cabinets, stainless steel appliances and a “subway”-style tiled backsplash.

Completing the first floor is a formal entry with a custom staircase, a study set off from the main entertainment area and, in the rear, a mudroom with stone tiling, custom bench seating, cubby holes and pegs to hang coats.

The master bedroom suite, three additional bedrooms, an additional full bath and the laundry area are on the second floor. The master suite features a dressing area, large walk-in closet with custom cherry cabinets and a spacious shower with a custom glass shower door enclosure.

The home also boasts a bonus room and full bath over the garage that can be accessed from the mudroom. The family uses it as a media area and to play ping-pong, a game that originated in England more than a century after the Revolution.

Construction on the home began in late July 2009 and was completed in less than four months, avoiding much of the winter. An occupancy permit was granted in November 2009.

Features and Specifications

Building Team

Manufacturer — Preferred Building Systems, Claremont, N.H.
Builder — Sterling Homes Development Corp., Burlington, Mass.

General

3,800-square-foot, New England-style farmhouse single-family home
Four bedrooms
Three full baths, one half-bath
Two-car garage with custom mahogany garage doors
Farmer’s front porch with painted mahogany balusters
Cement board pre-painted custom color clapboards

Interior

Random-length bamboo flooring throughout entire house with the exception of bathrooms
High-efficiency furnaces
Heat recovery system
On-demand water heater
Central vacuum system

Foyer

Custom front stairway with box newel posts, square balusters and oak treads

Kitchen

Maple custom-made kitchen cabinets
Stainless steel appliances
“Subway”-style tiling for kitchen backsplash
“Caesar Stone” countertops

Living room

Custom stone fireplace surround

Owner's Suite

Cherry closets
Stone tiling in master bath
Custom glass shower enclosure

Mudroom

Stone tiling
Custom bench seating with bead board backing, cubby holes, pegs to hang

An Open Mind and Industry Support Keep Five Builders Very Much Alive

Participating in a May 18 discussion panel during NAHB’s spring board meeting in Washington, D.C., five builders described how they have succeeded against difficult odds in keeping their businesses going and positioning them for the new markets slowly emerging from the rubble of one of the most challenging housing downturns imaginable.

Reminiscing about what it was like 20 years ago when his new custom home building business was struggling to get off the ground, Dean Mon, president and CEO of D R Mon Group of Shrewsbury, N.J., said, “I remember not even having enough money to buy a can of soup.”

Networking — and joining his local home builders association — was his salvation. “You need to get out of your house and go network with the other builders,” he said.

Newcomers to the industry will find that home builders are generous with their time and advice, Mon said. “Buy them a cup of coffee, buy them lunch and they’ll tell you anything.”

Looking at the alternatives, Mon decided to turn his focus to affordable home building, convinced that it would put his business on higher ground with the availability of state and local funding for infill development projects and workforce housing.

In addition, it’s important to have an open and honest relationship with a local bank, he said. “Do your homework and find one,” visit it frequently and look at it as a true partner, he said.

When a visitor looks for Phil Kean Designs on an Internet search engine, the first word that comes up is “award-winning.”

By participating in home shows, speaking opportunities and awards programs, Kean is constantly generating publicity for his Winter Park, Fla., design/build company — and that name recognition has steadily led to more clients. “Our last year was our best year yet,” he said.

Kean has eight employees, including a full-time marketing director. “I believe in marketing,” he said, especially when times are tough, something that not all of his competitors understand.

Kean knows his market, targeting a small circle of very affluent households in Central Florida, and he knows how to reach them. “If you don’t have a marketing strategy, it’s your biggest hurdle.” Even the best built homes won’t bring in more business “if no one knows who you are,” he said.

Kean said he budgets generously for professional photography, entry fees for design awards and parade of homes entries “so we win.”

His public exposure is further enhanced by speaking at local events, sending out press releases to newspapers and sponsoring charitable causes in the community.

Kean has learned a lot by participating in an NAHB 20 Club and being active in the HBA of Metro Orlando — where he networks, networks, networks.

An optimistic outlook is also helpful “when people come in and want me to design their dream,” he said. And to stay in a productive frame of mind it doesn’t hurt to tune out some of the bad news so abundant over the airwaves these days.

Kean is also a green builder, certifying homes under established green rating programs when the client wants it, and spending $250 to $300 per square foot on energy-efficient, sustainable and high-end products and finishes.

Aware that many potential home buyers are overwhelmed by the home buying process and are in no position to shop for a new home until they learn how to create an effective household budget and secure financing, Ivar Pietri, chairman of Peregrine Development Co. in San Juan, Puerto Rico, decided to teach them.

For his blackboard, Pietri, working with his HBA and an experienced promoter, created a new home fair, La Feria de tu Nuevo Hogar, a “reinvigorating” weekend event that attracted 35,000 attendees and 2,500 mortgage applications and led to 137 home sales.

The fair featured booths at which banks, product suppliers and home building companies provided the education and found solutions that put people on the path to owning a new home.

The event also publicized government tax exemptions and other incentives designed to encourage homeownership that “had not generated a lot of interest,” Pietri said, perhaps because not enough people were aware of them or understood how they worked.

“There is a pent-up demand out there,” Pietri said, but “people need to be convinced that now is the time to buy and that prices aren’t getting any lower.”

Mick Galatio’s company, Desert Wind Homes, is thriving in Las Vegas, arguably the worst housing market in the country, and the secret, he said, is playing to your strengths, knowing what you can’t do and dealing honestly.

“I consider myself a sticks and bricks guy,” he said. “I hire other people to take care of the administration and the accounting,” while working personally to maintain strong business relationships with Realtors® and bankers.

After the housing bubble burst, Galatio found himself in 2008 working in nine subdivisions financed by five different banks — and holding $52 million in debt.

The excellent long-term relationship he had cultivated with his creditors paid off in helping the company restructure its debt. “It got us a lot more mileage,” he said.

Once back on its feet, his company turned to general construction and an assortment of odd jobs to maintain cash flow until it could retool to meet changing market demand, which today has brought him into the profitable business of rehabbing foreclosed properties.

“We rehab these homes with new drywall, bathrooms and kitchens,” and sell two or three per month to value-conscious buyers, netting about 12% profit on each sale.

“When your buyers come in, you’ve got to cater to them, follow up with what they want and give them a good deal,” he said.

Meanwhile, Desert Wind Homes is seeking to purchase finished lots it eventually wants to build on. “We’re looking forward to the industry coming back,” Galatio said, adding that “the banks have changed a lot and are starting to work with us more.”

Before the downturn, award-winning green builder Don Ferrier of Ferrier Custom Homes in Fort Worth, Texas, pretty much had his market sewn up, catering to baby boomers with good incomes looking for a highly energy-efficient “last home” with low operating costs.

“We always had a niche,” Ferrier said. He built his reputation and brought in new clients by winning the Energy Value Housing Award and the National Green Building Award. Ferrier himself was named Green Builder Advocate of the Year in 2008 at the NAHB National Green Building Conference & Expo.

“As we won these awards, and newspapers and magazines wanted articles on green, “they called us,” he said.

Today, with more baby boomers sitting on the sidelines before making their next move, Ferrier is focusing on a new niche: the mid-30s buyer whose more modest income is outweighed by an altruistic commitment to help the environment along with a consumer’s desire to cut energy costs.

Ferrier talks with his clients early and often about budgets to ensure they are planning realistically and to avoid surprises.

To stay competitive, he trimmed back his profit margins to about 20%, down from 22% when housing was in its heyday, but 2011 is on track to be “an above-average year” for the family-owned company, he said.

Moderating the panel, NAHB Chairman Bob Nielsen noted that networking, education and participating in HBA and NAHB events and conferences are keys to success in the new evolving environment for housing.

“No one said it was going to be easy,” Nielsen said. “This is a new business, these are new concepts and you have to keep your mind open to make money.”

Glass Products React to Heat and Light, Provide New Designs and Textures

These days, glass is more than just melted sand. Not only have manufacturers figured out how to make it beautiful with patterns and textures, they’ve also managed to make it filter out UV rays while letting light in.

They’ve even produced glass that can darken and brighten at the touch of a button, or in response to light and heat levels.

There are undoubtedly more innovative surprises in store going forward, but here are some of the newest from members of NAHB’s Leading Suppliers Council.

Electrochromic glass can transition from a clear state to a tinted state. This feature lets daylight pour into a space — minimizing the need for interior light — or keeps the hot sun out and the A/C from cycling on.

SageGlass — now produced in cooperation with its former competitor, Saint-Gobain — can be controlled by someone’s finger on a button, or can be programmed to respond automatically to changing sunlight and heat conditions.

According to the manufacturer, the product provides dramatic energy savings and enhances the comfort of those using the space.

SageGlass cites the Department of Energy’s Lawrence Berkeley National Laboratory’s estimate that the product’s technology could “reduce building heating and air conditioning equipment size by up to 25%,” and “reduce overall cooling loads for commercial buildings up to 20% and lighting costs by up to 60%.”

The company also supplies electrochromic glass to residential window manufacturers Marvin and Weather-Tek.

The new Avonlea glass design from ThermaTru Doors presents a flowing vine theme in both bronze water glass and clear glass, with black nickel caming.

It was designed to complement many popular home styles, and to occupy an affordable price point.

The new glass is Energy Star-qualified and comes in full-lite, 3/4-lite, 1/2-lite, oval and center-arch lite, with optional side lites and transoms.

It is available in the company’s Fiber-Classic, Smooth-Star, Profiles and Traditions lines.

Celebrities love tinted windows. But if your customers don’t — but still want lower levels of heat and UV rays in their homes — they may want to look at Andersen Windows’ new Low-E4 SmartSun window glass.

According to the manufacturer, the SmartSun glass blocks 95% of UV radiation — so furnishings won’t fade.

Its solar heat gain is only .28, a level comparable to the company’s tinted Low-E4 glass, but it allows 65% of the daylight in, compared to 40% for the tinted version.

The new glass balances comfort with higher visibility, and is available in all of Andersen’s 400-series windows.

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.

