| March 3, 2008 |
By Sandy Dunn
NAHB President and
Jerry Howard
NAHB Executive VP and CEO |
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Calling on Congress to do more
to jump-start housing and stimulate the economy, NAHB Chief Economist David Seiders testified before the Senate Finance Committee on Feb. 28.
Telling Senators that "The biggest bang for the buck most likely would be provided by a temporary home buyer tax credit," Seiders noted that tax credits for the purchase of a home are a means of eliminating excess inventory, relieving some of the pressure on falling housing prices and ending the waiting-on-the-sideline strategy that some potential buyers have adopted in response to overly negative media stories concerning the future of the housing market.
Seiders warned Congress that the recently enacted Economic Stimulus Act of 2008 could fall short of achieving its intended results because it does not address the problems posed by the housing contraction that are at the root of today's economic and financial market woes, and said that "Congress can, and should, do more."
In a press release issued the day of Seiders' testimony, NAHB applauded the efforts of those senators who are seeking tax credit solutions of the kind that we are advocating. First, Sen. Debbie Stabenow (D-MI) has introduced S. 1988, legislation that provides for a temporary, one-time refundable tax credit for home buyers of up to 10% of the purchase price of a principal residence. Also, Sen. Johnny Isakson (R-GA) has introduced S. 2566, a bill creating a one-time $15,000 tax credit for purchasers of a single-family principal residence that is a newly constructed home or a home in default or foreclosure purchased within a one-year time period.
Seiders' testimony came a day after Federal Reserve Board Chairman Ben Bernanke's Monetary Policy Report to Congress and the same day as Bernanke's report to the Senate. Read what Bernanke said about the situation in housing markets and the economy here.
In addition to a home buyer tax credit, Seiders also urged Congress to consider several other changes to tax policy that would help get housing moving again, including expansion of the mortgage revenue bond program; allowing businesses to carry back net operating losses for five years; and designating housing as an eligible investment for tax-preferred retirement accounts. Read our press release or see the March 3 edition of NBN Online for more. Contact: Greg Brown, x8421.
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A good move by OFHEO
was announced on Feb. 27 with the GSE regulator's decision that it would allow Fannie Mae and Freddie Mac to purchase and hold more loans in their portfolios as a means of helping ease the mortgage credit crunch. Even so, OFHEO, the two housing government sponsored enterprises and Congress all need to take further action to help struggling home buyers and the ailing housing market, said NAHB EVP and CEO Jerry Howard in our reaction statement. Specifically, he said that OFHEO needs to go a step further by removing the current capital surcharge on the GSEs to allow them to truly become more active in buying mortgages. Currently, OFHEO requires Fannie Mae and Freddie Mac to hold 30% more capital than the minimum legal requirement. The higher capital requirements have constrained Fannie Mae and Freddie Mac from responding more aggressively to address the liquidity probems in the mortgage markets, and will also impede the GSEs' ability to utilize their new freedom on portfolio investments. Read more in our online statement or contact David Ledford at x8265.
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New-home sales moved lower in January
according to U.S. Commerce Department data released on Feb. 27. Providing the latest evidence of the continuing contraction in housing markets, sales of new single-family homes declined 2.8% to a seasonally adjusted annual rate of 588,000 units, which is the slowest pace since February of 1995. Using the report to support NAHB's advocacy for a second economic stimulus package with the possible inclusion of a new home buyer tax credit, NAHB Chief Economist David Seiders noted that such an added incentive could be especially helpful for reviving the housing market and economy right now, given the substantial increase in consumers who appear to be considering a new-home purchase. Three out of four regions posted lower new-home sales in January, with only the West posting a gain that partially offset a big decline in that region for the previous month. While the inventory of new homes for sale was down 2.2% to 482,000 units, the supply of units at the current sales pace edged up to 9.9 months – its highest level since April of 1982. The median length of time that completed homes were on the market as of January was 6.7 months, which is up from 6.2 months in December and just 4.8 months a year earlier. See our press release or contact Paul Lopez (x8409) for help with media inquiries.
NAHB Member Benefit: NAHB conducts regular and extensive media outreach when government housing figures are released each month to educate reporters about the historical context in which numbers should be viewed, discourage sensationalized accounts and ensure that home builders' views are represented. NAHB also assists our members in dealing with media inquiries regarding the latest government data.
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The latest S&P Case-Shiller house price statistics
 were, as usual, portrayed in the most negative light by the media upon their release on Feb. 26. These stats track the nation's 20 largest metro areas and are issued on a monthly basis – see the most recent release here. While the report indicates that overall home prices declined 9.1% in 2007 for the top 20 markets, a closer examination of the data shows that home appreciation rates vary among the different areas and that the same 20 markets have collectively chalked up an 85% gain in values since January of 2000. NAHB Public Affairs has created talking points to help associations address negative media coverage of the report and put the numbers in accurate historical context for our members and other stakeholders. To access these talking points, please contact Brooke Fishel at x8061.
NAHB Member Benefit: Don't forget about our continually updated materials within the Myth Buster Resource section on NAHB.org. These resources, which include talking points, op-ed articles, print advertisements, Q&As and housing statistics, are readily accessible at www.nahb.org/mythbuster.
