June 13, 2011
Monday Morning Briefing
NAHB Survey Confirms Value of Homeownership to Voters

Results of a major NAHB-commissioned survey clearly show the high priority that Americans continue to place on homeownership and housing choice, even amidst the turmoil in today's housing market. 

The survey, which polled 2,000 likely 2012 voters during the week of May 3-9, was conducted by two of the most highly regarded polling firms in the country. Initial findings were officially released in an NAHB media teleconference that was held on June 7, with further details set for release within the next few days — in fact, a special edition of Nation's Building News to be published on Tuesday, June 14, will contain details from the full array of findings. But the bottom line is this: Americans see beyond the immediate housing market to the enduring value of homeownership, with an overwhelming 75% of those surveyed saying that owning a home is worth the risk of the fluctuations in the market and 95% of current home owners saying they are happy with their decision to purchase a home. Meanwhile, almost three-quarters of those who do not currently own a home said that homeownership is one of their goals. And among younger voters who are most likely to be in the market for a home in the next few years, the percentages are even higher.


Among the other survey results:

  • Homeownership and a retirement savings program are considered by voters to be their best investments.
  • 80% of home owners would advise a close friend or family member just starting out to buy a home.
  • Saving for a downpayment and closing costs is the biggest barrier to homeownership.
  • Americans believe that owning their own home is as important as being successful at their job or being able to pay for a family member's education.

These are powerful findings that confirm just how out of touch some policymakers in Washington have become with the American public in their pursuit of measures that would make it much more difficult for the average consumer to purchase a home. And, they are exactly what we need to counter these measures in the halls of Congress, in the Administration and in the media. Stay tuned for further details in this report, Nation's Building News, and other communications channels. In the meantime, read our press release, check out the survey results for yourself at, and view favorable coverage of our poll by Charlie Cook in the National Journal and on The Wall Street Journal's blog. Contact: Blake Smith (800-368-5242, x8583)  

OSHA Announces 90-Day Phase-In for Fall Protection Regulations

In a June 8 letter to NAHB, Dr. David Michaels, Assistant Secretary of Labor for OSHA, announced a three month phase-in period to allow residential construction companies additional time to come into compliance with the Agency’s new directive Compliance Guidance for Residential Construction (STD 03-11-002). This decision is in response to a meeting between NAHB and OSHA’s leadership on May 26, during which NAHB First Vice Chairman Barry Rutenberg and Dean Mon, Chairman of NAHB’s Construction Safety and Health Committee, argued that builders need additional time to fully understand the steps that must be taken and to properly plan for the fall protection change. NAHB also stressed there is a continued need for more fall protection training and compliance assistance for residential construction employers.


OSHA's field staff have now been instructed that for the first three months in which the new directive is in effect, the agency will not issue fall protection citations to home builders who are using the protective measures in the old residential construction fall protection directive (STD 03-00-001).  Instead, where necessary, OSHA will issue a hazard alert letter informing the builder of the feasible methods that can be used to comply with OSHA’s fall protection standard or the need for a written fall protection plan to be implemented. If the builder’s practices do not meet the minimum requirements set in the old directive — or if a company fails to implement the fall protection measures outlined in a hazard alert letter and during a subsequent inspection OSHA should find violations involving the same hazards — the agency will at that time issue a citation.

The three month phase-in period runs from June 16 to September 15, 2011. Read OSHA's official announcement on the agency's website, and view the letter sent to NAHB by Dr. Michaels here. Contact: Rob Matuga (800-368-5242, x8507) 

Custom Builder Testifies on Energy Efficiency Legislation

Custom home builder and NAHB member Tony Crasi testified before the Senate Energy and Natural Resources Committee on June 9 to urge that, as lawmakers consider a suite of energy efficiency bills, they take into account the differences in energy savings between the newest, highest-performing homes and older, less-efficient homes that comprise the vast majority of the nation’s housing stock. Speaking on behalf of the nation's home builders regarding The Energy Savings and Industrial Competitiveness Act of 2011 (S. 1000), the Akron, Ohio-based builder advocated for "an effective retrofit plan for older, less-efficient housing that allows builders and remodelers to create the benefits of energy efficiency for all housing."  