With Business Way Down, Local Home Builders Trying to Hold On

With home-construction permits in Connecticut hitting an eight-year low in April, local builders say they are scrambling for work as never before. “You just have to change with the times and do something a little bit different,” said Chad Whitcomb, president of the Builders Association of Eastern Connecticut. Whitcomb, who as president of Greensulators now spends more time doing energy-conservation work than building, said people are much more leery about making a commitment to a major project than they were a few years ago. And when they do express serious interest in proceeding, he said, many are looking for a bargain. “But our costs haven’t come down,” Whitcomb said. “The only thing we can do is cut our profits. There’s a misnomer that you can get a house for half off.” He added that the industry as a whole may be suffering, but individual companies like Greensulators — which doubled its business last year — can still find a niche and prosper. Still, custom builders who rode the highs of the real estate market a few years ago are itching to get back to what they do best. Many have been forced to take virtually any kind of work — painting, roofing, siding, gutters, maintenance — just to stay in business. “As long as we’re down, the economy is not going to come back,” said Renee Main, executive officer of the local builders association. (www.theday.com)
New London Day (5/31/11); Lee Howard

Cities See Rise in Rental Homes; Owner-to-Tenant Shift May Last Awhile

More than 500 midsize and large cities have seen a rise in the share of homes that are rented rather than owned, according to a USA Today analysis of Census data. Almost 4 million homes have been lost to foreclosures in the past five years, turning many former owner-occupied homes into rentals. Of the 100 largest cities, some of those with the largest shifts were Irvine, Calif., which went from about 40% of occupied homes rented in 2000 to 49.8% in 2010; Philadelphia increased from 40.7% to 45.9%; and Birmingham, Ala., rose from 46.3% to 50.7%. Twenty-five cities — including Baltimore, Minneapolis, Sacramento, Calif., and Salt Lake City — swung from having more than half home owners in 2000 to majorities of renters in 2010. Florida, California and Arizona had the most cities where the share of renter-occupied housing grew by at least five percentage points. All three states have been hard hit by foreclosures. Nationwide, 34.9% of occupied homes were rented in 2010, up from 33.8% in 2000. (www.usatoday.com)
USA Today (5/31/11); Julie Schmit and Barbara Hansen

Winners of the Rental Economy

A new class of renters is expected to bring a bright spot to the troubled U.S. real estate market. Prices for rental apartments are expected to rise nationally — by approximately 4.5% in 2011 and up to another 3% in 2012, according to Rent.com. Charles Brindell, chairman of NAHB’s Multifamily Leadership Board, says he expects apartment construction to pick up to at least 160,000 units this year, mostly in urban areas along the East Coast. This would be significantly higher, given that construction since 2009 has totaled less than 90,000 a year — the lowest in 50 years. Brindell, also CEO of a Texas-based firm that invests and develops apartment communities, says he’s bullish because of the improving job prospects for younger workers. More than 60% of jobs created in 2010 went to workers between 20 to 24 years old — the prime age group for renters. Brindell’s Mill Creek Residential Trust is planning to build 3,000 apartment units this year, mostly in the Northeast, including the Boston area, Long Island, N.Y., and Virginia. (http://money.cnn.com/magazines/fortune/)
Fortune Online (5/25/11); Nin-Hai Tseng

Valley Foreclosure Sales Have a Wall Street Feel

A record number of foreclosure houses in the Phoenix area were sold in April at daily events known as trustee-sale auctions. The number of sales has been growing for months and the record pace is expected to continue through next year. A decade ago, foreclosures were so rare that only a handful of bidders regularly showed up at the trustee-sale auctions. Then after the housing crash, foreclosures and trustee-sale auctions soared, but the public auctions remained dominated by a few insiders. They huddled around auctioneers speaking in whispers. Outsiders found it hard to break into the process. Then the growing number of foreclosures drew more bargain hunters. The increased number of bidders and firms has added competitiveness and more transparency to the auction system. Several firms bid for multiple prospective buyers, so a bidder outside the courthouse may be an agent using a cellular phone and a laptop to communicate with clients from around the world. Newcomers aren’t shunned. Instead, they are looked at as potential clients for the more than half-dozen bidding services that have representatives at the auctions every day. The increased competition for foreclosure homes is pushing up prices, which may bode well for the housing market at large. (www.azcentral.com)
Arizona Republic (5/22/11); Catherine Reagor

What’s In and Out in San Diego Home Remodeling

More home owners in San Diego County and throughout the U.S. want small makeovers instead of the mega-upgrades of the boom times in 2005-06. They are paying with cash instead of tapping into once-lush home equity lines and plan to stay put for a while in the face of fallen home values. The purpose of remodeling also has changed. In the past, people mainly made alterations and additions to increase home values. Now they’re done more out of necessity: from upgrading to “green” appliances to save on energy costs to adding shower grab bars to make the bath more accessible as home owners age. “If your mortgage is underwater, you can’t borrow,” said Kermit Baker, chief economist for the American Institute of Architects. “That’s a psychological barrier,” he said. “Even if you do have the cash for it, you’ve really scaled back on the work.” For those who are remodeling, three themes have emerged. Home owners are exploring smaller and cheaper improvements, adding “green” upgrades and changing interiors to age in place. (www.signonsandiego.com)
San Diego Union Tribune (5/25/22); Lily Leung

Media Hit on Housing Programs Is Off Target

A recent Washington Post article highlights how easy it is to taint an entire portfolio of federal programs by highlighting problems at one. The paper began a series on May 15 on problems in HUD’s HOME program. The article details examples of poor decision-making and a lack of accountability at what it describes as “the federal government’s largest housing construction program for the poor.” A major problem, of course, is that the article has nothing to do with the nation’s public housing program, and there is no effort to distinguish HOME from the plethora of available HUD programs. To be clear, HOME provides block grants to local municipalities, who in turn work with non-profits and private developers to develop affordable housing. (As HUD points out, the article also does not paint a fair picture of the program.) The article implies that public housing is rife with the same kinds of problems, that money is being wasted and that people with unmet housing needs are being ignored. That is simply not the case. Public housing is a multibillion dollar asset that is home to 2.2 million working families, seniors and people with disabilities. Not only is money not being wasted, it is producing an excellent return on investment. A recent report found that using $4 billion of Recovery Act funds invested in public housing capital projects, housing authorities renovated and developed nearly 380,000 sorely needed affordable housing units. Operating costs — particularly for utilities — will be lower in the future. That means a better use of tax dollars and less strain on scarce resources. (www.huffingtonpost.com)
Huffington Post (5/17/11); Sunia Zaterman

Impeding Flow of FHA Finance Would Be a Setback for Home Buyers, NAHB Testifies

At a time when overly restrictive underwriting requirements are giving qualified home buyers a hard time in obtaining mortgages, the federal government needs to ensure that a reliable and adequate flow of housing credit is available through the Federal Housing Administration (FHA), NAHB First Vice Chairman Barry Rutenberg told a congressional panel on May 25.

"If we look to the dramatic increase of FHA's market share over the past few years, we can see how essential the program is for enabling housing and the nation’s economy to advance further down the road to recovery,” Rutenberg, a home builder from Gainesville, Fla., told the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity.

In 2006, when there was an abundant supply of mortgage finance from private lenders, FHA's market share was at an all-time low of 2%.

During the past two years, with private mortgage lenders growing increasingly more restrictive in reaction to a weak economy, the FHA insured nearly 30% of the single-family mortgage market.

"This striking shift is evidence that the FHA is performing its mission of providing the federal backstop to ensure that every qualified American home buyer has access to a stable mortgage product," said Rutenberg.

As Congress looks for ways to reform the FHA, he urged lawmakers to proceed carefully in order to avoid consequences that could harm home borrowers.

For example, NAHB is concerned that increasing the FHA’s downpayment requirement from 3.5% to 5% — as called for in a draft legislative proposal — would impose a substantial burden upon American home buyers, particularly younger and other credit-worthy buyers lacking cash to pay the higher upfront cost.

"Research has shown that requiring a higher downpayment does little to reduce the risk of default but causes home buyers to use more of their reserves for the downpayment," said Rutenberg.

"Sound underwriting is the key to minimizing foreclosures and defaults, not higher downpayments,” he said. “This is demonstrated by current FHA foreclosure reports on loans made to borrowers with sound credit profiles, which have significantly improved."

Absent congressional action, the current limits for FHA-insured loans and Fannie Mae and Freddie Mac mortgages are scheduled to be reduced on Oct. 1.

Meanwhile, the same legislative blueprint that would increase FHA downpayment requirements would impose additional reductions in loan limits for a significant number of areas throughout the country, a development that Rutenberg warned could leave a large number of first-time home buyers without a key source of mortgage financing.

"Counties across the country would see their loan limit reduced by tens of thousands of dollars, placing further downward pressure on home prices and impairing the ability of borrowers to use FHA-insured mortgages to purchase new homes," said Rutenberg.

To keep FHA, Fannie Mae and Freddie Mac loan limits at their current levels, NAHB called on Congress to support H.R. 1754, the Preserving Equal Access to Mortgage Finance Programs Act, a bipartisan measure sponsored by Reps. Gary Miller (R-Calif.) and Brad Sherman (D-Calif.).

Meanwhile, the draft legislative proposal, which has not yet been formally introduced, would remove the limit on the annual mortgage insurance premiums on single-family home loans, even though the agency has already implemented a three-step increase in premiums and the strong performance of recent loans made under revised underwriting criteria makes a compelling case that even higher premiums are not warranted.

"FHA's capital resources are stabilizing and recovering. Allowing further, unlimited increases in the insurance premiums now would put unnecessary additional financial strains on potential home buyers," said Rutenberg.

NAHB opposes this proposal because the RHS programs are uniquely structured to address the housing credit needs of low- and moderate-income persons in rural areas, which are very different from those found in urban and suburban areas.

"If the RHS single-family and multifamily programs were consolidated into existing HUD programs, it would make it more expensive for persons living in rural areas to obtain an affordable mortgage to purchase a home and more difficult to finance small properties in rural areas because HUD does not have a program that meets this need effectively," said Rutenberg.

"As Congress looks to improve the FHA and RHS, these programs cannot be separated from the larger discussion of reforming the complex housing finance system, including future reforms to Fannie Mae and Freddie Mac," he added.

To read H.R. 1754, click here and enter the bill number in the box at the center of the page.

For more information, email Scott Meyer at NAHB, or call him at 800-368-5242 x8144.

New-Home Sales Rise 7.3% in April as Inventory Dwindles

Sales of newly built, single-family homes rose 7.3% to a seasonally adjusted annual rate of 323,000 units in April, their best pace since December of 2010, according to figures released by the U.S. Commerce Department on May 24.

The report also showed that the nationwide inventory of new homes for sale continued to fall, reaching just 175,000 units in April, which was a new record low, representing a 6.5-month supply at the current sales rate.

"The fact that new-home sales have now risen for two consecutive months is certainly welcome news following an all-time low sales number in February," said NAHB Chairman Bob Nielsen.

“But builders are still contending with a great deal of competition from foreclosed properties for sale in certain markets, and in places where this is not an issue, it remains extremely difficult to obtain credit to build new homes," Nielsen said.

"While more buyers are starting to show up at builder sales offices this season, the level of actual buying activity remains quite low," noted NAHB Chief Economist David Crowe.

"The razor-thin inventory of new homes for sale is indicative of the caution that builders are exercising with regard to new projects as well as their inability to obtain financing for new-home production," he said.

Sales were up 7.7% in the Northeast, 4.9% in the Midwest, 4.3% in the South and 15.1% in the West.

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Housing Starts Fall 10.6% in April as Consumers Remain Reticent

Nationwide housing starts fell 10.6% in April to a seasonally adjusted annual rate of 523,000 units, according to figures from the U.S. Commerce Department released on May 17.

"While mortgage rates are low and house prices are as affordable as they've been in a generation, the decline in April's housing starts is indicative of the low level of confidence that consumers have in the housing market," said NAHB Chairman Bob Nielsen.

