NAHB Chief Executive Officer
Builder confidence in the market for newly built, single-family homes improved three points to a 44 reading on the NAHB/Wells Fargo Housing Market Index (HMI) for May, released this Wednesday. The gain was from a downwardly revised 41 reading in April, and reflected improvement in all three index components. Specifically, the component gauging current sales conditions increased four points to 48, the component gauging sales expectations for the next six months edged up a single point to 53 – its highest level since February of 2007 -- and the component gauging traffic of prospective buyers gained three points to 33. In general, builders are noting an increased sense of urgency among potential buyers as a result of thinning inventories of homes for sale, continuing affordable mortgage rates and strengthening local economies. This is seen as an encouraging sign, even as concerns related to costs and supplies of building materials, lots and labor are rising in some markets. Commenting on the latest survey findings, NAHB Chief Economist David Crowe noted that, “While industry supply chains will take time to re-establish themselves following recession-related cutbacks, builders’ views of current sales conditions have improved and expectations for the future remain quite strong as consumers head back to the market in force." Drilling down to the regional picture, three-month moving averages of HMI scores didn't budge this time around for the Northeast, Midwest or South, which held unchanged at 37, 45 and 42, respectively. Only the West recorded a decline, of six points to 49 in May. For more info, view the HMI tables online or contact Rose Quint (800-368-5242 x8527).
Realizing our members' concerns about significant price hikes on a variety of building materials, NAHB has taken a number of recent steps to help ensure sufficient supplies -- including everything from lobbying for legislation to increase timber production on federal lands to reaching out to key U.S. and Canadian policymakers to urge that “there are no regulatory barriers or supply-chain interruptions that increase prices or impede availability” of building materials in the market. Meanwhile, understanding that it will take some time for supply chains to re-establish themselves and for supply and demand to move closer to equilibrium as the housing recovery continues, NAHB members may want to consider using price escalation language in contracts to limit the damage that unpredictable price hikes on materials can cause. With this in mind, we wanted to let you know that NAHB has sample price escalation language for our members' use. If you have questions about this language, contact David Jaffe (800-368-5242 x8317) or David Crump (x8491). And rest assured that your national association will continue to put a spotlight on issues concerning the availability and cost of building supplies, along with similar concerns about the supply of developable lots and skilled labor in some markets.
One of the most important days of the year for home builders and their associates is coming up fast, with NAHB's annual Legislative Conference scheduled for June 5 here in Washington, D.C. To ensure that our members are well prepared for their visits to lawmakers on Capitol Hill that day, NAHB is conducting a pre-Legislative Conference Issues Webinar at 2:00 p.m. EDT on Tuesday, May 21. This is a great chance to get up to speed on our legislative priorities and ask the NAHB Government Affairs staff any questions you may have ahead of time. Here's how to participate:
1. Make sure you have a computer with an Internet connection and a reliable phone line.
2. Before the meeting, go to http://admin.adobe.acrobat.com/common/help/en/support/meeting_test.htm to ensure that the related software will work on your computer.
3. When it’s time for the meeting, exit the other programs on your computer and go to: http://nahb.adobeconnect.com/legcon2013/.
4. Type your name in the Enter as Guest box, then click the Enter Room button.
5. You will be prompted to enter a telephone number for the system to call to connect you with the audio portion of the conference. If you use a switchboard, notify the operator that you will be receiving a call from the web conference so they can transfer it to you. The system cannot dial extensions or prompts.
6. Alternatively, If you want to participate via telephone only, dial 866-628-8629 when the meeting begins and when prompted, enter passcode 103329.
Please direct any questions about the 2013 Legislative Conference to Nick Gentile (800-368-5242 x8542).
A correction from an unsustainably high level of production on the volatile multifamily side was largely responsible for a 16.5% dip in nationwide housing starts to a seasonally adjusted annual rate of 853,000 units in April, according to data released this week by HUD and the U.S. Census Bureau. However, permits for new construction headed solidly higher in the month, with a particularly strong gain in multifamily issuance. NAHB Chief Economist David Crowe noted that, along with new permits, permits that had been issued but not yet used rose in April, which is a good indicator that the dip in building activity was likely a "temporary pause" due partly to unseasonably poor weather conditions. While single-family starts posted a modest, 2.1% decline to a seasonally adjusted annual rate of 610,000 units, multifamily starts posted a 38.9% decline to 243,000 units for the month. Combined starts activity was down 12.8% in the Northeast, 27.9% in the South and 6.2% in the West, but increased 10.9% in the Midwest. At the same time, permit issuance, which can be an indicator of future building activity, gained 14.3% to a seasonally adjusted annual rate of 1.02 million units -- that's the fastest pace since June of 2008. The increase reflected a 3% gain to 617,000 units on the single-family side and a 37.5% gain to 400,000 units on the multifamily side. Beyond that, three out of four regions posted double-digit permit gains in April: the Midwest had a 22.3% increase, the South a 16% gain and the West a 12.9% improvement. The Northeast posted a 2% decline. See NAHB's press release or the government's official report online. Contact: MondayMorningQuesitons@nahb.org.
