Monday Morning Briefing Letter - 06/02/2008 (Plain Text Version)

By Sandy Dunn, NAHB President and
Jerry Howard, NAHB Executive VP and CEO

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The Federal Housing Finance Regulatory Act of 2008,

passed by the Senate Banking Committee on May 20, is part of a package of housing-related legislation that's now in play in Congress.

Approved by the committee with wide bipartisan support, this latest bill adds further momentum to NAHB's advocacy efforts in support of a comprehensive housing stimulus. It specifically focuses on reform of the housing-related GSEs (Fannie Mae, Freddie Mac and the Federal Home Loan Banks) and expansion of the Federal Housing Administration.

Senate Banking Committee Chairman Chris Dodd (D-CT) was able to move the bill foward on May 20 after reaching an agreement with Ranking Member Richard Shelby (R-AL) that taxpayers would not be liable if new loans insured by the FHA to help struggling home owners went into default. Instead, funds from a new GSE affordable housing fund created by the legislation would be temporarily diverted to compensate the FHA for costs of the new foreclosure program. Importantly, there is a strong indication that the White House will not attempt to block this arrangement. Going forward, NAHB continues to meet with the tax staffs from the House Ways and Means Committee and Senate Finance Committee to push for the best overall package of proposals, particularly as they relate to the home buyer tax credit. Read more in NBN Online, or contact Scott Meyer (x8144).

NAHB Member Benefit: With the House and Senate still faced with the task of reconciling their bills and sending a final package to the President's desk, NAHB advocacy staff members will continue to use all the tools necessary to urge Congress to deliver a bill to the President's desk by July 4. The Senate Banking Committee's most recent bipartisan action should help pave the way to that goal.

The Northeast should be the first to see signs of a housing upturn,

according to NAHB's newly available state and top 100 metro housing starts forecast for 2008-2009. As reported in last week's NBN Online, some parts of the country are expected to begin climbing out of the housing slump before the end of this year. While continuing turmoil in the credit markets and a weakening economy guarantee that housing markets will generally face "another challenging year in 2008 before any meaningful recovery takes hold in 2009," says the report, "the level of distress in local and regional housing markets is far from uniform." And, while the annual figures will be negative for most markets, the forecast does show a recovery in a number of areas by the fourth quarter of 2008.

The forecast says that the Northeast will be the first to emerge from the current housing correction, with several states turning the corner in the third quarter and most by the fourth. "While some of these markets experienced rapid price appreciation over the decade, the largest markets – New York, Boston and Philadelphia – avoided the extent of overbuilding that accompanied the price runups in other markets," the study explains. "The absence of large unsold inventories will help to mitigate the downward pressure on prices that will drag out the recovery process in markets that have similarly elevated housing prices but also large inventories." Next in line for a regional housing recovery is the South, with the notable exception of Florida. The West will be the slowest to recover, with exceptions to this gloomy outlook occurring in New Mexico, Colorado and Idaho. As for the Midwest, while the overall region is expected to move into a recovery mode next year, prospects are divided between the region's eastern industrial states, which are projected to experience further declines in the second half of 2008, and the more western farm states, which will show signs of improvement earlier due in part to flourishing agricultural commodities. Download a free sample of the report online, or contact Karel Leon (x8476) for more. [return to top]

National Membership Day results are in,

and the consensus is that this all-important event was truly a success thanks to the good work of many of our colleagues. At the end of the day on May 20, 6,939 new members and council members had joined our federation – a very encouraging number given today's uncertain economic climate. North Carolina and Florida, with 780 and 745 new members respectively, captured the number one and two spots in the state-by-state race to expand our membership rolls; Texas and Wisconsin weren't too far behind in third and fourth places. The best-performing local HBAs were the Helena (Montana) BIA with an impressive 266 new members, followed by the MBA of King and Snohomish Counties (Washington state) with 210. Read all the details about what happened on this fun day in the June 2 edition of NBN Online, or contact Gabrielle Taylor at x8351. [return to top]

Get free "National Homeownership Month" promotional materials

online from NAHB now that June has arrived. Free resources are available in the form of sample articles, radio and print advertisements, member education and consumer tools – all of which highlight the benefits of homeownership and provide positive messages about the home building industry. For example, the Guide to Celebrating National Homeownership Month in June gives you tips on how to celebrate the event with a news conference or homeownership fair. Members and HBAs are encouraged to distribute these materials, including ready-to-use articles, to their local news media, and to customize them using relevant local data and contact information. Please visit www.nahb.org/homeownershipmonth or contact Brooke Fishel at x8061. [return to top]

A 3.3% gain in new-home sales in April

was no cause for celebration following a dismal beginning to the spring home buying season. April's gain, reported by the U.S. Commerce Department on May 27, was on the heels of downward revisions to sales numbers reported for each of the previous three months, including a particularly large revision for March. The seasonally adjusted annual rate of new home sales in April was 526,000 units – exactly on par with the previously reported sales pace for March. However, on May 27, Commerce revised that March reading down to just 509,000 units, indicating an 11% retreat in home sales from February. The upshot of this is that there is still a major need for Congress to approve targeted policy stimulus in the form of a temporary tax credit for home buyers and other measures, and to do this as quickly as possible, noted NAHB Chief Economist David Seiders. The inventory of new homes for sale declined 2.4% in April to 456,000 units, which is a 10.6-month supply at the current sales pace. Read our press release or the government's report online. [return to top]

Housing affordability improved for a third straight quarter

at the beginning of 2008, according to results of the latest NAHB/Wells Fargo Housing Opportunity Index (HOI), released on May 20. The HOI rose to its highest level since mid-2004, indicating that just under 54% of all new and existing homes that sold during the first quarter were affordable to families earning the national median income of $61,500. The three factors behind this affordability gain included lower mortgage rates, a $2,500 rise in family income nationwide and lower house prices. The most affordable major housing market in the country was no surprise this time around – Indianapolis took the title for an 11th consecutive quarter. There, over 90% of all homes sold in the first quarter were affordable to families earning the area's median household income of $65,100. The least-affordable major metro was again Los Angeles-Long Beach-Glendale, CA, which has held this title for the last 14 consecutive quarters. Read more in our press release, or contact Gopal Ahluwalia (x8480) or Rose Quint (x8527) for details.