Tony pointed out that over the past two decades, NAHB has played a leading role in developing, promoting and encouraging the growth of residential green and energy-efficient construction — and that the introduction of modern energy codes in the early 1990s has significantly improved the efficiency of new homes. NAHB fully supports efforts to incentivize retrofitting the oldest, least-efficient housing and believes a national energy policy priority must include provisions that seek to save the energy lost in older homes and buildings. “Without meaningful incentives to retrofit the millions of less-efficient existing homes, true energy savings in the residential sector will never materialize,” Tony said. "NAHB encourages a national policy that directs limited federal resources to the biggest source of energy loss in the real estate sector: older homes and buildings.” Read our press release for more, or contact Elizabeth Odina (800-368-5242, x8570)

Regulators Extend Comment Period on QRM Rules

In previous weeks, we've reported on proposed risk retention rules for home mortgages. These rules, which were issued by six federal agencies earlier this year in response to requirements under the Dodd-Frank Act, require financial services companies to retain at least 5% of the credit risk of the assets underlying their securities issues, with an exemption for "Qualified Residential Mortgages" (QRMs) that, among other things, require a 20% down payment. NAHB has strongly weighed in on this matter as part of a broader coalition of industry and consumer groups and in testimony before Congress, urging that regulators come up with a fairer QRM definition that does not unduly impact credit-qualified home buyers. With so many groups registering significant concern about the QRM rules, the federal agencies announced this week that they are extending the comment period for their proposal. Initially set to end on June 10, the comment period will now continue until Aug. 1. In their announcement, the agencies cited "the complexity of the rulemaking" and the need "to allow interested persons additional time to analyze the proposed rules." NAHB is currently drafting comments for submission ahead of the new deadline. Read more on the QRM rules here. Contact: Steve Linville (800-368-5242, x8597)

Harvard Releases State of the Nation's Housing Report for 2011

The Joint Center for Housing Studies at Harvard University officially released its State of the Nation's Housing 2011 report on June 6. This excellent resource for data on the housing market was in part supported by NAHB's National Housing Endowment, and endowment chairman Bob Mitchell, a former president of NAHB, was on hand for the official release. While the report notes the ongoing weakness in housing markets and home prices, it also notes that foreclosure activity was concentrated in just 10% of U.S. neighborhoods last year. Also, it highlights the rental housing sector as a bright spot in which consumer demand is on the rise. Specifically, the report indicates that growth in both younger and older households over the coming decade should continue to lift the demand for rental hosuing as well as for smaller homes. And in the Joint Center's press release announcing the report's publication, Managing Director Eric Belsky pointed out that "While the sharp declines in both home prices and interest rates have left homes in many places more affordable than they have been in decades, stubbornly high unemployment and tightened lending standards have limited the ability of many first-time buyers to capitalize on the situation." See the next edition of Nation's Building News for further coverage of the State of the Nation's Housing report, or download the report for yourself at this link.   

Index Shows Continuing Improvement in Multifamily Market

NAHB's latest Multifamily Production Index (MPI), which measures developer sentiment in the multifamily arena on a quarterly basis, rose for a third consecutive time in this year's first quarter, according to results issued June 9.  The index, which operates on a scale of 0 to 100, increased from 40.8 in the fourth quarter of 2010 to 41.7 in the first three months of 2011. The index provides a composite measure of three key elements of the multifamily housing market: construction of low-rent units, construction of market-rate rentals, and construction of “for sale” units. The index and all of its components are scaled so that any number over 50 indicates that more respondents report conditions are improving than report conditions are getting worse. According to NAHB Chief Economist David Crowe, "Multifamily continues to be one of the brighter spots in housing. Not only is the overall index on the rise, the market-rate rental component has improved dramatically. In the first quarter, the market-rate rental component was 60.5, the highest level in more than five years.” That said, the market still faces significant challenges, said the chief economist. “There is considerable pent-up demand, but the ongoing crisis in funding for new construction means that developers are limited in their ability to meet that demand.” 

The Multifamily Vacancy Index (MVI), which measures the multifamily housing industry’s perception of vacancies, increased slightly from 33.3 in the fourth quarter of last year to 35.0 in the first quarter of 2011. With the MVI, lower numbers indicate fewer vacancies. According to Dr. Crowe, "Even though we saw a slight increase in the vacancy index in the first quarter, the long-term trend is downward. Given the demographics of demand, we expect that trend to continue.” For data tables on the MPI and MVI, visit View our press release here.

