| March 26, 2007 |
By Brian Catalde
NAHB President and
Jerry Howard
NAHB Executive VP and CEO |
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NAHB's regional forecast for housing starts in 2007 and 2008
provides a prospective roadmap for how the recovery in single-family housing production will likely progress, and when it can be expected to materialize in each section of the country.
 In general, says the newly published forecast, markets that recorded the strongest home production in the boom years of 2004 and 2005 will be the slowest to return to normal levels of activity, while those that were more restrained will be first to get back on track. The major exception to that rule is the Midwest, the hardest-hit section of the country, where weak local economies are not likely to see much improvement until next year as job and income growth slowly recover.
Produced by NAHB Economics and detailed in the March 19 edition of Nation's Building News Online, the full report provides regional snapshots for the South Atlantic, West South Central, East South Central, Mountain, Pacific, Northeast and Midwest regions. Below are just a few of the highlights:
- In the South Atlantic Division, the Atlanta and Durham, NC, metro areas are expected to return to positive growth early in 2007, while Asheville, Charlotte, Greensboro, Raleigh and Winston-Salem, NC, are expected to experience further but small declines throughout the year before turning positive in early 2008. Meanwhile, some of Florida's markets that boomed the most in recent times will be among the weakest nationally, experiencing further declines in housing production through 2007 before stabilizing in 2008.
- In the West South Central Division, NAHB's forecast calls for a quick return to steady growth in the first quarter of 2007, particularly in Dallas. In Austin, the decline in production is expected to bottom out by the end of 2007, at which time the market will begin recovering and return to moderate growth through 2008. San Antonio has already stabilized and is poised for steady growth this year and next.
- In the East South Central Division, including Alabama, Kentucky, Mississippi and Tennessee, single-family housing production was already above pre-boom levels as of the end of 2006.
- In the Mountain Division, NAHB is forecasting that the Phoenix and Las Vegas metro areas will show only moderate growth in housing production this year and next as they cope with the price, production and investor excesses that have prevailed in their areas.
- In the Pacific Division, NAHB is calling for strong gains in single-family starts throughout 2007 in Los Angeles, San Diego and San Francisco, with these gains slowing somewhat in 2008. Riverside and Sacramento, meanwhile, will have moderate and steady growth over the next two years.
- In the Northeast Region, NAHB's forecast calls for a quick recovery in Boston and New York and a return to more normal levels of production based on the fundamental health of their underlying economies.
- And in the Midwest, Minneapolis is expected to see its housing market start growing again early this year and continuing through 2008. NAHB is also forecasting that Chicago, St. Louis and Kansas City will stabilize throughout the year before returning to growth in 2008, based on an improvement in local economic conditions. Meanwhile, the Detroit area is in for continued deterioration this year before turning positive in 2008.
For the full report, including downloadable Excel tables of total single-family and multifamily housing starts by regions and states, click here (this link available to HousingEconomics.com subscribers). For a free preview of the report, click here. Contact Karel Leon (x8476).
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Builder concern about problems in the subprime mortgage arena
contributed to a decline in the NAHB/Wells Fargo Housing Market Index (HMI), a key gauge of builder sentiment released on March 19. After having risen steadily since last September, the HMI fell three points to 36 this month from a downwardly revised 39 reading in February. While builders appear uncertain about the consequences of tightening lending standards for their home sales down the line, and some are already seeing effects of the subprime shakeout on current sales activity, the fundamentals of the market remain relatively strong. Those include a favorable interest-rate structure, solid growth in employment and household income, lower energy prices and improving affordability in much of the single-family market due to price cuts and builder sales incentives. See our press release and the HMI tables online, or contact Gopal Ahluwalia (x8480) for more information.
NAHB Member Benefit: NAHB's economic surveys and analysis help our members achieve a better understanding of current market trends and where they are headed, while our media outreach in this regard helps to firmly establish NAHB as the credible source of information on the housing industry nationwide. This credibility with the media ensures that accurate data on the housing market is transmitted to potential home buyers and the public at large, thereby discounting sensationalized accounts of market conditions that may affect your client's decision to purchase a new home.
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A 9% gain in housing starts this February
only partially offset the 14.3% drop that was recorded in the previous month, while a 2.5% decline in building permits provided a perhaps more representative gauge of what's going on in today's market. Overall housing starts hit a seasonally adjusted annual rate of 1.525 million units for the month, which was off by 28.5% from a year earlier. A less volatile measure of housing construction activity, building permits were issued at a seasonally adjusted annual rate of 1.53 million units. NAHB Chief Economist David Seiders said weather was a definite factor in the pace of February housing starts, explaining that in the South and West, unusually good weather helped builders begin construction of many single-family homes that had been sold and permitted earlier, while in the Northeast and Midwest, unusually bad weather held down building activity. Read NAHB's press release or check out the official government report online. Contact Paul Lopez (x8409) for help dealing with media inquiries.
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An advancement in the immigration debate
was made this week when Reps. Luis V. Gutierrez (D-IL) and Jeff Flake (R-AZ) introduced the first major bill in the current Congress aimed at updating the nation's imigration and border security laws. H.R. 1645, the Security Through Regularized Immigration and a Vibrant Economy (STRIVE) Act of 2007, would enhance the nation's border safety, create a new employee verification system and establish a new visa program to manage the future flow of immigrants into the United States. NAHB is currently reviewing the language in this legislation, and will be working with the bill's proponents to achieve appropriate reforms that will strengthen our economy and protect our borders while also establishing a common-sense path for foreign workers to earn the right to apply for permanent legal status. Get more details in the March 26 edition of NBN Online, or contact Jenna Hamilton, x8407.
