| June 8, 2009 |
By Joe Robson
NAHB Chairman and
Jerry Howard
NAHB President and CEO |
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Participating in a business roundtable with Vice President Joe Biden
at Pace University on June 2, NAHB Chairman Joe Robson provided details on how the first-time home buyer tax credit is having a positive impact on the housing industry.
 The event was scheduled by the White House to draw attention to ways that the Housing and Economic Recovery Act is working to provide new opportunities and stimulate economic activity. Joe reported that the tax credit has played a key role in helping to arrest the slide in the housing market, and that recent HUD action that will permit home buyers to monetize the tax credit for use at the closing table (see third story below) should result in a sizeable increase in the number of people taking advantage of this incentive. Overall, he said, NAHB anticipates that the tax credit will stimulate nearly 200,000 additional home sales across the country this year – including more than 70,000 purchases by existing home owners who will be able to make their move because a first-time buyer purchased their home. In addition, the new construction component of the tax credit stimulus will produce 73,000 jobs in 2009. While this is a solid start, Joe cautioned that we still have a long way to go to get back to anything close to a healthy housing market, considering that we have lost 3 million jobs in housing and related industries since the market's peak in 2005.
Importantly, Treasury Deputy Secretary Neal Wolin was a fellow participant in the White House's roundtable discussion, alongside our Chairman. Joe seized this opportunity to speak directly to that official regarding the severe state of credit conditions for home builders and our members' dire concerns on this front. For more on the Vice President's roundtable event, check out the White House blog or contact Bill Killmer, x8526.
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Testifying on the future status of Fannie Mae and Freddie Mac,
 NAHB Chairman Joe Robson told the House Subcommittee on Capital Markets, Insurance and Government-Sponsored Enterprises on June 3 that it is critical for the federal government to provide a backstop to the housing finance system to ensure a reliable and adequate flow of affordable housing credit. Joe said that NAHB supports changes to the structure and operations of Fannie Mae and Freddie Mac to enable them to support mortgage market liquidity and address affordable housing finance needs without creating excessive taxpayer risk. "Fannie Mae and Freddie Mac should be recast, retaining federal backing but limited primarily to providing credit enhancement of mortgage-backed securities," Joe said. "Limited portfolio capacity would be permitted to accommodate mortgages and housing-related investments that do not have a secondary market outlet, although Fannie Mae and Freddie Mac should have the flexibility to support the mortgage market in times of crisis, such as the conditions we are currently experiencing." In recommending several specific principles for federal government support and structuring of the housing finance system, Joe stressed that such changes should not proceed until the current financial turmoil passes and the markets return to normal conditions. Read NAHB's press release for more, or contact Dave Ledford, x8265.
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HUD Secretary Shaun Donovan made a welcome announcement
when he addressed a special session of NAHB's Board of Directors on May 29.
 Speaking before a standing-room-only crowd, the Secretary was able to confirm that morning that HUD had just officially issued guidelines that will allow first-time home buyers who qualify for the $8,000 tax credit to apply that credit toward their home purchase right away. This is a very positive move, and with the spring home buying season in full bloom, the timing could not be better. The guidelines will allow government agencies and FHA-approved lenders and non-profits to give home buyers short-term loans of up to $8,000. They will also allow longer term loans secured by second liens to be used by government agencies and FHA-approved non-profits to facilitate home sales. In addition, approved FHA lenders will be able to purchase a home buyer's anticipated tax credit to pay closing costs and downpayment costs above the required 3.5% downpayment. As Donovan pointed out, this latest action will enable tens of thousands of buyers to purchase homes, including trade-up buyers who will now be able to sell their existing homes. More information on the guidelines and a video of the Secretary's appearance before our Board of Directors is available at: www.NAHB.org/HUDAnnouncement.
In the coming days, NAHB will be working closely with HUD to ensure the quickest possible implementation of the new guidelines so that consumers can take advantage of the tax credit before it expires at the end of November. Contact: Rob Dietz, x8285.
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Home builders will help resolve the issues with Chinese drywall,
 said NAHB member Randy Noel in testimony before the Senate Commerce Subcommittee on Consumer Protection, Product Safety and Insurance on May 21. Speaking on behalf of the nation's home builders, Randy said that NAHB members are continuing to work on a daily basis to respond to home owners who are reporting problems with the product. “NAHB supports the Consumer Product Safety Commission’s current efforts to identify the actual scientific cause of the problem and develop an appropriate testing protocol to identify problematic drywall,” he noted. “Once the cause is identified and a testing protocol is established, it will greatly help builders identify potential home owners who may have problems.” Congress should also explore ways to identify possible sources of funding to help offset the costs of remediation, he said, particularly if it is determined that the ultimate responsibility lies with manufacturing entities located in China.