NAHB Member Benefit: NAHB's quarterly Housing Opportunity Index is a practical gauge of housing affordability that provides valuable perspective to builders and home buyers alike. Prior to the time that the HOI is released, NAHB contacts most HBA Executive Officers in an effort to help prepare them for the media attention that may be generated by the numbers being released in their market. This is one more way that NAHB works in tandem with its over 800 affiliated HBAs to get the right information about housing market conditions out to the local and national media. [return to top]

Conditions in the multifamily condominium market

eroded further in the first quarter of 2008, according to NAHB's latest Multifamily Condo Market Index, released on May 23. With a reading of 15.2, the index value for current market conditions was roughly half its 29.6 value from a year earlier. Meanwhile, the component gauging builders' expectations regarding market conditions in the next six months fell to 29.7 from 32.9 a year earlier. NAHB Chief Economist David Seiders noted that as condo development has slowed sharply, the heavy inventory overhang is being absorbed to some degree, with some units going to owner/buyers and others going into the rental market. "As mortgage credit once again flows to truly qualified prospective buyers," he said, "the market will slowly climb back into balance." Indeed, there is reason to believe that buyers are waiting in the wings, ready to buy once they think the market is approaching its bottom. The index value for traffic of prospective buyers hit its highest point since early 2006, which is the first time that the survey began asking participants to rate that market indicator. Read more results of the MCMI, including those from a "special questions" section on credit and lending matters, in our press release. Contact: Anne Marie Moriarty, x8350. [return to top]

Green Building news:

1. The National Green Building Conference - This recent event was a huge success, with over 1,500 attendees, 60 educational classes, 122 exhibits and 20 major sponsors making it the biggest such conference ever!

2. Certified Green Professional Designation - More than 550 NAHB members have now earned this title, with 41 of them honored in a special reception at the National Green Building Conference.

3. National Green Home Building Program - 345 professionals have completed the verifier training class to learn how to certify "green" homes under our new National Green Home Building program. Meanwhile, the first two houses to be certified under our national program have been completed in Indiana and Delaware, with 35 more homes awaiting certification.

4. Upcoming audio seminar - Three experts on various aspects of green building will conduct an hour-long audio seminar on the opportunities, challenges and benefits of green building from 2:00 - 3:00 p.m. EDT Wednesday, June 11. Get more information on the "Green as Good Business" seminar here.

5. National Housing Center - NAHB's headquarters building in Washington has earned its fourth ENERGY STAR designation for its energy-efficient design and operation. Read more in our press release.

For more information on NAHB's Green Building efforts, please contact Calli Schmidt, x8132. [return to top]

Host a fall protection training seminar

in your community in 2008 by registering your interest at www.nahb.org/fallprotectiontraining. These seminars, which were developed by NAHB and the NAHB Research Center, are aimed at builders, trade contractors, supervisors and workers, and funded under an OSHA grant. Each four-hour course teaches participants how to recognize common fall hazards on residential construction jobsites; how to use safe work practices to reduce the risk of injury; how to comply with applicable OSHA fall protection regulations; and how to develop a written fall protection plan. In addition, you'll learn how to: protect stairways, leading edges, window/wall openings and floors; safely construct rafters and install roof trusses and sheeting; and use a Personal Fall Arrest System (PFAS). Each participant receives a copy of the NAHB-OSHA Fall Protection Handbook and Video in English and Spanish. Training is conducted in English, and can be conducted in Spanish upon request. Contact Lindsay Cather (x8163) for more information.

NAHB Member Benefit: NAHB works closely with OSHA to help educate our members about worksite health and safety requirements, increase compliance with federal regulations and provide valuable assistance and materials to help our members keep themselves and their employees safe on the jobsite. [return to top]

Farewell to 1980 NAHB President Merrill Butler,

who passed away on May 19 at the age of 83 in Newport Beach, CA. A 1948 graduate of the University of Southern California and a World War II and Korean War combat veteran, Merrill built more than 12,000 single-family homes, townhouses, fourplexes, condos and apartments during his career in our industry. That career began in 1956 when he founded the Butler-Harbour Construction Co. in Anaheim. Later, in 1971, he formed Butler Housing Corp. and eventually expanded his repertoire to include building commercial and industrial projects. In 1982, he started another company, Merrill Butler & Associates, which provided real estate counseling and management services to financial institutions. He soon became a financial services industry executive, serving as president of the American Real Estate Group. He was also a director of Fannie Mae and served on the advisory committees of Freddie Mac and the Federal Home Loan Bank Board. He was named Builder of the Year by the BIA of Southern California in 1978 and earned numerous other honors over the course of his lifetime. Our hearts and prayers are with Merrill's family, including his wife, Barbara, and three grown children. Contact: Connie Douglas, x8408. [return to top]