"Consumers have not yet reached a level of confidence that is strong enough to begin lifting the housing market," said NAHB Chief Economist David Crowe.

"The fundamentals — such as economic growth and employment — are beginning to shape up and will eventually provide enough momentum to push housing forward at a healthy pace,” Crowe said.

“But until then, builders are unwilling to move forward,” he said. “The issuance of housing permits, an indication of future housing activity, has remained at about the same level as the first quarter of the year."

Single-family starts declined 5.1% to a seasonally adjusted annual rate of 394,000 units in April.

Multifamily starts — which tend to display greater volatility on a month-to-month basis — fell 24.1% to a rate of 129,000 units after jumping 30.8% the month before.

Regionally, starts declined 4.8% in the Northeast and 23.0% in the South but increased 15.7% in the Midwest and 3.7% in the West.

Total permit issuance for new homes in April dropped 4.0% to 551,000 units. Single-family permits dropped 1.8% to 385,000 units and multifamily permits declined 8.8% to 166,000 units.

Regionally, permit issuance was unchanged in the Northeast and declined 5.3% in the Midwest, 5.7% in the South and 0.8% in the West.

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Housing Affordability at Record Level, But Tight Financing Constrains Sales

Nationwide housing affordability during the first quarter of 2011 rose to its highest level ever on the NAHB/Wells Fargo Housing Opportunity Index (HOI), which goes back more than 20 years.

The HOI indicated that 74.6% of all new and existing homes sold in this year’s first quarter were affordable to families earning the national median income of $64,400.

This eclipsed the previous high of 73.9% set during the fourth quarter of 2010 and marked the ninth consecutive quarter that the index was above 70%. Before 2009, the HOI rarely topped 65% and never reached 70%.

"With interest rates remaining at historically low levels, the first-quarter report indicates that homeownership is within reach of more households than it has been for more than two decades," said NAHB Chairman Bob Nielsen.

"While this is good news for consumers,” he said, “home buyers and builders continue to confront extremely tight credit conditions, and this remains a significant obstacle to many potential home sales."

In Syracuse, N.Y., which was the most affordable major housing market in the country during the first quarter, 94.5% of all homes sold were affordable to households earning the area's median family income of $64,300.

Among the top-five most affordable major metro housing markets, Syracuse was followed by: Youngstown-Warren-Boardman, Ohio-Pa.; Indianapolis-Carmel, Ind.; Warren-Troy-Farmington Hills, Mich.; and Toledo, Ohio.

Among smaller housing markets, the most affordable was Kokomo, Ind., where 98.6% of the homes sold during the first quarter were affordable to families earning a median income of $61,400.

That was followed by: Monroe, Mich.; Cumberland, Md.-W.Va.; Elkhart-Goshen, Ind.; and Springfield, Ohio.

In New York-White Plains-Wayne, N.Y.-N.J., which was the nation’s least affordable major housing market during the first quarter, 24.1% of all homes sold were affordable to those earning the area's median income of $65,600.

This was the 12th consecutive quarter in which the New York metropolitan area had the least affordable housing.

Following New York were: San Francisco-San Mateo-Redwood City, Calif.; Los Angeles-Long Beach-Glendale, Calif.; Honolulu; and Santa Ana-Anaheim-Irvine, Calif.

San Luis Obispo-Paso Robles, Calif., where 47.6% of the homes sold were affordable to families earning the median income of $72,500, was the least affordable of the smaller metro housing markets in the country during the first quarter.

It was followed by: Santa Cruz-Watsonville, Calif.; Laredo, Texas; Ocean City, N.J; and Santa Barbara-Santa Maria-Goleta, Calif.

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Analysts Advocate Less Federal Support for Housing, More to Overhaul U.S. Economy

Providing an unsavory taste of what builders are up against in the ongoing debate over restoring the nation’s housing finance system, panelists appearing before the NAHB board at its May 20 meeting in Washington, D.C., argued over the role the government should play in the period ahead.

Two of the three speakers indicated it’s time for less federal support for housing, while the third spoke on behalf of doing more for the first-time home buyer and deplored recent policies that could set the bar considerably higher for mortgage borrowers.

Michael Calhoun, president of the Center for Responsible Lending, described his organization as an “unabashed supporter of homeownership,” an affiliate of the community development lender, Self Help, and the provider of $5 billion in financing over the last decade to first-time home buyers.

The high foreclosures distressing today’s marketplace are not the result of “too much homeownership,” said Calhoun, but stem from “housing finance that was done wrong.”

Government policies, he said, should be aiming at preserving “wide access for qualified borrowers to get financing to buy homes,” and that won’t be accomplished by establishing 20% downpayments as the standard for obtaining the most favorably priced mortgages.

Calhoun advocated instead applying “common-sense provisions” to loan originations to ensure that the borrower has the ability to make the loan payments, including any increases in later phases of the mortgage.

While changes in regulatory oversight for Fannie Mae and Freddie Mac or whatever replaces them is in order, he suggested, a government guarantee for securities is indispensable.

Borrowers face “an increase of 100 to 150 basis points in the cost of a mortgage if we do away with the guarantee,” Calhoun predicted, along with “the death of the 30-year mortgage.”

Home buyers save $50 billion each year as the result of the availability of lower mortgage rates, he added.

Calabria

Mark Calabria, director of financial regulation studies at the Cato Institute, disagreed that the availability of financing for home buyers will suffer by moving to a system that ensures borrowers have more equity in their homes and less leverage.

The 30-year, fixed-rate mortgage “won’t go away,” Calabria said, but the consensus among financial experts is that U.S. home owners — who typically live for 10 years in a home before relocating to another one and who refinance their mortgages around every five years — would be better off if the system “moved back to more short-termed financing.”

The government should not be subsidizing debt, he said, which is what it was doing in the bubble years of 2003 to 2005 with interest rates that were less than the rate of inflation, and that was “a recipe for disaster.”

Housing policies should encourage more home equity, Calabria said, because “people need a cushion.”

In 1980, when the national homeownership rate was a healthy 64.4%, he said, home owners’ equity averaged about 70% of the value of their homes, compared to only 40% today, and Fannie and Freddie played a significantly smaller role in the marketplace. In fact, they played no role in the 1950s and 1960s, “yet 30-year loans were available.”

Calabria described today’s housing finance system as “a house of cards” and said that he is “underwhelmed” by what it delivered. “We need to reevaluate what we’re getting out of housing,” he said.

Katz

For Bruce Katz, vice president and director of the Metropolitan Policy Program at the Brookings Institution, it is evident that the economy is not getting what it needs from housing to excel in a fiercely competitive global marketplace that is leaving the U.S. behind.

“Housing doesn’t drive the economy,” Katz said, “the economy drives housing,” and that is why the industry would be far better off if federal policy encouraged a shift to manufacturing and exports, particularly innovative low-carbon technologies, which would provide a catalyst for growth, productivity and jobs.

The U.S. was in the vanguard of information technology, he said, but it’s “falling behind on green tech” to such rival nations as China and Germany.

The U.S. needs a green investment bank to support a broad public-private partnership to rebuild the infrastructure and serve markets abroad, Katz said, and in today’s fiscally constrained environment that will entail creating tax policies supporting “the productive sector, things that will have a high return.”

To that end, Katz said he would limit the mortgage interest deduction to its current level of about $90 billion in fiscal 2011.

Assuming that the deduction will cost the government $143 billion by 2016, “we will save $165 billion over the next five or six years if we cap it at its present level,” he said.

Canada, Katz pointed out, has managed to attain a homeownership rate of 68% without a mortgage interest tax deduction, yet its exports account for 35% of its gross domestic product compared to only 13% in the U.S.

Eye on the Economy: Housing Market Continues to Disappoint

The housing market continued to disappoint in April, with a marked decline in housing starts and some slippage in existing home sales. Housing starts have been bouncing along the bottom since June of 2010.

Builders cite the lack of credit for buyers and builders as the primary hurdle in the market. Federal Deposit Insurance Corporation data supports the builder credit shortage — showing single-family acquisition, development and construction (AD&C) lending down 73% over the past three years compared to a 45% drop in all commercial real estate lending.

Weak housing demand, along with a high volume of foreclosures and distressed sales, continues to have an adverse impact on house prices, with the Federal Housing Finance Agency house price index down 2.5% in first quarter of 2011 and 5.5% year-over-year. The monthly data provide some hope that the downward pressure on house prices is easing, with the overall rate of decline slowing and prices ticking up in four of the nine Census divisions in March. In addition, foreclosures and seriously delinquent homes are beginning to trend down, reducing the downward pressure on house prices.

At the same time home buyers are bargaining for lower prices, builders are facing increasing costs. The producer price and consumer price indexes have been rising steadily since the beginning of the year, pushed up by surging energy and commodity price increases. It appears, however, that oil prices have peaked, suggesting prices will settle back to a more moderate pace in the second half of the year.

The outlook is better for the multifamily sector, with most indicators suggesting that rental markets will be the first to benefit from pent-up housing demand. The NAHB 55+ Housing Market Index showed builder confidence improving for apartment production and demand in the 55+ housing market.

The improving economy should soon bring some relief to depressed levels of housing activity — with more solid employment prospects boosting consumer confidence. Recent data indicate that job creation is slowly gathering momentum, with job openings rising to their highest level since late-2008 and lay-offs declining.

Eye on the Economy is a bi-weekly digest of the latest economic and housing policy news, analysis and studies as posted on NAHB’s free Eye on Housing blog. The preceding is a reissue of his May 31 edition. To subscribe to Eye on the Economy, click here.

They can also subscribe to the blog’s free RSS feed, which will automatically alert them to every new posting.

Useful Links to Monitor Economic and Housing Trends

The following are links to useful information from government agencies and NAHB that will enable you to monitor the housing market.

They can also subscribe to the blog’s free RSS feed, which will automatically alert them to every new posting.

Builders’ Tip: How to Fabricate the Simplest Trim Rack Ever

I was working on a penthouse in San Francisco when the trim crew, which had to apply an oil finish to all the mahogany siding and trim for the project, asked me to build them a trim rack.

They had about 2,000 linear feet of trim to finish onsite before installing it and they wanted a rack that would help them reduce their handling the material as it dried.

The rack works great for priming exterior or interior trim, and it doesn’t take up much space.

Presented in a virtual format as part of the NAHB BuilderBooks effort to go green and streamline delivery, the catalog includes publications and products to help building industry professionals ramp up for a successful year as the industry and the economy begin to recover.

The materials in the catalog, written by industry leaders in various fields of residential construction, feature publications and products about accounting, estimating, business management, green building, sales and marketing, safety, construction codes, 50+ housing, multifamily housing, construction management remodeling and more.

Membership Day Recruits More than 3,600 New NAHB Members

As NAHB Senior Officers and Membership Committee volunteers cheered them on via a telephone hookup at the National Housing Center in Washington, D.C., 400 participating home builders associations welcomed more than 3,600 new builders, remodelers and suppliers recruited on National Membership Day on May 24.