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Freddie Mac's ill-advised plan
to impose higher lending fees and stricter downpayment requirements on home buyers is a step in the wrong direction and further highlights the critical need for GSE oversight reform. Reacting to the move, NAHB EVP and CEO Jerry Howard said in a statement that, "With the housing sector in the midst of its worst downturn since World War II, Freddie Mac's decision last week to raise the fees it charges on higher loan-to-value mortgages and on borrowers with lower credit scores could not come at a more inopportune time." Both Freddie Mac and Fannie Mae have taken previous steps to boost their fees at the expense of consumers, he said, adding that "Part of the reason they are tacking on added fees that result in higher housing costs is because their regulator, the Office of Federal Housing Enterprise Oversight, has ordered them to maintain higher capital reserves." In this economic climate, Fannie and Freddie should be taking steps to help borrowers, not to burden them, Jerry noted, adding that "This just underscores the need for Congress to act quickly to enact comprehensive reform of the housing government sponsored enterprises so that their mission responsibility can take precedence over their business interests." Read Jerry's complete statement here, or contact David Ledford, x8265.
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Find out what all the latest housing statistics mean
 by dialing in to NAHB's next media teleconference with CEO Jerry Howard and Chief Economist David Seiders. The call will take place on Tuesday, March 4, at 2:00 p.m. ET. Members of the media will have a chance to ask questions at the end. But NAHB members are also free to listen in for the scoop on the huge amount of housing data that's been released over the past two weeks – including existing and new home sales numbers, our builder sentiment index, housing starts and home price data. Hear Seiders's latest forecast for when we can expect to see the beginnings of a housing recovery, and find out what Jerry has to say about what Congress needs to do to help get the economy and housing market back on track.
To participate, please dial 1-800-860-2442 (toll-free) at the designated time and ask for the "NAHB Housing Market Update Call." And don't forget to download the related presentations and reference materials, which will be available 10 minutes before the conference call begins at: www.nahb.org/teleconference.
After the conference has concluded, you'll be able to listen to a full replay by calling 877-344-7529 and entering 416966 followed by the # sign when prompted for the account number. This replay will be accessible beginning at 4:00 pm ET on March 4 and remain available until 9:00 am ET on March 19. For more info, contact Liz Warin at x8495, or see our media advisory.
NAHB Member Benefit: NAHB's economic teleconferences help provide the media with a better perspective of current market trends and where they are headed, and help 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 and discouraging uninformed and unfair reports on market conditions.
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Your comments are requested
to help revise NAHB's Residential Construction Performance Guidelines (RCPG). This publication is an invaluable resource for builders and remodelers alike, and provides a basis for evaluating performance by parties under residential contracts when disputes arise leading to litigation or arbitration. NAHB has a special Working Group assigned to appraise and revise the third edition of the RCPG that was published in 2005. The fourth edition will be released in 2010. During the revision process, our working group will rely heavily on comments and suggestions from builders and remodelers. It has therefore developed an online form to gather your input – just go to www.nahb.org/rcpgcomments and submit your suggestions. You have until Friday, April 4, to participate, so check it out! Contact: Joshua Nester, x8461.
NAHB Member Benefit: The RCPG is one of the most utilized and widely distributed publications maintained by BuilderBooks, and it's available at a discount to NAHB members.
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Have you checked out NAHB's "Myth Buster" resources lately?
 If you're looking for regularly updated materials that can help you boost consumer confidence in the housing market, combat negative media reports and better understand the true state of our industry, be sure to visit www.nahb.org/mythbuster. Here you'll find regionally specific talking points, free print advertisements for your use, helpful economic data and more. If you haven't visited the Myth Buster section of our Web site yet – or recently – please make it a priority to do so, and let your fellow members know that these important resources are there for them. See also our Buy Now promotional toolkit that's packed with resources to help our HBAs and members address negative headlines and convince consumers that now is a good time to buy a home.
NAHB Member Benefit: NAHB is dedicated to producing and delivering resources that can help you navigate your business through today's challenging market conditions. These resources are continually updated and added to for your benefit.
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Honoring builders for their outstanding community service,
 NAHB's National Housing Endowment held a special awards ceremony during the 2008 International Builders' Show in Orlando last month. The actions of each of our award recipients this year demonstrate that difficult times in the home building industry haven't dampened the charitable impulses of our members, and shed a positive light on the enitre building community. Below are the 2008 recipients of the National Housing Endowment Builder Achievement Awards for Outstanding Community Service:
Gold Award
Orchard Development Corp., Ellicott City, MD
Silver Award
John Willis Homes, Duluth, GA
Bronze Award
Derrick Custom Homes, New Richmond, WI
Honorable Mention
Dan Rawls Co., Piedmont, SC
Lawrence F. Fiano Builders Developers and Northeast Foundation Coating LLC, Bolton, CT
Pardee Homes Las Vegas, Las Vegas, NV
Emmer Development Corp., Gainesville, FL
Lennar Homes, Roseville, CA
Read our press release for details, or contact Gwyn Donohue, x8447.
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NAHB wishes Michael Shibley all the best
as this longtime member of our family celebrates his retirement from NAHB after 28 years of dedicated service. Many readers of this report have had the good fortune to work with Michael over the years, and we're sure you join us in bidding him a fond farewell and "good luck" as he undertakes new endeavors going forward. During his long and productive career at NAHB, Michael took on many challenging roles across the federation, from helping in the development of NAHB's Smart Growth strategy to directing HBA field services, improving University of Housing education programs and revamping our Web site. Both in his previous roles and as EVP of the Builder, Affiliate and Associate Services area, Michael tackled every challenge with the greatest aplomb, earning the highest respect of both NAHB members and staff. Michael's last day at NAHB was Feb. 29, at which time his NAHB family, friends and colleagues gathered to wish him well and send him off in style. Happy NAHB retirement, Michael!
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