NAHB Member Benefit: Realizing that more than 20% of the building industry's workforce is foreign-born, NAHB is trying to ensure an adequate supply of workers for our members while supporting comprehensive immigration reform that will make our country safer.
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Expanding homeownership opportunities for the Latino community
 was the focus of a well-attended speech that California builder and NAHB member Ray Fernandez gave at the National Hispanic Leadership Summit in Washington, DC this past week. Sen. Kay Bailey Hutchison (R-TX) sponsored the forum, in which both she and fellow Senator John Cornyn (R-TX) participated. Noting that only 27% of his fellow Latinos can afford to purchase a house in his home base of San Bernardino County, Ray cited statistics from the Tomas Rivera Policy Institute reporting that a $5,000 increase in the price of a home prevents 44,000 Hispanic families in the Golden State from qualifying for a mortgage. "As we talk about how to make housing affordable, the key subjects are overly burdensome restrictions on land and anti-growth activism," Ray said. "Yet there is hope. NAHB fights every day for the cause of housing affordability by knocking down the barriers to housing and advocating for programs that make housing available and affordable." He mentioned efforts by NAHB to advance federal legislation that would revitalize the Federal Housing Administration as well as NAHB's newly developed Sed de Saber-Construction Edition learning program aimed at teaching construction workers English proficiency as ways in which the nation's home builders are helping Latinos nationwide. Read more about Ray's speech in the March 26 edition of NBN Online, or contact Jim Tobin at x8258.
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Dial in to a free audio seminar on storm water compliance issues
 that NAHB is hosting exclusively for our members. The event takes place May 23, 2007 — but you must register by May 18 to participate. Called 60 Minutes to Storm Water Permit Compliance, it's being offered by the NAHB University of Housing, with four expert speakers lined up to explain things and answer your questions. Introducing and moderating the program will be NAHB Director of Water and Wetlands Policy Marolyn Parson. Also appearing will be Tom Ward, NAHB's ASVP of Litigation, as well as Johnny Combs, president of Paradigm Engineering, a leading authority on storm water management for businesses. Rounding out the panel will be Everett Spencer, the EPA Inspector from Region 6, who will describe the inspection process from his agency's perspective and participate in a discussion of strategies that builders can follow when an inspector arrives on site. Get more information from Marolyn Parson (x8157), and remember, register online no later than May 18!
NAHB Member Benefit: This free seminar is a clear benefit of NAHB membership, and will help you understand the regulations that can lead to fines and penalties that cost you time and money. It's just another example of how NAHB strives to provide the kind of education and resources that can help your business thrive.
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Kicking off the "Housing America 2007" campaign
at the National Press Club on March 21, NAHB joined with a dozen other influential groups to promote the cause of affordable housing and release the results of an in-depth Zogby poll of personal attitudes about national priorities. Our coalition for this effort includes (in addition to NAHB), the National Association of Housing and Redevelopment Officials, the Housing Assistance Council, the American Federation of State, County and Municipal Employees, the Local Initiatives Support Corp., the Mortgage Bankers Association, the National Association of Counties, the National Association of Realtors, the National Council of State Housing Agencies, the National Housing Conference, the National League of Cities, the National Low Income Housing Coalition and the U.S. Conference of Mayors. Highlights of the poll we released included the fact that 90% of respondents said a decent, affordable place to live is either their number one priority or a high priority, while 69% said they would be more likely to select a presidential candidate who articulated his or her detailed plan for providing affordable housing. Also, we found that Americans are more likely to feel the country is on the wrong track toward achieving the goal of providing affordable housing for its citizens. Read more in our press release.
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Check out the latest edition of NAHB HouseKeys,
our free consumer e-newsletter that's quickly gaining popularity. HBAs across the country have strongly embraced this new online publication, using its content in their own newsletters and brochures, distributing fliers for it at home shows and linking to the subscription page from their Web sites. It’s a great way for HBAs and members to connect directly with consumers. In this month’s issue, Kenneth R. Harney, an award-winning, nationally syndicated real estate columnist, gives consumers searching for a new home some sound advice. Also in this issue, consumers can learn which simple household products can make their homes more environmentally friendly, and how builders are bringing "green" to the mainstream. There's also advice on choosing a builder, an insider's peek at the International Builders’ Show, ways to reduce your heating and cooling costs and get tax credits, and much more. Take a look at the latest NAHB HouseKeys here.
NAHB Member Benefit: HBAs are invited to share this issue of NAHB HouseKeys with their e-mail list of consumers. Further, HBAs are invited to use non-bylined content in NAHB HouseKeys to repurpose and customize for their own consumer outreach projects, including their association Web site, newsletter or magazine. We also will provide you with a graphic that you can post on your own web site or print product to promote NAHB HouseKeys as a free benefit for consumers.To subscribe or view back issues, visit www.nahb.org/housekeys. For more information on leveraging this free resource with your consumers, contact Niki Clark at nclark@nahb.com.
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