Among the success stories: All 65 local HBAs in North Carolina participated in Membership Day events, adding 366 members to the state’s roster.

This year’s largest recruitment class came from Texas, which added 627 members.

“This day is very important to our industry,” said Membership Committee Second Vice Chair John Sizemore, a risk management specialist for 2-10 Home Buyers Warranty of Lexington, Ky., who joined other committee members and NAHB employees to work the phones and tally the numbers as the day progressed.

More members mean more opportunity for home builders and product manufacturers, he said.

NAHB Immediate Past Chairman Bob Jones

“If it weren’t for the work that our local HBAs do” — including advocacy efforts to keep expensive and unnecessary regulations from hobbling the industry — “all this legislation would drive us out of business, and that business is to provide our customers with a home. That’s the American dream.”

As each HBA reported in new membership totals, cheers and applause rose up from the gathered volunteers, who were seated at tables bedecked with playing cards, poker chips and other props representing this year’s membership drive theme, “The Winning Hand.”

Many HBAs are taking advantage of the poker-themed promotions to drive membership recruitment year-round, said Gabrielle Alahouzos, NAHB’s director of membership marketing. This makes recruitment easier for those associations that don’t participate in one-month or one-day drives like National Membership Day, she added.

The committee is driving home the message that NAHB membership is more important than ever as the home building industry begins to climb out of the worst economic meltdown in memory.

“Where else can you get the great benefits we offer? Where can you get the education, the networking? You can only get it here, and the value is much greater than the cost of membership,” said Membership Chair Robin Newhouse of Dominion Virginia Power in Fredericksburg.

Robin Newhouse, NAHB Membership Committee chairman

Volunteer Carole Jones was marking her fifth year working the phones on Membership Day at the National Housing Center. Jones, who with her husband and NAHB Past Chairman Bob owns Robert R. Jones Homes in Bloomfield Hills, Mich., enjoys the festivities, whooping and hollering. “This is so much fun,” she said.

“We grow by one member at a time,” agreed Membership First Vice Chair Dianne Beaton, principal of 2DiFore Marketing Solutions in Manchester, N.H. “We have to engage them and get excited.”

Builders in Joplin Among Those Digging Out of Worst Tornado in Half a Century

When the most devastating tornado in more than 50 years ripped through Joplin, Mo., on May 22, it left at least 125 dead and an estimated $3 billion in damaged or destroyed homes, schools and business.

But even as members of the Joplin-based Home Builders Association of Southwest Missouri work alongside their neighbors to dig out from the rubble — two of 14 board members lost their homes as a result of the tornado — the catastrophe also shows the hope, resilience and strong bonds within the industry.

“I wanted to send a quick note to thank all of you for sending us your prayers and good wishes,” Executive Officer Crystal Harrington, who watched the storm unfold from her HBA office window, said in a message posted to the NAHB list serve for state and local HBA executive officers. “Please know that every message made my heart leap and raised my spirits.”

Harrington’s fellow EOs lept in quickly with offers of help. Matt Morrow, EO of the HBA of Greater Springfield, Mo., is coordinating efforts through the association’s charitable foundation at www.springfieldhba.com/helpjoplin to collect donations for the stricken community.

The devastation in Joplin, Harrington said, “is as bad as it looks on the news. I wept as I watched Diane Sawyer of ABC News report from in front of the hospital where my first grandchild was born a few short months ago,” a report that included a photo vignette of affected residents including HBA members.

“We have dozens of members without homes, but I can’t find one who is feeling sorry for themselves, or bemoaning their lot in life,” she said. “The HBA will be open for business tomorrow — and we will be serving our community and making our members proud.”

“What a beautiful and touching story of your own resilience in a time of extreme tragedy that very few of us could ever imagine,” said Dan Dressman, EO of the Home Builders Association of Greater Cincinnati in a list serve message. “We are all praying for a much better tomorrow in Joplin.”

NAHB Communications has provided sample consumer information templates to help the SW Missouri and surrounding HBAs promote the use of reputable contractors as the communities begin to rebuild.

Coincidentally, NAHB Economist Elliot Eisenberg, who regularly speaks to community groups about industry-related issues, had been slated to give a presentation for the HBA the day after the disaster struck. He spent Sunday night in a nearby hotel room.

“Joplin has suffered immense physical and psychological damage. It is now our turn, the turn of the home builders, to help make these communities whole and give them back part of what was brutally taken from them,” he said.

“In my speeches as an economist I regularly point out the number of jobs created and the amount of tax revenue generated by home building. But, to be honest, that misses the bigger point. What rebuilding homes in Joplin and New Orleans and Memphis does is offer people and communities hope about the future, comfort that they are part of it and validation of their lives,” Eisenberg said.

“They have predicted more severe storms for tonight, but oddly, there is a sense of calm. We will be fine,” Harrington told her fellow EOs on Tuesday night. “I will never again fail to send my wishes to one of you when you are in distress and this listserve is available to me,” she said.

NAHB and home builders associations throughout the federation are ready to help the victims of the severe tornadoes and flooding that wiped out homes and businesses and claimed hundreds of lives throughout the South and the Midwest.

NAHB’s Home Building Industry Disaster Relief Fund (HBIDRF) is a recognized 501(c)(3) charitable organization that assists areas affected by disaster by facilitating the rebuilding of communities that makes funds available for direct contribution to other recognized charities working to rebuild and/or repair housing in the affected area.

The Home Builders Association of Greater Springfield, Mo., and the Home Builders Association of Alabama also have foundations to help tornado victims in their areas:

Coalition Urges HUD to Improve FHA’s Condo Mortgage Approval Process

To enable more buyers to purchase condominiums, the Federal Housing Administration should eliminate its current restriction against FHA financing in buildings where less than half of the units are owner-occupied, NAHB and three other organizations recently told Robert C. Ryan, the acting assistant secretary for housing and federal housing commissioner at the Department of Housing and Urban Development.

The coalition provided the information to the FHA as part of a regulatory review process for federal agencies initiated by an executive order from the Obama Administration in January.

For more information, email Steve Linville at NAHB, or call him at 800-368-5242 x8597.

Remodeling Shaping Up as a Bright Spot for the Housing Industry

Not suffering as severely during the downturn as new construction and appearing to be gaining ground faster, the remodeling market is a relative bright spot on the current housing scene, panelists participating in a May 26 NAHB webinar on the remodeling outlook said, but home owner improvements could encounter some weakness later this year.

In the current recovery both remodeling and home building are dependent upon improvements in the economy, jobs and consumer confidence, all of which have been slow to rally but should start providing some momentum at the end of this year and in 2012, said NAHB Chief Economist David Crowe.

“This is the reverse of the typical recovery in which housing is the leader,” he said. “It’s not happening this time because of the excess housing inventory and small movement in house prices.”

Following a pattern similar to new construction’s, spending on owner-occupied improvements should stage “a nice recovery” and show a healthy percentage increase next year, bringing it up to the level of activity experienced at the end of 2007, he said, with considerably more growth ahead.

NAHB’s Remodeling Market Index (RMI) for this year’s first quarter was already registering improvements in the confidence of remodelers and was approaching 50, he said, the level on the 100-point index where equal numbers of those surveyed report that conditions are good and bad.

Four sub-components of the RMI already crossed over into positive territory during this year’s first quarter: with major additions and alterations to rental properties at 55.2, owners’ minor additions and alterations at 56.2, owners’ calls for bids at 54.6 and appointments for proposals for remodeling jobs at 52.4.

The reasons cited by remodelers in the first quarter survey for why customers have been reluctant to commission jobs point to factors that are the same or similar to those that have been holding back home sales.

Ninety percent of the remodelers said that their prospective clients have been hesitant because they think it is hard to obtain financing; 81% indicated that customers were constrained by the loss of home equity; and 74% said their customers were uncertain about their future economic situation.

“The secret to this recovery,” both for remodeling and home building, is that significant gains in employment are needed “to give workers confidence they will keep their jobs,” Crowe said. Only recently have jobs steadily begun to gain some real ground.

In general, remodeling is currently outperforming construction, he said, because “it’s an alternative to moving.”

In healthier times, remodeling tends to derive much of its strength from home sales, with consumers having the tendency to fix up a home before they sell it or soon after they buy it.

Kermit Baker, a senior research fellow at Harvard University’s Joint Center for Housing Studies and the project director of its Remodeling Futures Program, said that even with its recent decline, the remodeling market is shaping up at $300 billion annually.

The Joint Center’s measurement of total annual remodeling activity is broader than some because it includes spending on rental units and maintenance and repair of owner-occupied properties.

Total volume dropped from a peak of $326 billion in 2007 to $286 billion in 2009, a substantial decline of $40 billion, but well below the 75% slump in housing starts.

As a result, improvement and repair expenditures as a share of total residential investment climbed to 70% in 2009 and remained at roughly the same level in 2010, he said, up dramatically from a low point of just below 40% in 2005 when home building was at its peak.

Remodeling has gone through “a serious downturn by historical standards, though paling compared to the housing recession,” he said.

The volume of remodeling grew by a few percentage points in 2010 and it is “beginning to climb back,” with prospects for average annual growth of 3% several years into the future.

Based on the Joint Center’s Leading Indicator of Remodeling Activity, Baker suggested a downward blip for the nascent remodeling recovery in the second half of this year, “reflecting weakness in the broader housing market and home sales earlier this year and at the end of 2010” and a softening in sales at home improvement centers.

Following which, the industry should receive another boost of energy in 2012, he said.

In the meantime, there are “confused signals at present” and remodeling is “likely to have a volatile year, with a lot more variation than typically.”

As might be expected, Baker said, among the nation’s top 500 remodeling contractors, those specializing in exterior replacements of such items as windows and siding fared best during the downturn, with about a 5% dip in their median revenue in 2009.

Design/build contractors, who saw their business surge along with the housing market upturn of 2003-2007, posted a steeper median decline of 20%, and full-service firms — including kitchen and bath specialists -— were in the middle, losing about 12% of their sales.

Jobs related to green building and aging in place have both held up fairly well during the downturn, Baker said, driven, respectively, by the public’s conviction that energy costs will stay high and the fact that seniors have been in their homes long enough to still have large amounts of equity even after recent home price declines.

Another source of work for remodelers — sprucing up distressed properties — represents a growing opportunity in many areas of the country, such as Phoenix and Las Vegas, where foreclosures have been rampant.

In a survey conducted by the Joint Center more than 12 months ago, over a third of the respondents said they had worked on projects involving distressed properties over the past year, he said.

A more recent survey conducted in February found this niche market holding steady.

Those remodelers engaged in this line reported that it accounted for just under 20% of their past year’s revenue, and Baker estimated that it is responsible for some 5% to 10% of remodeling revenue nationally, “a share that will grow as homes work their way through the foreclosure process.”

Tabulations of the Home Improvement Research Institute’s (HIRI) 2010 survey of recent home buyers found that buyers of distressed properties spend more on remodeling in the first year after their purchase, by an average of about 15%.

