| April 27, 2009 |
By Joe Robson
NAHB Chairman and
Jerry Howard
NAHB President and CEO |
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Housing will lead the economy out of recession
as it always has done, ahead of job market recovery, said panelists at NAHB's Construction Forecast Conference this week. Meanwhile, mounting evidence suggests the tide may already be starting to slowly shift in a more favorable direction for home builders.
Setting the tone for the day, NAHB Chief Economist David Crowe began by noting that economic and housing data for the second quarter are "showing signs that we're past the worst of the housing recession," though there is still a long way to go toward a recovery. While most projections are that the economy will continue to lose jobs for some time yet, albeit at a slower pace with each consecutive month, Dave and fellow economists Maury Harris from UBS and Jim Glassman from JP Morgan each indicated in the conference's opening session that an improvement in new-home sales will be a necessary first signal of economic recovery. In fact, NAHB's forecast indicates that new-home sales most likely already troughed in this year's first quarter and that housing starts will follow suit in the second quarter.
Panelists cited factors such as very favorable mortgage rates that are expected to remain low in the foreseeable future; record high affordability; strong pent-up demand from new-household formations (including immigrants); the $8,000 first-time home buyer tax credit; the anticipated impacts of economic stimulus on job markets; government actions to slow foreclosures; bold moves by the Federal Reserve; falling material prices; and small improvements in consumer spending as key reasons for thinking housing activity has effectively reached a bottom. "Housing always turns up before unemployment peaks," noted Harris, who along with Crowe and Glassman predicted that a national economic recovery will start to take place in the second half of this year. A primary downside risk to such forecasts, said economists, is the ongoing credit crunch in consumer and housing production lending – though several cited evidence of slight loosening in the credit markets as a very positive sign. Read complete coverage of the Construction Forecast Conference in the April 27 edition of Nation's Building News Online. Contact: Steve Melman, x8245.
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Affirming NAHB support for expanding the NOL carryback provision,
Chairman Joe Robson issued the following official statement to the media and public on April 22:
"Since February 2006, residential construction has lost nearly 1 million jobs, and this figure continues to grow on a monthly basis. In order to put builders back to work and help revive housing and the economy, we continue to call on Congress and the Obama Administration to do everything possible to expand the net operating loss (NOL) carryback provision that was contained in the recently enacted economic stimulus legislation. NAHB supports the fullest and most robust NOL carryback provision possible in order to avert more costly layoffs in construction and other industries that would take an even worse toll on the nation's economy. As part of this expanded NOL carryback, NAHB also supports measures to ensure that an enhanced NOL rule would not create any undue advantages in the marketplace."
Also on April 22, NAHB issued a PRx notification to EOs regarding the association's latest actions on the NOL issue. To view the press release containing the statement, click here. For the PRx notification, contact Gwyn Donohue, x8447.
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Testifying on the American Clean Energy Security Act,
 NAHB Construction, Codes and Standards Committee Chairman Sonny Richardson told the House Subcommittee on Energy and the Environment on April 24 that Congress should encourage home energy efficiency with tax credits and incentives. Lawmakers must be certain that the Act offers the greatest environmental benefit without compromising housing affordability, said Sonny, who is a home builder in Tuscaloosa, Ala. NAHB provided several recommendations to the committee, including the idea that legislation should be flexible and incorporate not just savings achieved from insulated doors, windows and wall cavities, but also energy-efficient heating and air conditioning systems or a combination of insulation and appliance requirements depending on the home's location or market preference. "Don't modify codes and standards so that they can't accommodate every state's climate demands simultaneously or equally," Sonny cautioned.
NAHB also said Congress should extend or make permanent the tax credits passed earlier this year that incentivize the purchase of energy-efficient windows, additional insulation and other improvements in existing homes – where the greatest gains in energy efficiency are most likely to be realized. Meanwhile, the same funding available to encourage home owners to make such improvements should also be available to home buyers to help them pay the added costs associated with very efficient new homes, Sonny said. He also noted that "Congress must embrace the broadest possible green building policy and provide consideration for homes that achieve compliance with standards approved by the American National Standards Institute," for which federal law gives preference over private guidelines and rating systems. Read more in our press release, or contact Elizabeth Odina, x8570.
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New-home inventories continue to shrink
as incoming housing data provide further evidence that the market is starting to stabilize. New-home sales data from the U.S. Commerce Department, released April 24, indicated that the number of new homes on the market declined for a 23rd consecutive month in March, to 311,000 units. The same report showed that March's sales pace held virtually even with a relatively strong, upwardly revised pace in the previous month, falling just 0.6% to a seasonally adjusted annual rate of 356,000 units. In all, the data provided further justification for NAHB's expectation that new-home sales likely bottomed out in the first quarter. It also gave further proof that the first-time buyer tax credit and builder incentives are making an impact – particularly in the West, where a 15% gain in March was partly attributed to the pairing of the $8,000 federal tax credit with California's recently implemented $10,000 tax credit for buyers of newly built homes. Read our press release for more, or see the government's report online. Contact Paul Lopez (x8409) for help with media inquiries.
