| July 21, 2008 |
By Sandy Dunn
NAHB President and
Jerry Howard
NAHB Executive VP and CEO |
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The Senate stepped up to the plate on July 11
by voting to approve by a wide margin crucial housing stimulus legislation that includes the all-important temporary first-time home buyer tax credit. All eyes are now on the House of Representatives as it takes up the measure for an expected vote on July 23.
 H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act, should help get home buyers back into the marketplace, stabilize house prices, stem the rising tide of foreclosures and restore confidence in our housing finance system. In addition to the tax credit (currently set at $8,000), the bill contains several other important provisions, including: regulatory reform of the housing-related GSEs and a permanent increase of the GSEs' conforming loan limits up to $625,500; FHA modernization measures and a permanent increase in the maximum FHA-insured loan to $625,500; a temporary increase in state tax-exempt bond authority; enhancements to the Low Income Housing Tax Credit and tax exempt bond programs; and an expansion of FHA program authority to help at-risk borrowers refinance with viable mortgages and prevent further foreclosures.
While House and Senate lawmakers largely agree on the core provisions of the bill, the House is likely to make some modifications to it before approving the measure. If so, the Senate will then need to approve those changes before the legislation can be sent to the President to be signed into law. In the meantime, NAHB will continue to push aggressively for the swiftest action possible on this much-needed legislation. Read more in our press release, or contact: Greg Brown (x8421) or Scott Meyer (x8144).
NAHB Member Benefit: As part of a major grassroots effort, NAHB is urging its members to contact their U.S. senators and representatives and ask them to have the effective date of the proposed home buyer tax credit extended for an additional 90 days to make it as effective as possible in turning around the current downturn in home sales. In effect, we are asking the House, as it begins making its changes to the bill, to add the months of April, May and June 2009 to the effective date of the credit. NAHB members are being urged to contact their members of Congress through the association's free Legislative Hotline at 1-866-924-NAHB (x6242). Read last week's front-page NBN story for details, and for complete instructions on how to participate in this telephone and e-mail campaign, click here. |
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Appearing on the CBS Evening News,
 NAHB President Sandy Dunn and New Jersey builder Dean Mon represented our industry in the national spotlight this past week. Sandy was interviewed for a short segment on the housing market and overall economy that aired on July 15. To view the CBS clip, click here. The following evening, New Jersey builder Dean Mon also appeared on the CBS Evening News. He called on Congress to pass housing stimulus legislation now. To view that clip, click here. Such national exposure followed several other significant media appearances by NAHB's Senior Officers and staff in the past week as we pounded home our messages on the need for an immediate housing stimulus. For example, CNNMoney cited NAHB President Sandy Dunn’s call for housing stimulus following release of our monthly Housing Market Index (story below). Also, NAHB CEO Jerry Howard recently met with reporters and editors at The Wall Street Journal and BusinessWeek in New York to discuss recent government actions regarding Fannie Mae and Freddie Mac and to call for a renewed push to pass the housing bill in the wake of the recent turmoil in the housing and financial markets. Jerry delivered the same message in interviews with Reuters, Dow Jones and the editorial page editor of the Palm Beach Post, which subsequently published an editorial that conveyed NAHB’s viewpoint. Bill Killmer, NAHB Group VP for Advocacy, spoke on the same topics in an interview with Congressional Quarterly. For more on our exhaustive media outreach efforts, contact Paul Lopez, x8409.
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A new rule from the Fed on home mortgage loans,
 approved on July 14, is aimed at better protecting consumers and facilitating responsible lending. The final rule, which amends the Fed's Home Ownership and Equity Protection Act (HOEPA)/Truth in Lending Act regulations, largely follows the Fed's December 2007 proposal. NAHB submitted comments on that proposed rule on April 8. While supportive of the Board's efforts to bolster mortgage lending standards and consumer protections, we raised concerns related to the Board's proposed definition of High Priced Mortgage Loans (HPMLs), which would be subject to additional consumer protections. One issue was that the proposed definition, which was based on an index of Treasury rates, could also capture a significant portion of the prime mortgage market, which clearly was not the Board's intent. In response to NAHB recommendations and others, the final rule switched the benchmark for determining HPMLs to a mortgage rate series based on the Freddie Mac Primary Mortgage Market Survey. NAHB believes that the use of this benchmark will capture virtually all loans in the subprime market, but generally exclude loans in the prime market from the new HOEPA restrictions. The new rules are effective Oct. 1, 2009, unless noted otherwise. View the final rule here. For more info, contact John Dimitri at x8529.
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Builder confidence hit a record low this month
with another two-point decline on the NAHB/Wells Fargo Housing Market Index (HMI) that was released July 16. The HMI fell below its previous record low of 18 in June to settle at 16 for July, with each of its three component indexes also hitting record lows. This latest evidence of continuing severe weakness in the nation's housing markets, coupled with the near-meltdown in financial markets over the past week, makes it even more urgent for Congress to complete action on the housing bill now, NAHB said. NAHB Chief Economist David Seiders observed that builders are reporting that traffic of prospective buyers has fallen off substantially in recent months. He said that, "Given the systematic deterioration of job markets, rising energy costs and sinking home values aggravated by the rising tide of foreclosures, many prospective buyers have simply returned to the sidelines until conditions improve," and estimated that a temporary $8,000 tax credit could be just the thing to draw people back into the game. The HMI's component index gauging current sales conditions declined a single point to its lowest level on record at 16, while the index gauging sales expectations for the next six months fell four points to 23 and the index gauging traffic of prospective buyers fell four points to 12. Read more in our press release, or see the HMI tables online. Contact: Gopal Ahluwalia, x8480.