While distressed properties are an important growth segment for the industry, Baker cautioned that remodelers who aren’t already located in the markets seeing the bulk of this activity probably don’t want to move to them because they aren’t among the strongest and existing home owners “don’t have much equity in these areas and are nervous about home prices.”

Baker observed that today’s remodeling customers are more budget-conscious and opting for smaller projects than before the downturn largely because they have been using their own money rather than loans for financing.

This February, HIRI’s monthly Consumer Sentiment Tracking Study indicated that 72% of the home improvement market is being supported by the home owner’s cash and funds.

“Financing remains a major issue for the industry,” Baker said. “In addition to consumers’ uncertainty over house prices, lenders are cautious, and many home owners are paying down debt and less likely to take on new debt.”

Parts of the country where remodeling has been faring the best tend to be places with the most stable home prices, he said.

Among the 45 largest metro areas for which data was available, home prices fell an average of 5.5% on the CoreLogic House Price Index year-over-year for the 12 months ending in December 2010. However, in key markets in the Northeast, Texas and California, prices were beginning to recover during that period.

Among those metro areas on the mend were: Boston, where prices were up 6%; Houston, up 2%; Washington, D.C., up 1%; and New York and Riverside, Calif., where they were flat.

Worst on the map housing price-wise were: Detroit, down 11%; Phoenix and Orlando, down 10%; St. Louis and Miami, 9%; Jacksonville, Fla., Seattle and Portland, Ore., 8%; and Chicago and Baltimore, 7%.

Rising house prices are beneficial, Baker said, because they help reduce the percentage of houses that are underwater. Households that owe more on their property than it is worth have “difficulty moving to a different home or area of the country to take advantage of economic opportunity,” he explained.

In last year’s fourth quarter, 25% of mortgages were underwater nationwide, and in some cities that share was more than half — Las Vegas, 69%; Phoenix, 57%; and Orlando, 56% — or close to it: Riverside, Calif., and Tampa, Fla., 49%; Miami, 48%; Jacksonville, Fla., 47%; and Sacramento, Calif., and Detroit, 43%.

“The nature of the recovery is somewhat unusual,” Baker said, “favoring the manufacturing sector, which is unusually strong, and disproportionately favoring the Northeast and Midwest, where job growth is stronger than expected.”

Some parts of the West are doing well, such as coastal San Francisco, where there wasn’t as much overbuilding as some other locations in California, he said.

“The states that didn’t have as much disruption in the housing market will be the first out, compounded with good underlying economies” Crowe said. “Texas and the farm belt and the energy belt are where we will see the best recovery” through next year.

For more information, email Kelly Mack at NAHB, or call her at 800-368-5242 x8451.

The publication includes a CD containing 160 essential forms and documents — culled from successful remodelers across the country — that you can customize to suit your business needs.

'How to Find a Professional Remodeler' Brochures Available at BuilderBooks.com

"How to Find a Professional Remodeler," available at NAHB BuilderBooks, promotes the professionalism of your remodeling business by offering a wealth of valuable advice to customers on the process of selecting a remodeler.

The newly updated brochure highlights the before and after photos of the most frequently remolded rooms in the house.

Lead Rule Violation Caught on YouTube Spurs EPA Enforcement Action Against Contractor

A YouTube video of two workers scraping paint from the side of an older home in Rockland, Maine, has spurred the U.S. Environmental Protection Agency to take enforcement action against a contractor for failing to comply with the Lead: Renovation, Repair and Painting rule designed to protect children from exposure to lead-based paint.

Despite being an EPA-certified renovator, contractor Colin Wentworth is facing a fine for allegedly failing to apply for his firm’s certification and follow the lead-safe work practices required under the regulation — including posting warning signs, establishing a plastic containment around work areas, collecting dust and debris, using high-speed scraping machines equipped with HEPA filters and maintaining records to demonstrate compliance with the rule, the EPA said.

The violations were brought to the EPA’s attention through an anonymous tip linking to the video, which was posted on YouTube in October. The video, which has been taken down, showed workers using power equipment to remove lead paint from an exterior wall without a defined containment area to capture lead-containing dust or debris.

At least six children, one of whom was less than six years old, lived in the four-unit building at the time of the renovation.

The EPA’s Region I office in New England brought the enforcement action, the first to be taken against lead-safe work practice violations under the rule, which went into effect 13 months ago.

"It's interesting to note that the EPA chose to launch its enforcement program by taking action as a result of an anonymous public video posting," said Amy Chai, senior counsel at NAHB.

Though the agency did not indicate a specific fine for the violations, under the rule contractors can be liable for a maximum of $37,500 per violation per day, according to the EPA.

"In New England, we have a high proportion of older houses where lead paint can still be present," said Curt Spalding, regional administrator of the EPA's New England office. “Many renovation firms have done the right thing by becoming certified, sending their employees to training and following the appropriate, health-protective work practices.”

“Enforcement of these rules is important to protecting children and the business interests of those contractors who are following the rule," he said.

“It’s important that remodelers get trained and obtain certification from the EPA, as well as follow the lead-safe work practices outlined in the rule to minimize exposing children to lead hazards,” said NAHB Remodelers Chairman Bob Peterson, CGR, CAPS, CGP, and president of Associates in Building & Design, Ltd. in Ft. Collins, Colo. “NAHB has created resources for remodelers to help them comply with the rule and adapt their businesses accordingly.”

NAHB advises remodelers to review the requirements of the lead regulation and use the resources available at www.nahb.org/leadpaint to prepare for compliance.

The member-only tools include sample contract language, liability and insurance guidance, materials for educating consumers and more.

For more information about the lead rule, visit www.nahb.org/leadpaint; or email Matt Watkins at NAHB, or call him at 800-368-5242 x8327.

The publication includes a CD containing 160 essential forms and documents — culled from successful remodelers across the country — that you can customize to suit your business needs.

'How to Find a Professional Remodeler' Brochures Available at BuilderBooks.com

The newly updated brochure highlights the before and after photos of the most frequently remolded rooms in the house.

Overtime Statistics Indicate It’s Time for Salespeople to Get Ready to Get Back to Work

New-home salespeople seeking to get back in the market should start preparing their job search because private sector employment is beginning to show signs of improvement.

But don’t take my word for it. Anyone looking for a sign or indicator of job growth should examine the recent trend in overtime statistics. Overtime has been on the rise.

According to the U.S. Department of Labor, factory workers put in 4.2 hours of overtime on average in February, the highest level since July 2007. February also marked the fifth straight month the number of people working part-time declined.

This is good news for the unemployed and underemployed because it means that major corporations, rather than continue to pay their current workforce more overtime for their growing workload, will begin to add jobs instead.

So, as new jobs slowly are being created, are you fully prepared? Do you have everything you need to present yourself in a professional manner for the job you want?

Being prepared means taking a fresh look at the three fundamental tools of your job hunt — your resume, interview preparation and interview skills.

Investing the time to develop a resume that properly represents you and to prepare for job interviews is critical. There are volumes of material on resume writing and interviewing tips. There also are several excellent online resources that can assist you.

Following are several tips — and new thoughts — on writing resumes that might surprise you. Do your own research and invest the time prior to responding to an interview appointment.

Being well prepared and confident will definitely set you apart. People sense waffling. They also respond positively to confidence. The biggest mistake job seekers make is failing to prepare for their interview. They simply show up and hope they’ll be liked.

A well-cited study by the University of California at Los Angeles revealed that body language accounted for 55% of an individual’s likability. This was supported by an article on Forbes.com, which indicated that body language comprises as much as 70% to 90% of human communication.

With that in mind, don’t overlook its importance, especially during the first few seconds or minutes that you are being evaluated.

Video job interviews are becoming more commonplace as corporations cut costs and trim travel budgets.

Video interviews are also used as a pre-screening tool for higher level positions, with the tapes being distributed for wider evaluation. After that, the top executive candidates will be selected and invited for a personal interview.

Yes, the job market is tight and the competition is tough. But being prepared will give you confidence and help you relax, at least a little, when you interview for a job.

Above all, be yourself during the interview. Don’t be nervous, cocky or subdued. Instead, be confident and prepared — with a well-written resume and positive energy.

JoAnne Williams, CCRM, MCSP, is the founder, president and CEO of J Williams Staffing, a multi-award winning staffing, recruitment and placement firm servicing the new-home and residential leasing industries. Her company provides services in California, Arizona, Nevada and Texas, with offices opening soon in Colorado. Williams and her executive staff frequently counsel sales managers on staffing plan options and alternative compensation programs, and during the most recent housing downturn, they were frequent speakers at various local association offices. For more information, email Williams, or call 949250-1923.

By offering a range of options and upgrades, the design phase provides the best opportunity to make a lasting impression and ensure that buyers will favorably remember the entire buying experience.

The book covers everything from the home buying process and new home financing to strategies for making better sales presentations and sizing up the competition. It teaches readers how to overcome customers’ concerns and provides specific examples of how to explain the benefits of new home features in customer-friendly language.

“Think Sold” provides insights on how to approach sales and life from a position of optimism that will create successful outcomes; how to improve upon potential customer prospecting and follow-up skills; and how to communicate effectively with various types of buyers and learn how to adjust communication strategies to increase rapport and alignment with buyers’ motives.

For additional cutting-edge sales and marketing information, subscribe to NAHB’s Sales + Marketing Ideas magazine (www.smimagazine.com).

Click here to learn about membership benefits of the National Sales and Marketing Council and the Institute of Residential Marketing.

Promote National Homeownership Month in June With NAHB Resources

As the housing market continues to struggle to recover from the economic downturn, National Homeownership Month in June offers an opportunity to direct the attention of the public and the media to the many benefits of homeownership.

NAHB’s National Homeownership Month Promotional Kit has resources that highlight many of the incentives to buy that exist in the current market — affordable home prices, low interest rates, the large selection of homes for sale in all price ranges, and banks ready to loan to buyers with good credit.

The resources in the kit include:

Talking points on the benefits of homeownership
A guide to using social media to promote National Homeownership Month
National Homeownership Month radio spot scripts and website banner ads
Consumer outreach materials — including a “Checklist for Finding and Hiring a Builder or Remodeler,” a “Top Reasons to Buy a Home” handout and articles on topics of interest to current and potential home owners.

The “Guide to Celebrating National Homeownership Month” is an ideal starting point for members and state and local associations to get ideas for events that can engage the media, city and county officials, local home buyers and other members of the community in celebrating homeownership.

The National Homeownership Month Promotional Kit is available to NAHB members and affiliated HBAs at www.nahb.org/homeownershipmonth.

NAHB is encouraging members and HBAs to use these customizable resources and event ideas in June and throughout the year to promote homeownership.

For more information on the kit or any of NAHB’s public relations resources, email Gwyn Donohue at NAHB, or call her at 800-368-5242 x8447.

Slow Spring Has Overall Construction Spending Outlook for 2011 Looking Flat at Best

Statistics for the early spring suggest that construction activity overall is just hanging on, pointing to a year that is unlikely to produce either big gains or declines for the industry.

McGraw Hill Construction on May 18 reported that new construction starts in April were running at a seasonally adjusted annual rate of $400.2 billion, basically the same amount as in March.