Introduced by Sens. Bill Nelson (D-Fla.) and Mary Landrieu (D-La.), S. 739, the Drywall Safety Act of 2009, would mandate that the CPSC, National Institute of Standards and Technology and the Environmental Protection Agency conduct a study of Chinese drywall to determine its effects on metal wiring, HVAC units and other metal fixtures. The study would also assess the potential health impacts from exposure to the product. Of concern to NAHB, the bill would seek to ban the sale of any drywall product in the U.S. that contains more than 5% organic compounds by weight. Randy told Congress that in many cases the organic compounds in the paper backing of the drywall alone could exceed the 5% limit, regardless of the content of the drywall’s core. “We urge the subcommittee and the bill sponsors to investigate other ways in which to target the drywall that is of concern, without potentially banning all drywall produced in the U.S.,” he said. Contact: Jenna Hamilton, x8407 or David Jaffe, x8317.
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The American Clean Energy Security Act,
 a bill that would limit greenhouse-gas emissions and create a national building code that completely supplants the national model code development process, was approved by the House Energy and Commerce Committee a little more than one week ago. Prior to the vote, NAHB reached out to members of the committee to express our concerns over the federal preemption of states' rights to determine building codes, saying that "H.R. 2454 violates state and local rights to establish building codes and efficiency targets within the jurisdiction." We also noted NAHB's disappointment that the committee did not consider NAHB's testimony presented on April 24 and voiced our opposition to the legislation on the grounds that it is unnecessarily prescriptive, that it falls short of creating an effective energy policy that is constitutional and that it endangers housing affordability. Unfortunately, an amendment supported by NAHB and several other real estate groups failed on a party vote. However, at this time it remains unclear when the bill might go to the floor for a vote by the full House of Representatives. NAHB will keep you apprised going forward. Read more in NBN Online, or contact Elizabeth Odina, x8570.
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A handful of positive housing data
has been released over the past few weeks, providing the latest evidence that the market may in fact be poised for a turnaround. For example:
New-home sales held steady in April while the inventory of unsold units continued to shrink to a much more comfortable level, according to figures released by the U.S. Commerce Department on May 28. Read more here.
 Builder confidence in the market for newly built single-family homes improved for a second consecutive month in May, with NAHB's Housing Market Index (HMI) reaching its highest level since September of 2008. Read more here.
Housing affordability surged to its highest level in 18 years during the first quarter of 2009, according to the NAHB/Wells Fargo Housing Opportunity Index (HOI) released on May 18. Read more here.
Single-family starts and permits both edged higher in April as builders responded to improving conditions for new-home buyers. Read more here.
NAHB's Remodeling Market Index (RMI), released May 14, recorded substantial gains in all of its component indexes in the first quarter. Read more here.
NAHB's Multifamily Rental Market Index and Multifamily Condo Market Index, released on May 26, found a few notes of optimism among builders involved in these industry segments during the first quarter. Read more here.
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5,055 new NAHB members were recruited
on National Membership Day this May 19, a truly spectacular feat considering the challenges of today's marketplace. 2009 NAHB Membership Chairman Ed Brady said that the real victory was in the high participation rate and high energy that was displayed by every HBA and HBA representative involved, as well as our volunteer leadership and staff at NAHB headquarters. NAHB's Spike Club members deserve special recognition as well for their overall successful recruitment efforts.
The top-performing local associations were, according to preliminary pledge results:
MBA of King & Snohomish Counties, Washington - 271
Memphis Area HBA, Tennessee - 222
Central Oregon BA - 155
HBA of Magic Valley, Idaho - 146
Tidewater BA, Virginia - 128
HBA of Lincoln, Nebraska - 124
BIA of Southern California - 104
HBA of the Norfolk Area, Nebraska - 98
Spokane HBA, Washington - 98
Top-performing state associations included:
North Carolina HBA - 755
BIA of Washington - 700
HBA of Tennessee - 643
Florida HBA - 561
HBA of Virginia - 557
Texas AB - 478
Wisconsin BA - 468
Pennsylvania BA - 378
HBA of Alabama - 377
Nebraska State HBA - 356
Read more in NBN Online, or contact Rusty Deiss, x8231
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Resolutions and Recommendations approved by the NAHB Board
during the Spring Board of Directors meeting in Washington last week are available for your review online. They include:
1. Energy Efficiency Targets for Reductions in Greenhouse Gas Emissions
2. Endorsements of Presidential Tickets by Senior Officers
3. Policy on Radon
4. Nuclear-Powered Electric Generation
5. (Withdrawn)
6. Design Patents
7. Impact of Multiple Memberships
8. (Withdrawn)
9. Association Antitrust Policy
10. (Withdrawn)
11. Expanding Investor Market for Low Income Housing Tax Credits
12. Providing Affordable Housing for Rural Americans
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NAHB's Quick Issues Index document
was updated
 in preparation for the Spring Board of Directors meeting here in Washington, DC, and distributed to all Board and Executive Board members while they were here. This document provides you with a quick summary of top NAHB Advocacy issues on which there have been significant developments in recent months. It also tells you where to go for more information on any topic, with links to online resources as well as contact information for staff experts. The Quick Issues Index is available at: www.nahb.org/issuesindex (Note: you must be logged into the NAHB Web site with your member ID and password to view this resource). Contact: Samantha Silver, x8450. [
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