Proposed Requirements for Qualified Commercial Real Estate Loans

HUD and five other federal agencies have proposed a regulation that would set underwriting standards for qualified commercial real estate (QCRE) loans, which include multifamily loans. Similar to the single-family qualified residential mortgage or QRM, meeting this standard would exempt issuers of securities backed by CRE loans from a requirement in the 2010 Dodd-Frank financial reform law that they retain 5% of the credit risk of each loan backing a security that does not meet the definition of QCRE. NAHB will submit comments on this proposal prior to the Aug. 1 deadline. For all of the requirements of a qualified CRE loan, click here

As with the proposed QRM, which would require a 20% downpayment on residential mortgages, the agencies have taken a very conservative approach to defining what constitutes a low-risk CRE loan. NAHB is concerned that few developers can achieve these underwriting standards, requiring issuers to retain 5% of the loan value for risk. While the cost to retain this risk is unknown, it could be passed along to the lender and/or borrowers, pushing up financing costs and resulting in higher rents.

The stringent underwriting requirements — well beyond what Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA) currently require — also include:

  • 1.7 debt service coverage (1.5 for existing properties with at least a two-year period of good performance)
  • 65% loan-to-value
  • Fixed interest rate or derivative equivalent to a fixed rate

Under the proposed rule, Fannie Mae and Freddie Mac would not be required to hold the additional 5% risk retention while they were under conservatorship or receivership. Also, loans insured or guaranteed by FHA, Rural Housing Service, Veterans Affairs and the Farm Credit Administration would be exempt, as would securities issued by Ginnie Mae and the Federal Agricultural Mortgage Corporation. The proposed rule also exempts loans/securities issued by states or any public instrumentality of a state. Here is a link to the proposed rule. For more information, contact Claudia Kedda (800-368-5242, x8352).  

NAHB Honors David Reznik With Daniel M. Grady Memorial Award

Congratulations are due for David Reznick, co-founder and chairman of the board of Reznick Group, P.C., who became the 2011 recipient of the Daniel M. Grady Memorial Award during NAHB's Spring Board Meeting week in late May. Presented annually to an NAHB member who best embodies the spirit and dedication of its namesake to quality affordable housing, and whose advocacy work with the association has made a difference to the housing industry, the award went to David for his more than 30 years of contributions and dedication to the cause of affordable housing. As founder of the Bethesda, Md.-based Reznick Group, P.C., he has led the firm's growth from one office to a top 20 CPA firm with offices throughout the country. Over the span of his career, David has provided direct services to a range of real estate clients, including developers, syndicators, and lending institutions. He is considered a trusted advisor on real estate policy issues and testified before the House of Representatives providing recommendations for how to restructure the Section 8 portfolio of FHA insured mortgages. He has also been a featured speaker in multiple national real estate industry seminars and affordable housing conferences. Read more about the Daniel M. Grady Award in the next edition of Nation's Building News. Pictured from left: Stillman Knight, David Reznick and NAHB Chairman Bob Nielsen. Photo by Herman Farrer.

Free Webinar on Green Home Technology Happens June 15

NAHB members are encouraged to check out a free webinar on "Green Home Technology: Lifestyle Products That Cut Costs for the Consumer” this June 15 at 2:00 p.m. ET. Builders will learn about trends in green home technology, how to help clients choose the right product mix, and the benefits that come from builder and Electronic Systems Contractor (ESC) partnerships. Presenters include Matt Belcher, CGP, founder of Belcher Homes and author of the book "Build Green and Save: Protecting the Earth and Your Bottom Line," as well as Dave Pedigo, Senior Director of Technology at the Custom Electronic Design & Installation Association (CEDIA).  To register, follow this link and enter the promotion code: 11HTAW (note, NAHB members must be logged in to the NAHB website with their password to receive the free pricing). Participants can receive one hour of continuing education credit for NAHB professional designations. View more webinars in the Design and Technology series here; for more information, contact Agustin Cruz (800-368-5242, x8472).

LENOX® Offers Free Speed Slot® Hole Saw to NAHB Members

We are excited to tell you about a great new promotional offer that benefits NAHB members. LENOX ® is offering to give a revolutionary new hole saw* to any NAHB builder, remodeler or contractor who wants one. All you have to do is visit [Note: you must be logged into NAHB's website with your username and password to access this page.] "There's no downside to this offer — so find out what a LENOX Speed Slot® Hole Saw can do by signing up for your free one today!   

*Offer is limited to one per address. For US and CAN residents only. Please allow 4-6 weeks for delivery. You must be actively employed as a professional contractor or skilled trade worker in the construction industry to quality for a free hole saw. Supplies are limited.  Must be over 18. NAHB will not share your email with LENOX unless you indicate otherwise.

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