Multifamily housing was one of the clear winners in April, with its yearly starts pace climbing 43%. While on an upward path, however, the monthly pattern has been up and down, McGraw Hill noted.

Not faring as well, both stores and warehouses posted large April declines, sliding 22% and 30%, respectively, according to McGraw Hill.

Office construction was also down for the month, dropping 55% from March, which received an exceptional boost from a $1.1 billion data center for the National Security Agency in Utah.

Bucking April’s downward bent for commercial building, hotels jumped a rousing 91%, bolstered by large projects in New York City and Bloomington, Minn.

“The pattern of construction starts has been essentially flat within a broad range for about two years now, and the past three months have come in towards the lower end of that range,” said Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction.

“There have been a few positive signs in recent months, such as the strengthening trend shown by multifamily housing and the pickup for manufacturing plants,” he said.

“However, single-family housing remains stalled, and the tough fiscal environment continues to dampen the prospects for institutional building and public works, even with the occasional support coming from large projects such as took place during April,” Murray said.

The bottom line, he concluded: “More and more, it’s looking like the best that can be expected this year for the overall level of construction starts is flat activity.”

In the meantime, weak or weakening demand for new construction projects in both the private and public sectors has been making it more difficult for contractors to cope with stiff price hikes for key building materials, the Associated General Contractors of America (ASC) said on May 20.

“Contractors have been clobbered for several months by double-digit price hikes for diesel fuel, copper and steel products,” said Ken Simonson, AGC’s chief economist.

Simonson noted that the producer price index for all materials increased by 1.4% in April and 7.1% over the past 12 months.

By comparison, the price of finished buildings rose 1.1% or less in April and only 1.7% or less over the past year, depending on the building type.

Simonson said the most extreme price increase was for diesel fuel, which jumped 5.7% in April and 41.6% year-over-year.

Prices for copper and brass mill shapes climbed 2.6% in April and 14.3% year-over-year, while steel mill product prices increased 2.2% and 13%, respectively.

Slipping from their highs in recent weeks, prices for crude oil, iron and steel scrap, and copper futures — items that usually indicate near-term price movements for diesel fuel, construction steel and copper wire and pipe — may have seen the worst of the increases for now, although they remain volatile, Simonson said.

The AGC economist cited modest increases in construction employment over the past three months, but indicated that the slow jobs recovery could be undermined by rising building costs as well as by public sector funding cuts.

“It is good to see more states adding construction jobs for the year ending in April than at any point since February 2008, Simonson said.

“However, most of the gains were modest at best while the losses were more severe in more states than last month,” he said.

In April, 19 states and Washington, D.C., added jobs over the past year, according to an AGC analysis, but the gains were less than 3% in all but four states.

At the same time, four states experienced double-digit construction job losses: Minnesota, down 14.1% and losing 12,900 jobs; Nevada, down 11.6% or 7,100 jobs; Wisconsin, off 11.3% or 11,000 jobs; and Colorado, dropping 11.2% and losing 13,100 jobs.

Florida lost 20,400 construction jobs for the 12 months ending in April, making it the state with the highest number of job losses during that period, followed by New York, Colorado, Minnesota and Georgia.

While sentiment to reduce the federal deficit is on the rise and demand for public sector spending is dwindling at every level of government, a new report from the Urban Land Institute (ULI) and Ernst & Young found that the U.S. is lagging behind infrastructure spending in other major countries.

Outside of the U.S., “in most of the developed world and in many emerging markets, countries have committed to fulfilling infrastructure agendas as essential for sustaining or enhancing living standards in an increasingly competitive global market,” said their report.

“The U.S. is facing increasing federal, state and municipal budget deficits, and lacks any type of comprehensive national policy or the political will to develop a long-term approach to funding the significant maintenance needs of aging U.S. infrastructure, much less the modernization and greenfield development of critically needed new projects,” said Howard Roth, Ernst & Young’s Global Real Estate Leader.

“We need to refocus our priorities: streamline the procurement process, attract private capital more efficiently, strategically invest in projects with national merit and regain our stature as a global competitor,” he said.

“We need to take a page out of the playbooks of several nations around the world highlighted in our report, or we face the risk of serious deterioration of our country’s economic and social well-being,” Roth said.

With $2 trillion needed just to repair and rebuild deteriorating roads, bridges, water lines, sewage treatment plants and dams, the nation’s infrastructure woes will only get worse, as the politically fractured government erodes support for both existing upgrades and new initiatives, said ULI Executive Vice President Maureen McAvey.

Public spending on transportation and water infrastructure as a share of U.S. gross domestic product peaked at 3.1% in 1963, then declined steadily to 2.4% in 2007, according to Congressional Budget Office data.

For information on commercial building resources available from NAHB, email Lisa Leone, or call her at 800-368-5242 x8455.

Applications for Commercial Builders’ Awards of Excellence Open Through August 1

Applications are now being accepted for the Awards of Excellence, which are sponsored by NAHB’s Commercial Builders Council.

The Awards of Excellence recognize achievements in the commercial building industry for design (remodeling and new construction), market appeal, energy efficiency, challenges faced during building and overall project success.

The awards competition is open to all builders, architects, designers, engineers, contractors, developers and building owners nationwide. Any non-residential project or facility in the U.S. — completed after Dec. 31, 2009 — is eligible for consideration. Multiple entries are accepted.

A panel of building industry professionals will select the winning entries. The judges will choose a Project of the Year and Grand, Merit and Chairman’s awards in all categories. Winners will be featured in Commercial Builder Online Magazine.

For more information, email Lisa Leone at NAHB, or call her at 800-368-5242 x8455.

Freestar Bank Project Makes Bailey Edward Architecture a Star

The design of the Freestar Bank building reflects the neighborhood lender’s mission to provide knowledgeable, reliable financial services in a comfortable and casual environment.

Having previously designed a Freestar branch in Champaign, the architects came to the project with a working acquaintance with the bank's needs.

“Freestar Bank insisted that we provide their clients with a comfortable atmosphere that fosters communication and a sense of community. For this reason, the entry and offices open onto a central lobby where clients can relax and enjoy a cup of coffee by the fireplace,” said Jessica Gilbert, project architect for Bailey Edward.

“Top quality materials and finishes were used throughout to emphasize the high value that Freestar places on its clients,” Gilbert added.

“The design speaks of strength and durability — certainly a significant message for a consumer banking business,” said Carl Harris, 2010 chair of the Commercial Builders Council.

The building’s visibility, with its frosted-glass entry tower, and its location in a downtown shopping district have helped bring in new clients for the bank. The designers also worked to ensure an easy flow of traffic around the building to accommodate drive-up and walk-in customers.

The building can be viewed from all sides and was designed to be appealing from any angle. Mechanical equipment and roof penetrations were concealed within a sloping roof with a dropped center.

The building is also energy-efficient. All its exterior walls were constructed using insulated concrete forms to optimize thermal resistance, and its rooftop HVAC units exceed energy code requirements by more than 10%.

Other energy-efficient features include occupancy sensors, energy-saving lamps and dual-glazed, low-e coated windows set in thermally broken aluminum frames.

“Excellent communications among the design team, owner and contractor played a key role in the overall success of the project,” said Kevin Schnebly, a branch manager for Bailey Edward. “Everyone’s commitment to quality was clear through all stages of construction.”

The Awards of Excellence recognize achievements in design, market appeal, overall aesthetics, challenges faced during building and overall success of commercial projects that are either built or renovated and range in size from less than 5,000 to more than 100,000 square feet.

For more information on the award and NAHB resources for commercial builders, email Lisa Leone, or call her at 800-368-5242 x8455.

June 1: Webinar Provides Builders a Guide to Better Appraisals

As home builders continue to have difficulty obtaining accurate appraisals, an upcoming NAHB educational webinar examines recent changes in appraisal standards and practices that can work to the advantage of association members.

During the webinar, a panel of experienced appraisal practitioners and other industry professionals will provide an update on appraisal regulations and lend advice on what builders can do to improve the accuracy of home valuations.

The webinar will also include tips on dealing with appraisals in distressed markets, the process for addressing appraisal errors and how to go about getting a new appraisal when the original appraisal is faulty.

The seminar is part of the NAHB Webinar Wednesday series, which provides timely information on economics, finance, design, marketing and other topics of interest to home builders, remodelers and developers.

Click here to register, then select the "Builder Guide to Appraisals" webinar and add to your cart. You must continue with the checkout process to fully register and to receive a confirmation and login instructions prior to the webinar.

Please note: If you're an NAHB member, you'll have to login with your password to receive the free pricing.

For more information, email Steve Linville at NAHB, or call him at 800-368-5242 x8597.

June 8: Webinar to Discuss How Salespeople Can Approach Financing With Buyers

Anthony Grasst, regional builder manager with MetLife Home Loans, and Chris Seung, owner of Customer Connect Sales Training (C-CST), will lead the webinar.

The webinar is $19.95 for NSMC members, $24.95 for NAHB members and $44.95 for non-members.

For more information, email registrar@nahb.org, or call the Office of the Registrar at 800-368-5242 x8338.

The NSMC will present two additional sales and marketing-related webinars in NAHB’s 2011 Webinar Wednesday series. They will include:

For additional cutting-edge sales and marketing information, subscribe to NAHB’s Sales + Marketing Ideas magazine (www.smimagazine.com).

Click here to learn about membership benefits of the National Sales and Marketing Council and the Institute of Residential Marketing.

Education Calendar

View the variety of professional development offerings available through NAHB and its local associations at www.nahb.org/education.

June Meeting to Produce Draft of 2012 National Green Building Standard

At a June 13-17 meeting at the National Housing Center in Washington, D.C., a consensus committee working on updating the National Green Building Standard (NGBS) will evaluate 465 changes to the original 2008 version of the standard proposed by the public.

The committee will also be considering recommendations from seven advisory task groups that first met in late March and have since been assessing potential changes related to: administration; site and lot development; resource efficiency and indoor environmental quality; water efficiency; energy efficiency; multifamily; and remodeling.

“These will be five long days of meeting because there are so many recommendations that the committee needs to evaluate,” said Don Pratt, a builder and remodeler from Auburn Hills, Mich., who is chairman of the consensus committee.

Pratt voiced confidence that the end result will be an even better standard when the revised version is published in 2012.

The consensus committee will make its decisions through formal balloting and then release a draft of the standard for public comment.

The committee will take formal action on those comments at a meeting in late November..

Initiated in 2007 by the International Code Council and NAHB, the National Green Building Standard was developed by a 42-member consensus committee and approved by the American National Standards Institute (ANSI) in January 2009, making it the first point-based rating system for green residential construction, remodeling and land development to be approved by ANSI.

More than 2,200 projects have been certified to the standard since its approval by ANSI.

“I think we are seeing in this process that the scope of green building for residential construction and remodeling will be expanded,” said Ray Tonjes, a builder from Austin, Texas, who is serving as vice chairman of the consensus committee.

“We’re looking at refining the point structure in the green scoring system, and refining the practices for renovations and additions,” he said.