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Four more states are monetizing the first-time buyer tax credit
 so that consumers can use the $8,000 incentive at the closing table. The new programs are in Delaware, New Mexico, Pennsylvania and Tennesse, and they are similar to those previously initiated in Colorado, Idaho, Missouri, New Jersey and Ohio. For example, New Mexico's Mortgage Finance Agency offers first-time buyers a loan of 8% of the sales price, or $6,500 – whichever is less – to cover downpayment and closing costs. The home buyer then uses their $8,000 tax refund to pay off the loan, which is interest-free as long as it is paid back before June 30, 2010. The National Council of State Housing Agencies has established an information clearinghouse on tax credit monetization programs for consumers and other state agencies. You can also read about each of the four new programs in NBN Online. Contact: Rob Dietz, x8285.
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A new EPA decision on greenhouse gases could impact housing
 through new regulations on carbon dioxide emissions from numerous sources. This month, the agency issued a proposed "endangerment finding" concluding that emissions from cars and trucks contribute to dangerous levels of greenhouse gases now in the air. NAHB will be submitting comments on this proposed finding within the 60-day allowable timeframe. The agency's action is in response to a Supreme Court decision in Massachusettes v. EPA that the agency had not provided ample reasons for denying requests from several states for it to regulate greenhouse gases from cars and trucks. NAHB volunteers and staff are now in the process of studying the possible implications of this finding, and determining how it might change federal regulations under the Clean Air Act. Previously, NAHB published a white paper on what the housing industry might expect under stepped-up regulation of CO2 emissions. Check out that paper here. For more information, contact Matt Watkins, x8327.
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The IRS is publicizing beneficial small businesses tax provisions
 that were created by the recently enacted American Recovery and Reinvestment Act. These include a deferral for tax that would be required for debt forgiveness due to debt restructuring; an expanded net operating loss carryback provision for small businesses with deductions exceeding their income in 2008; and a Section 179 property deduction for qualified taxpayers. In addition, the act also includes such business-related provisions as: reduction of estimated tax payments; an extension of bonus depreciation deductions through 2009; and a capital gains tax break for investment in small businesses. Read about each of these favorable changes in NBN Online. NAHB has also compiled a complete summary of provisions in the American Recovery and Reinvestment Act that may be helpful to the housing industry. That list is available to you here. Contact: Rob Dietz, x8285.
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Rick Judson has been certified by the NAHB Nominations Committee
 as a candidate for NAHB Third Vice Chairman for the year 2010. Rick has been a member of NAHB for the past 37 years, having first joined the Charlotte HBA in 1972. He has served in various capacities at the local, state and national level, including serving as President of the North Carolina HBA in 2004 and twice serving as NAHB State Representative from North Carolina. He is currently the National Area Chairman for Area 4 and is on his eighth year as part of the NAHB Executive Board. He has chaired numerous influential NAHB committees, subcommittees and task forces, including Budget & Finance, Investment, Public Affairs and the NAHB Housing Finance Task Force. View Rick's official announcement as a candidate for 2010 NAHB Third Vice Chairman online. Contact: Diane Djordjevic, x8171.
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Finding NAHB professionals just got easier for today's consumers
 thanks to a recently launched, user-friendly online designation directory from the University of Housing. With a click of the mouse, consumers will now be able to locate NAHB professionals in their area who hold one or more of 16 NAHB professional designations. Check out the directory at: www.nahb.org/DesignationsDirectory. Here you'll find contact information for those with the following designations and more:
Certified Aging-in-Place Specialist (CAPS)
Certified Graduate Builder (CGB)
Certified Green Professional (CGP)
Certified New Home Sales Professional (CSP)
Graduate Master Remodeler (GMR)
Housing Credit Certified Professional (HCCP)
Member, Institute of Residential Marketing (MIRM)
The directory can serve as a networking resource for designation holders while also giving consumers a way to find them on the Internet. It can be searched according to designation, keyword, state, city, zip code, business type and specialty. Contact the Professional Designation Help Line at designations@nahb.com, or x8154.
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Two new videos on green building can help builders and buyers
 learn more about the subject. Both videos from the NAHB Production Group – one targeted to consumers, the other to home builders and remodelers – were produced and will be distributed to HBAs through a grant from the Wells Fargo Foundation. "The Green Home Guide: Connecting the Green Dots" provides prospective home owners with an introduction to green building, while "The Green Report" is geared to building industry professionals who are preparing to "green" their business practices. Each DVD includes an introduction to green certification programs and rating systems, including the National Green Building Standard for residential construction. HBAs will receive their copies later this spring, for use in home shows, expos and educational sessions. Complimentary copies will also be distributed to attendees of the upcoming NAHB National Green Building Conference in Dallas on May 8-10. Others may purchase the DVDs from the NAHB Production Group for $25 each, plus shipping and handling, with online web versions and volume discounts available. Contact: Dennis Harrison, x8188.
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NAHB bids farewell to Life Director Jacque Sheley,
 a former president of the Executive Officers Council and longtime advocate for our industry. Jacque was 78 years old when he passed away on April 18th. A graduate of Miami University who served in the United States Marine Corps during the Korean War, he resided in Centerville, Ohio, since 1963. He began his career in association management as an Assistant Director of the HBA of Greater Cincinnati in 1959 and later became Executive Director of the HBA of Dayton and the Miami Valley. He retired from this position in 1990, but continued to be active in his community for many years thereafter. Jacque will be greatly missed by his family, friends and colleagues. His full obituary is online here.
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