Participating in a plenary session led by Governor Perdue on “Planning for the Future: Sustainable Economic Development in the States,” Catalde addressed the effects of the current credit issues on the housing market and discussed what governors can do to help.

Texas Governor Rick Perry, NAHB President Brian Catalde and Georgia Governor Sonny Perdue

Relating the credit issues to his own personal experience, Catalde commented on how the current credit crunch is affecting California. “Builders have seen hugely negative effects, especially on buyers’ ability to sell their existing homes in order to trade up to new homes. We’ve experienced a high degree of sales cancellations and are having only limited success in drawing buyers through ramped-up sales incentives.”

Catalde went on to remind governors that first and foremost, all housing markets are local, and dictated by local economic and job market conditions. He also stated that the current downswing was preceded by one of the biggest housing booms in history. California, Nevada, Florida and Arizona had the most super-heated housing markets in the boom period and are now experiencing the toughest market corrections.

Catalde encouraged governors to leverage their resources to address houding affordability through State Housing Finance Agencies, Low Income Housing Tax Credits, HOME funding, mortgage revenue bonds and down payment assistance. He also encouraged them to support some federal solutions.

On the federal level, Catalde emphasized the need for the Federal Reserve to cut interest rates and the need for Congress to take three basic steps toward easing the credit crunch:

• Enact FHA reform to allow the agency to insure more home loans for subprime borrowers.
• Adopt GSE reform that will strengthen regulatory oversight of Fannie Mae and Freddie Mac and permit them to purchase mortgages in high-cost markets.
• Enact legislation that eliminates taxes on mortgage debt forgiven as part of a loan workout.

Finally, Catalde reminded the Governors that it will take a highly coordinated solution – industry, bankers, the federal & local governments and other like-minded entities – working together to current issues facing housing affordability.

NAHB is a member of both the Republican and Democratic Governors Association.

For more information contact Brooke Ransom, Director of Industry Relations at 800-368-5242 x. 8584.
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