Once the committee has completed its work, the newly updated National Green Building Standard will be submitted to ANSI for approval in 2012.

As an ANSI-approved standard, the document is subject to periodic updates based on consideration of advances in building codes and technology and other developments.

For additional information and for all future updates on the 2012 NGBS development process, visit www.nahbrc.com/ngbs.

“The National Green Building Standard,” available through BuilderBooks.com, provides “green” practices that can be incorporated into multifamily and single-family new home construction, home remodeling and additions and site development.

The standard covers lot design, resource, energy and water efficiency; indoor environment quality; and owner education.

Currently the first and only ANSI-approved green building rating system, the National Green Building Standard is the benchmark for green homes.

The "National Green Building Standard Commentary," available through BuilderBooks.com and a companion to the ANSI approved "National Green Building Standard," that provides valuable insight to the intention and implementations of the practices and provisions found in the green building standard.

The "Commentary" is a useful resource for any designer or builder using the ICC 700-2008 as a rating system for developing or renovating residential properties of all types to reduce their relative impact.

More Than 5,400 People Have Earned Their Certified Green Professional (CGP) Designation

The Certified Green Professional (CGP) designation teaches builders, remodelers and other industry professionals techniques for incorporating green building principles into homes using cost-effective and affordable options.

Earning the CGP demonstrates to clients and peers your commitment to the best and latest in green building practices and techniques. More than 5,400 people have earned the CGP designation to date.

“Build Green and Save: Protecting the Earth and Your Bottom Line,” available through BuilderBooks.com, is a comprehensive, easy-to-read reference that shows builders how to identify and select green building materials; implement green construction techniques; explain the benefits of green housing and offer affordable green building solutions to consumers; and use resources wisely and reduce water and energy consumption.

For answers to questions about National Green Building Certification by the NAHB Research Center, certification to the standard or the guideline sunset, complete and submit the Contact Us form on the NAHBGreen website.

Energy Retrofits, Consumer Education Could Shape the Future of Green Housing

Remodeling and renovation may be the next big horizon for green home building, according to veterans of the industry attending NAHB’s National Green Building Conference & Expo on May 1-3 in Salt Lake City, provided that there are enough educated consumers around who recognize the advantages of owning an energy-efficient home.

Builders participating in a panel discussion on the future of sustainably built housing said they had been around long enough to see mainstream code-built homes catching up with the performance of green homes, and they said that staying ahead of the competition will increasingly be a matter of who delivers the best quality to the marketplace.

In his opening keynote address, Mike Holmes, host of “Holmes on Homes” and “Home Inspection” on HGTV, suggested green home building represents a movement to build homes the way they should be built, which he demonstrates regularly on television by taking existing homes apart to get to the source of serious problems reported by the owners.

The revision of the National Green Building Standard now underway is putting more emphasis on retrofitting the existing housing stock, said Michael Chandler, of Chandler Design-Build in Chapel Hill, N.C., who noted that certification for remodeling jobs was relegated to the footnotes when the standard was originally published.

Matt Belcher, of Belcher Home in St. Louis, said that “97.5% of all houses built 20 years ago or more” are not up to the performance levels they could attain if they were updated with today’s top energy-saving products.

“We can do a better job with better quality control,” said Belcher. “And we need to address the tens of thousands of remodelers that are part of our market,” recognizing that there are already “highly qualified small business owners who can do these retrofits.”

T.W. Bailey of WaterMark Custom Builders in Frisco, Texas, said that his business, like builders across the country, has been able to supplement sales in today’s soft marketplace by expanding into remodeling.

A case in point was a 1,500-square-foot add-on to a 1958 home — a $200,000 project that Bailey said he was able to get because he was knowledgeable of what needed to be done to update the home when he presented his ideas to the owner.

In his many annual consultations with home owners, Peter Pfeiffer, of Barley & Pfeiffer Architects in Austin, Texas, said he might suggest to a prospective customer seeking a room addition, “while you’re at it, let’s increase the home’s energy efficiency" and also propose reworking "the square footage you already have instead of adding on 400 square feet.”

“For the general public, it’s not only them coming to us, it’s us going to them and offering to do the work,” said Chandler. In his local market, he said, there are houses that are only 10 years old “that desperately need energy upgrades.”

But “what will it take home owners to understand that they need a retrofit?” asked Belcher. “Education is the key. Communities don’t realize what the industry can do. Get with the city and let them know.”

Panelists also reported progress in having green features included in Multiple Listing Services and establishing market data on comparables, a major area for educating home buyers and the lending community on the value of green. (For a related story in Nation’s Building News, click here.)

However, the fact that those looking for a house in today’s marketplace tend to be price-conscious no matter how little or much they know about green, does pose a challenge.

“The competition sets the price,” conceded Belcher, “and the only thing I can control are my costs. You have to prove a better product can be built at a competitive price.”

A proponent of using the best construction materials — such as mold-resistant drywall even if it does cost $1 more a sheet — Holmes said that if his costs do add up to a 15% premium for building green, then he can stay competitive by reducing the size of the home by 15%.

“We need to educate the home owner, the one buying the home,” Holmes said. “They don’t understand green.”

It is also important to educate home buyers about maintaining a green home, he said, and extending the educational process to apprentices in the construction trades so that they can be certified in new home technologies.

Development of Holmes' first community, Wind Walk, is getting underway south of Calgary in Alberta, Canada, and will demonstrate Holmes’ vision of a self-sustained community that reflects “a different thinking” and provides “nothing but the best.”

The compact neighborhood will preserve open space and feature high-performance homes within walking distance of schools, restaurants and shopping and close to farms. Solar, wind and geothermal technologies will reduce the community’s demand on the power grid.

Holmes said he has teamed up with manufacturers to provide products that enable home owners to monitor how much energy they are using and to open up remote communications between the owners and the systems in their homes.

“Everyday people should be buying green homes,” he said. Buying a house that employs technologies that can pay the owner back with reduced operating costs “makes sense to people.”

Holmes is constantly on the go, showing how to build better in locations such as New Orleans where recovery efforts are underway.

Responding to the tornado devastation in parts of the U.S. this spring, he wants to build a “tornado-proof” home that is round, enabling the wind to wrap around it.

“This is what I was meant to do, throw the pebble in the pond and watch the ripple effect,” he said.

Admitting it has a few faults, Holmes was enthusiastic about concrete as a green material that provides a high thermal mass to keep interiors cooler in the summer and warmer in the winter. It is also naturally water-repellant, he said, which makes it a good alternative to wood for home exteriors in places like Vancouver “where it rains straight for 50 days.”

Danny Karch, national green building director for the Sustainable Forestry Initiative who works out of Canadiac, Quebec, in Canada, stressed the advantages of treating wood as a crop and a naturally renewable resource.

“You can feel good about using wood,” Karch said. In North America, which accounts for two-thirds of the world’s certified forests, “less than 2% of commercial forested wood is harvested each year,” he said.

While less than 10% of forests are certified globally, he said, “a lot of other countries are starting to look at this and realize that natural extraction from forests is critical.”

The standard covers lot design, resource, energy and water efficiency; indoor environment quality; and owner education.

Currently the first and only ANSI-approved green building rating system, the National Green Building Standard is the benchmark for green homes.

More Than 5,400 People Have Earned Their Certified Green Professional (CGP) Designation

Earning the CGP demonstrates to clients and peers your commitment to the best and latest in green building practices and techniques. More than 5,400 people have earned the CGP designation to date.

Energy-Use Monitoring a Trend to Watch in Green Home Technologies

Providing technology that enables home owners to monitor their residential energy usage is a growing trend for electronics systems contractors (ESCs) who are working with builders and remodelers on the installation of new green home technologies, according to panelists at NAHB’s National Green Building Conference & Expo earlier this month in Salt Lake City.

Products such as sensors that turn off the lights when a room is not occupied and programmable thermostats that reduce energy for heating and cooling during times of the day when nobody’s home can “dramatically cut costs,” said Ken Erdmann, an ESC and co-founder and president of Erdmann Electric in Springville, Utah.

Energy management and monitoring devices are simple for a qualified electrician to install, Erdmann said, and they are a proven way to focus the attention of home owners on what it is costing them to operate their home.

A study by Stanford University, he said, found that home owners reduced their energy consumption by as much as 10% by being able to see how much energy they were using.

Consumers themselves are increasingly aware of green-tech product offerings that can help them cut costs and improve how their homes function.

The 9th Annual State of the Builder Technology Market Study published recently by the Consumer Electronics Association (CEA) and sponsored by the NAHB Research Center reports that 43% of consumers agree that monitoring their electricity, water and gas consumption would help them use these resources more efficiently.

Among other trends in green technology to watch, Erdmann cited the benefits of smart grid integration that enables residents to control their electrical usage for heating, air conditioning and hot water and reduce their consumption during peak demand periods.

Sensors in an elderly home owner’s bedroom floor can send information to a monitor confirming that the person successfully got out of bed for the day or took their medication.

By reducing the need for on-site supervision, this technology enables the elderly to dwell in their homes longer, he said. At the cost of a few thousand dollars, the elderly resident profits by being able to avoid moving to a nursing home, a far more expensive and personally less welcome proposition than aging in place.

Home security, an issue that is on the minds of significant segments of the population, can also be well-served by sensors, and 42% of consumers in the CEA report say they would be willing to pay more for devices such as home security systems that allow them to monitor their home wirelessly.

In the CEA study, 34% of consumers said they would derive peace of mind from being able to lock their home’s doors and windows from a computer or wireless device.

With the cost of driving to a job climbing with the upward trend in gasoline prices, Erdmann also noted the growing value of Tele-Presence systems that can give telecommuters face time with their co-workers or plug them into business meetings.

Panelists at the Green Building Conference agreed that consumers do need some encouragement and education about the value of adopting green technologies and that they are most receptive to products related to energy efficiency.

“Clients are looking how to get lower energy costs,” said Ken Adams, division manager for Magleby Construction in Pleasant Grove, Utah.

Existing home owners “may not have changed out mechanical systems,” Adams said, “and they are looking for tax credits and rebates” available from the government, utilities and manufacturers.

There is definitely a growing market for energy-efficient retrofits, he indicated, and the prospect of reducing monthly costs by 60% to 70% “is what starts them down the path,” he said.

The role for electronic systems contractors in the remodeling sector, Adams said, “is to educate consumers about what will provide them with the most benefit. They know there are some tax credits out there, but not much else.”

Paul Magleby, chairman and founder of Magleby Companies, sees his job as “educating clients on what will make the structure perform better.”

Updating HVAC and hot water systems and making the thermal envelope efficient are at the top of the list of possible jobs because they get the most bang for the buck, Magleby said.

Magleby said that in his experience “you can get your customers to invest in these things.”

But convincing new home buyers to pay for green technologies can be challenging, Adams added, when it becomes a question of expense and whether paying a premium for green will leave enough in the buyer’s budget to include the expensive countertops that are high on the priority list.