Nationwide housing affordability held near historic highs in this year’s first quarter, according to the NAHB/Wells Fargo Housing Opportunity Index (HOI), released May 14. In all, 73.7% of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $64,400. This is down just slightly from the 74.9% of homes sold that were affordable to median-income earners in the final quarter of 2012. Commenting on the latest data, NAHB Chief Economist David Crowe noted that "HOI results for the beginning of 2013 are little changed from what they were at the end of 2012, with Ogden-Clearfield, Utah holding onto the title of the nation’s most affordable major housing market and San Francisco-San Mateo-Redwood City, Calif. retaining its position as the least affordable major market. The bottom line is that, for consumers who can qualify for a mortgage at today’s attractive rates, the majority of homes being sold remain within their grasp in markets nationwide.” This was the third consecutive quarter in which Ogden-Clearfield hit the top of the affordability chart for major markets. There, 93.4% of all new and existing homes sold in this year’s first quarter were affordable to families earning the area’s median income of $70,800 – essentially unchanged from the 93.7% of homes affordable to median-income earners at year-end 2012. Other major U.S. housing markets at the top of the affordability chart in the first quarter included Indianapolis-Carmel, Ind.; Lakeland-Winter Haven, Fla.; Youngstown-Warren-Boardman, Ohio-Pa.; and the two New York metros of Syracuse and Albany-Schenectady-Troy, which tied for fifth on the list. On the flip side of the coin, this was the second consecutive quarter in which the San Francisco-San Mateo-Redwood City, Calif. metro area hit the bottom of the affordability chart for major markets. There, just shy of 29% of homes sold in the first quarter were affordable to families earning the area’s median income of $102,000. Other major metros at the bottom of the affordability chart included New York-White Plains-Wayne, N.Y.-N.J., and the three California metros of Santa Ana-Anaheim-Irvine; Los Angeles-Long Beach-Glendale; and San Jose-Sunnyvale-Santa Clara, in that order. For more information, including listings of the most and least affordable smaller metro areas, please view our press release. You can also visit www.nahb.org/hoi for tables, historic data and details. Contact: Rose Quint (800-368-5242 x8527).
NAHB Member Matt Belcher, CGP, and other industry representatives from the High-Performance Building Congressional Caucus Coalition told congressional staffers about the advantages of the ICC 700 - National Green Building Standard (NGBS) and why many builders prefer it over other conventional green rating systems during a special luncheon event on Capitol Hill this week. The luncheon was one of several briefings and other events that were coordinated during High Performance Building Week as a way to raise awareness of the economic benefits of energy-efficient residential and commercial buildings. As a Missouri builder and a co-chair of NAHB's Energy and Green Building Subcommittee, Matt provided an overview of the green building landscape for single-family home building and design. His fellow presenter was Diana Kinlaw, regional project director for Balfour Beatty Communities, who spotlighted a specific example of what can be accomplished with energy-efficient upgrades by showcasing a Department of Defense project to retrofit homes for the military. ASHRAE Government Affairs Director Doug Read, chairman of the High-Performance Building Congressional Caucus Coalition, moderated the discussion. In all, this event was a valuable opportunity for our industry to expand congressional awareness of how home builders are increasingly and successfully implementing the National Green Building Standard to create quality, high-performance homes that save consumers money while contributing to economic growth and energy conservation. For more information, contact Billie Kaumaya (800-368-5242 x8570).
NAHB Resolutions Committee Chairman Jerry Carter reports that eight resolutions and two recommendations have thus far been submitted by NAHB directors for consideration at the upcoming Spring Board meeting. These include the following:
1. International Code Council - cdp ACCESS/Remote Voting Program -- asks NAHB to support the concept of the International Code Council (ICC) cdp ACCESS/Remote Voting Program and support its inclusion as a part of the ICC code development process provided that ten listed parameters are met .