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Single-family housing starts and permits were down in June
 as home builders wisely continued to slow the pace of new construction in light of worsening conditions in the nation's housing and financial markets. The U.S. Commerce Department reported on July 17 that starts of new single-family homes declined 5.3% to a seasonally adjusted annual rate of 647,000 units, which was the slowest pace in 17 years, while issuance of building permits for single-family homes was down 3.5% to a rate of 613,000 units. In a press statement, NAHB noted that while builders are doing their part to limit the inventory of new homes on the market, "Now more than ever, it's up to Congress, which must finish its work on a badly needed housing stimulus package that will help stabilize the housing market and stem the negative effects of the housing downswing on our economy."
Total housing starts and building permits for June, including multifamily numbers, posted misleading gains of 9.1% and 11.6%, respectively, largely due to a one-time bump in multifamily activity that was related to newly instituted building code changes in New York City. Excluding the Northeast multifamily data, there was a 4% decrease in overall housing starts and a 0.7% gain in building permits in June. Read NAHB's press release or see the government's report online. Contact Paul Lopez (x8409) for help with media inquiries.
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FHLBank Director applications are due August 15!
 The next round of Public Interest Director appointments to Boards of the 12 Federal Home Loan Banks will soon be underway. Under current regulations, each of the FHLBanks is required to forward their recommendations to their regulator, the Federal Housing Finance Board, by Oct. 1. NAHB has established a process for assisting members who are interested in serving on FHLBank boards.* NAHB members who are interested in applying for a public interest directorship and wish to be considered for an NAHB recommendation should contact John Dimitri, x8529, no later than Aug. 15, 2008. The www.nahb.org home page also has a special announcement on this subject.
*Housing stimulus legislation currently under consideration in Congress may change the process for determining FHLBank Directors to one in which all directorships are elected by member institutions. For now, NAHB is following our current PID recommendation policy.
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Policies that encourage rather than mandate energy savings
 are the most effective means of stimulating greater demand for energy-efficient homes, NAHB member and St. Louis green builder Matt Belcher told Congress on July 17. Testifying before the House Subcommittee on Energy and Air Quality on the topic "Climate Benefits of Improved Building Energy Efficiency," Matt cautioned lawmakers about the danger of one-size-fits-all proposals for home construction. "The ability of aggressive building code mandates to achieve massive energy and greenhouse gas emissions savings is incredibly limited," he said, explaining, "The wide-ranging geographic differences in state and local climates create specific building needs, making national benchmarks almost untenable." Matt also noted that requirements that impact housing affordability have the greatest effects on the first-time home buyer. Finally, Matt pointed out that while residential buildings have been shown to consume about 22% of the nation's energy and produce about 21% of its greenhouse gas emissions, above-code efficiency mandates for new homes will not address the majority of the market, which is comprised of existing homes. He also asked Congress to extend the New Energy Efficient Home Credit, which was enacted in 2005 and expires at the end of the year. Read more in our press release or contact Calli Schmidt at x8132.
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NAHB is helping builders avoid silica hazards
 and minimize their exposure to the substance with our newly developed safety card titled "Silica Hazards in Home Building." Available in English and Spanish, the card provides a general overview of silicosis, its symptoms, recommendations for reducing or eliminating exposure, and related resources. Construction activities such as sandblasting, rock drilling, masonry work, jack hammering and tunneling are among those that pose the greatest risk for worker exposure. In January, OSHA established a National Emphasis Program to reduce such exposure, under which OSHA's field staff will target and inspect various work sites, including those in the home building industry. NAHB's new safety card on silica is the first in a series of cards being made available by our association to provide employers and their workers with safety and health information on emerging topics. For more information, visit the Safety Cards section on our Web site, or contact Kevin Cannon, x8590.
NAHB Member Benefit: NAHB works with OSHA to provide the residential construction industry with information, guidance and access to training resources to help protect employees' health and safety. Also, through BuilderBooks, NAHB offers a comprehensive set of resources that are geared towards helping companies improve the safety awareness and practices of their employees. To see all of the resources available through BuilderBooks, go to: www.builderbooks.com/safety.
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Find out how to "Get Hesitant Boomers to Buy Now"
 by dialing-in to our upcoming audio seminar of that title at 2:00 pm EDT on Tuesday, Aug. 12. Presented by NAHB and the NAHB 50+ Housing Council, this interactive program will show you ways to overcome prospective buyers' fears and motivate them to take the plunge in today's market conditions. A panel discussion moderated by Rich Carlson, CAASH, MIRM, CMP of Carlson Communications will include speakers Deborah Blake from Pulte Homes and Chuck Covell from Covell Communities. Note: there is a $79 fee per phone site for the conference. Register and get more information at www.nahb.org/boomersbuynow. Contact: Jeff Jenkins, x8292.
NAHB Member Benefit: Participants in the audio conference will earn one hour of continuing education credit for NAHB's Certified Active Adult Specialist in Housing (CAASH) designation. For more information on continuing education, contact the University of Housing at designations@nahb.com.
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A free brochure on lead-safe work practices for remodelers
 has been issued by the EPA and is available to you online. "Contractors - Lead Safety During Renovation" outlines the procedures that remodelers must follow under the recently published Lead: Renovation, Repair and Painting rule that governs the work of professional remodelers in homes where there is lead-based paint. It briefly outlines the tools and protective clothing needed, how to set up safe work areas, how to minimize dust, what to do inside and outside the work area, and more. Read more in NBN Online. Additional information is also available from the EPA at www.epa.gov/lead. Contact: Matt Watkins, x8327.
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