Unfortunately, how an appliance looks can be more important to the home owner or buyer than how well it performs, he said, although there are some efficient models that do now come in stainless steel finishes.

There are some technological advances in smart appliances, including Internet connectivity, that do have the ability to wow the customer, Erdmann added, including a refrigerator equipped with a bar code scanner that lets it keep track of what is in the refrigerator and know what can be prepared with those ingredients.

There are also self-monitoring appliances with the ability to report they are using more energy than they should be, an indication that there may be a malfunction that needs to be checked.

When working with an ESC, Erdmann said that builders and remodelers should treat them like any other contractor, and that ESCs should be brought in for the design phase of the project.

“A good ESC understands the flow of the project,” he said, has “management expertise,” a good working relationship with the manufacturers of the products he is recommending and should be available on the job “to educate the buyer about the value proposition.”

The standard covers lot design, resource, energy and water efficiency; indoor environment quality; and owner education.

Currently the first and only ANSI-approved green building rating system, the National Green Building Standard is the benchmark for green homes.

More Than 5,400 People Have Earned Their Certified Green Professional (CGP) Designation

Earning the CGP demonstrates to clients and peers your commitment to the best and latest in green building practices and techniques. More than 5,400 people have earned the CGP designation to date.

OSHA Refuses to Extend Deadline for Fall Protection Guidelines

The Occupational Safety and Health Administration is holding fast to its June 16 deadline for home builders and remodelers to begin providing conventional fall protection systems — such as personal fall arrest systems, safety nets or guardrails — when any employees are working six feet or more off the ground.

The agency’s decision followed a May 26 meeting with OSHA officials at which NAHB leaders reiterated their concern that more training is needed so that builders and trade contractors understand what they are required to do in order to comply with OSHA's fall protection regulation.

While fall protection has always been required in residential construction, OSHA’s Interim Fall Protection Compliance Guidelines allowed builders the option of using alternative fall protection procedures without first showing they were infeasible or presented a greater hazard to workers, and without a written fall protection plan.

As of mid-June, employers will be required to provide conventional fall protection systems when any worker is exposed to a fall hazard when working six feet or more above the next lower level.

However, the new Compliance Guidance for Residential Construction will also require employers to follow OSHA’s Subpart M Fall Protection Regulation, which does allow the flexibility of using a written fall protection plan and alternative fall protection procedures when conventional systems are either infeasible or using them creates a greater hazard.

On May 26, NAHB First Vice Chair Barry Rutenberg, Construction Safety and Health Committee Chair Dean Mon and NAHB staff met with Assistant Secretary of Labor for OSHA David Michaels and other high-level OSHA officials to discuss their concerns and request an extension.

The agency refused, citing the fact that 15 states had never adopted the interim guidelines and that OSHA has included sufficient flexibility to allow for the use of alternative fall protection measures in the Subpart M Fall Protection Regulation.

Michaels also encouraged NAHB members to use OSHA’s On-site Consultation program, which enables employers to investigate potential hazards at their work sites and even qualify for a one-year exemption from routine OSHA inspections. These on-site consultation services are separate from enforcement and do not result in penalties or citations.

Among the significant changes resulting from the withdrawal of OSHA’s Interim Fall Protection Compliance Guidelines:

Many states operate their own state occupational safety and health plans and may have adopted fall protection standards that are different from Federal OSHA. If you live in a state with an approved occupational safety and health plan, contact your local administrator or home builders association for further information on the standards applicable in your state.

For more information about the residential fall protection requirements, visit www.nahb.org/fallprotection; or email Rob Matuga, or call him at 800-368-5242 x8507.

The 30-minute “Fall Protection Video, English-Spanish” can be used by builders to train workers to use safe work practices that eliminate fall hazards and comply with OSHA fall-protection standards.

The “NAHB-OSHA Fall Protection Handbook, English-Spanish” provides guidelines for creating a written fall-protection plan and identifying safe work practices that can prevent costly accidents and injuries. Written with clear text, photographs and illustrations, the book serves as a user-friendly resource for promoting safety on any job site.

OSHA Allows Alternative Written Fall Protection Plan When Certain Requirements Are Met

Under the Occupational Safety and Health Administration’s Subpart M Fall Protection Regulation, which goes into effect on June 16, employers can use their own fall protection plan for residential construction activities, provided that certain requirements are met.

Under an exception provided by OSHA, a fall protection plan for construction work that meets the requirements of 1926.502(k) can be used when the employer can demonstrate that the conventional systems — such as personal fall arrest systems, guardrails or safety nets — required by the agency are either infeasible or likely to create a greater hazard for workers.

The burden of proof is on employers to establish the reasons why using conventional fall protection systems is infeasible or creates a greater hazard.

These reasons must be documented in the written fall protection plan, and alternative methods of protection must be established for each circumstance where conventional systems are not used.

OSHA has a sample fall protection plan in Appendix E of Subpart M that provides guidance to employers on the type of information that is required to be discussed in fall protection plans.

Legal Action Grants Approved to Challenge Fees, Endangered Species Regulations

Two state home builders associations recently received grant approval from the NAHB Executive Board for assistance in challenging overreaching endangered species regulations and excessive building permitting fees.

The grants from the NAHB Legal Action Fund were awarded based on recommendations from the NAHB Legal Action Committee, which met on May 19 during the NAHB board of directors meeting in Washington, D.C., to consider several applications for funding and friend-of-the-court assistance.

NAHB created the fund to ease the burden on members and HBAs that want to pursue expensive and time-consuming cases involving nationally significant issues or legal matters commonly faced by builders and developers.

The cases approved by the Executive Board last month indicate that HBAs still face onerous state and local regulations that create unnecessary roadblocks to housing in already challenging times.

The committee reviews Legal Action Fund applications three times a year in conjunction with NAHB board of directors meetings.

Applications for consideration at the fall board of directors meeting in Milwaukee held on Sept. 7-10 are now available and due by Thursday, Aug. 25. Click here to download applications and guidelines from the members-only pages of the NAHB website.

For more information on the grant program, email Christopher Whitcomb at NAHB, or call him at 800-368-5242 x8329.

Maryland Builder Robert Mitchell Named Chairman of the National Housing Endowment

During a meeting of the National Housing Endowment’s board of trustees on May 19, Robert Mitchell, the 2000 NAHB president and a home builder from suburban Maryland, was named the endowment's chairman.

He succeeds Gary Garczynski, the 2002 NAHB president, who served as the endowment's chairman during the past five years.

“It is an honor to serve as chairman of the philanthropic arm of NAHB,” said Mitchell. “I hope to continue the progress we have made with initiatives like the HELP ― Homebuilding Education Leadership Program, and continue to invest in the future of housing”.

Mitchell, the co-founder and owner of Mitchell & Best headquartered in Rockville, Md., has served as a member of the board of trustees since 2005. He served three terms as president of the Maryland National Capital Building Industry Association, which also named him its builder of the year for 13 years, and two terms as president of the Home Builders Association of Maryland. NAHB inducted Mitchell into the National Housing Hall of Fame in 2006.

Gary Garczynski

“I am so grateful to be able to turn over the reins of the endowment to my good friend and fellow builder, Bob Mitchell,” said Garczynski. “I know Bob will do an outstanding job as chairman, and his leadership will guide the endowment through these challenging times.”

During his tenure as endowment chairman, Garczynski oversaw the establishment and growth of the endowment’s signature grant initiative, the HELP program. Under the program, two- and four-year colleges and universities are awarded up to $100,000 to bolster or establish residential construction programs. Since its inception in 2006, 19 schools have been awarded HELP grants totaling more than $1.2 million.

“Education is my passion, and I have been honored to work with my fellow members of the board to encourage the best and brightest to pursue careers in home building, and to invest in the next generation of leaders of this industry,” Garczynski said.

NAHB Presidents Conine, Rayburn, Wilson Among Five Inducted Into Housing Hall of Fame

Five housing industry leaders, including three former NAHB presidents and the resort developer of Hilton Head Island, S.C., were inducted into the National Housing Hall of Fame earlier this month.

The induction ceremony, held during NAHB's board of directors meeting in Washington, D.C., recognized the honorees' dedication to advancing housing opportunities for all Americans.

"The honorees are all innovative visionaries whose spirit, ingenuity and dedication to advancing housing opportunities for all Americans has preserved the American Dream of homeownership for generations to come," said 2011 NAHB Chairman Bob Nielsen, a home builder from Reno, Nev.

The National Housing Hall of Fame was established in 1976 and honors nearly 200 builders, developers, architects, financiers, land planners and government administrators who have made significant contributions to the housing industry. Hall of Fame honorees are selected by the National Housing Center Board of Governors.

Active Associate Member in Seattle Builds Relationships, Garners New Business

Gateway is the area distributor for Viking ranges and other high-end appliances and the company has been an active member of the HBA for more than a decade primarily because the association’s custom home builders and remodelers can influence their clients’ choices of high-end appliances.

Tory Casey, Gateway’s marketing coordinator, helps builders and remodelers understand how Viking products work and why they’re worth the cost during demonstrations when the company hosts HBA meetings in its showroom.

“We’d cook food at these meetings and demonstrate our products,” said Casey. “And the HBA follows up with a keynote speaker on an industry-related topic.”

It’s a win-win for all involved. Everyone has a good time, Casey said, and members receive some hands-on experience with the appliances. Gateway also offers a builder incentive program that rewards its regular clients.

Gateway sponsors the HBA’s annual charity event and auction and participates in its tabletop nights and other association events.

“The remodelers and builders are really open to interacting with us,” said Casey. Julie Applegate, the HBA’s sales and marketing manager, “makes sure we get to meet the members that we want to meet. And the builders are happy to see us and learn about our products.”

“Last year, we got to know some new builders, and that has resulted in our working with two of them on projects this year,” Casey said.

Be Productive With Lightweight Slate 500 Tablet PC From HP

The hard-working, easy-to-tote HP Slate 500 Tablet PC can keep members in the office or on the job site connected to their email, the Internetand familiar Windows applications — including Word documents, presentations, spreadsheets and more.

At just 1.5 pounds before add-ons, this full-featured performer enables members to work intuitively.

For maximum workspace flexibility, rest the HP Slate in its docking station and gain two additional USB ports to easily connect accessories, such as a keyboard, mouse and printer. An SD card can be inserted to quickly and easily import photos or other files.

For more information, or to order, call 888-202-4488 and mention NAHB; or visit www.hp.com/go/nahb.

Not all features are available in all editions of Windows 7. The system may require upgraded and/or separately purchased hardware to take full advantage of Windows 7 functionality. See www.microsoft.com/windows/windows-7/ for details.

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.

NAHB Calendar of Events

See the variety of professional development offerings available through NAHB and its local associations in this brochure.

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Education Calendar

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Maryland Builder Robert Mitchell Named Chairman of the National Housing Endowment

NAHB Presidents Conine, Rayburn, Wilson Among Five Inducted Into Housing Hall of Fame

Active Associate Member in Seattle Builds Relationships, Garners New Business

Be Productive With Lightweight Slate 500 Tablet PC From HP

NAHB Calendar of Events