2. Home Energy Labeling -- asks NAHB to support the voluntary use of energy labels and other efforts to encourage the disclosure of energy information to home owners and home buyers.
3. Flood Insurance: Biggert Waters Act -- asks NAHB to urge Congress to amend the Biggert-Waters Act, to direct the completion of an independent study on the National Flood Insurance Program and to urge FEMA to allow for sufficient review of new maps before adoption by local jurisdictions and to ensure that the participation of that jurisdiction in the NFIP will not be adversely affected during that interim.
4. Employment Verification -- asks NAHB to urge Congress to focus on the direct employer-employee relationship and to preserve the "knowing" liability standard.
5. Sustainability and Green Building Committee -- asks NAHB to establish a standing Committee on Sustainability and Green Building that would be tasked with providing member leadership and oversight to NAHB’s proactive participation in the broad range of sustainability and green-related issues by circulating a bylaws amendment to be considered at the 2013 Fall Board of Directors meeting.
6. Family/Medical Leave -- reaffirms NAHB's policy to preserve the Family and Medical Leave Act’s meaningful 50 employee/small business exemption and to oppose future legislative attempts to make provisions for mandated paid leave and/or expand employee coverage under the FMLA, and expands the policy to include relevant state workplace and employment laws.
7. Disaster Relief and Recovery -- reaffirms NAHB's policy in responding to disasters. Also asks NAHB to support improvements to the nation's readiness and capacity to respond to catastrophic disasters; to improve coordination among FEMA and all federal agencies involved in recovery and rebuilding efforts; and to ensure that sufficient federal disaster funds are authorized and provided expeditiously to affected areas.
8. Ensure Availability of AD&C Credit -- reaffirms NAHB's policy to urge Congress and federal banking regulators to provide support for AD&C lending at financial institutions and calls on Congress, regulatory agencies and participants in the housing finance system to facilitate development of nontraditional AD&C capital sources.
9. Support of FHA -- reaffirms NAHB's support for the Federal Housing Administration and provides a framework for evaluating proposals for further changes to FHA.
10. Sunset Review -- recommends that NAHB reaffirm 35 resolutions and recommendations that were adopted or reaffirmed in 2009.
Please view the chairman's memo at nahb.org/resolutionsinthepipeline for resolution sponsors, committees to which each resolution will be referred, links to related NAHB policies and relevant staff contacts. You can also download the full text of the resolutions by clicking here. For information about the resolutions process, contact Jessica Lynch (800-368-5242 x8401).
June is National Homeownership Month, and NAHB is offering an online toolkit to help HBAs and members take advantage of this important time of year. The kit has customizable resources for highlighting the benefits of homeownership, including print and web ads, a brief video, sample social media posts, talking points and radio spot scripts as well as articles of interest to current and potential home owners. To download these great materials, visit www.nahb.org/homeownershipmonth. You can start with the Guide to Celebrating National Homeownership Month, which provides ideas for events to engage the media, city and county officials, local home buyers and other members of the community in celebrating homeownership. And if you need more information about the toolkit or other NAHB public relations resources, simply contact Gwyn Donohue (800-368-5242,x8447).
The next edition of NAHB's Washington Update is due out on Tuesday, May 21, and if you're interested in knowing how immigration reform legislation now being debated in Congress will affect your business and what NAHB is doing about it, you should definitely give it a read. Among other things, you'll be apprised of an important congressional roundtable discussion in which NAHB Chairman Rick Judson participated this week regarding ways to improve the E-Verify system. You'll also get the very latest on NAHB's efforts to resolve the AD&C credit crunch that is slowing the housing recovery, and get a better idea of just how your NAHB membership dollar is being put to work for you. Readership of this e-newsletter has expanded considerably since we re-launched it with a much-improved format last November, meaning that more of our members are being kept up to date on key industry issues and how NAHB's efforts are saving you money every day of the week! Your contact for information on this important report is Michael Strauss (800-368-5242 x8252).
This is just a reminder that NAHB offices will be closed in celebration of the federal Memorial Day holiday on Monday, May 27. Meanwhile, the Monday Morning Briefing will skip a week, returning on Monday, June 3, just ahead of NAHB's Spring Board of Directors Meeting. Until then, the NAHB leadership would like to wish everyone a pleasant, safe and fun holiday weekend!