| February 1, 2010 |
Bob Jones
NAHB Chairman and
Jerry Howard
NAHB Chief Executive Officer |
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Getting set for a better year for home building in 2010,
approximately 55,000 builders, remodelers and other housing professionals turned out for a great International Builders' Show at the Las Vegas Convention Center last week.
 More than 1,000 of NAHB's supplier partners were spread across 20 acres of exhibit floor, and upwards of 175 education sessions were offered, ensuring that the show literally offered something for everyone to learn about and explore. A vibrant atmosphere and cautiously optimistic mood prevailed, with many participants citing the show's fantastic networking opportunities as a major reason for their attendance. Meanwhile, exhibitors indicated that IBS once again demonstrated its strength and value as the prime gathering spot for the nation's building industry. Highlights of the show and NAHB's meeting of our 2,000-member Board of Directors are related immediately below and elsewhere in this report.
Senior Officer Elections
NAHB's Senior Officers for 2010 were duly elected and inducted into office while at the show, including the newest addition to the team – Rick Judson, who was unanimously chosen to become NAHB Third Vice Chairman. Our 2010 Senior Officer ladder is as follows:
 Chairman of the Board
Bob Jones, Bloomfield Hills, MI
First Vice Chairman
Bob Nielsen, Reno, NV
Second Vice Chairman
Barry Rutenberg, Gainesville, FL
Third Vice Chairman
Rick Judson, Charlotte, NC
Immediate Past Chairman
Joe Robson, Tulsa, OK
Chief Executive Officer
Jerry Howard, Washington, DC
Partnership Pavilion
The launch of a brand-new NAHB concept called The Partnership Pavilion was extremely successful at IBS. Envisioned as a way to pair NAHB members with new funding sources for their projects, the Pavilion garnered some great reviews from participants and will hopefully provide a model for future similar endeavors by NAHB. Thirty financial firms signed up to look at project proposals that were submitted by our members ahead of time as well as on-site, with the pavilion providing an ideal meeting space for dealmaking. Read more about the success of our first-ever Partnership Pavilion in your next edition of Nation's Building News Online.
Scholarship Fund Announcement
 A special announcement made at the IBS Board of Directors meeting took NAHB Immediate Past Chairman Joe Robson by surprise. National Housing Endowment Trustee and NAHB Executive Board member Ken Klein announced the creation of the National Housing Endowment/Robson Education Fund, whose purpose will be to encourage the best and brightest students to enter the residential construction management industry. Founded by a gift from the HBA of Greater Tulsa and other interested individuals in honor of Joe Robson's service and dedication to the advancement of the home building industry, this new scholarship fund will be managed by the National Housing Endowment. Ken announced that more than $100,000 has been committed to the fund thus far. For more information, contact Madeline Smith, 800-368-5242, x8069.
Green Day
 Wednesday, Jan. 20, was designated as "Green Day" at the IBS, at which time a variety of educational seminars were offered on various subjects related to environmentally sensitive home building. Several of those sessions were specifically aimed at helping our members take advantage of emerging opportunities through the Obama Administration's "Recovery Through Retrofit" initiative (commonly referred to as "cash for caulkers"). NAHB's leadership wishes to thank our Green Day sponsors – Kohler, Whirlpool, and Marvin Windows and Doors– for their continued support of this important event.
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The housing forecast for the coming year,
 presented by economists speaking at the International Builders' Show last week, includes both hopeful and cautionary elements. First, the good news: according to NAHB Chief Economist David Crowe, "the stage is set for the consumer to return," and because of the slow pace of the recovery, home builders will profit from generally low inflation in building materials prices and wages. Meanwhile, the extension and expansion of the home buyer tax credit is expected to generate some sales activity in the early months of the year as economic growth gradually kicks in and bolsters an increase in housing activity. That said, our chief economist also warned that this remains "a cautionary period" for housing, largely because of the discouraging level of joblessness, which he forecasts will peak at 10.2% in the first quarter and remain elevated, exceeding 8% at the end of 2011.
NAHB's current forecast projects 697,000 housing starts in 2010, a 25.6% gain from 2009's estimated 555,000 units. However, this improvement is only expected to be reflected in the single-family sector, where starts are forecast to rise 37.7% from 443,000 last year to 610,000. Meanwhile, due in part to an acute shortage of financing, multifamily starts are expected to lose further ground in 2010, slumping to 87,000 units – down 22.3% from last year's 112,000 level. This compares to the 285,000 multifamily units that were started in 2008, which is near the level that is needed to keep the supply in balance with demand. On a separate note, the consensus of economists participating in the IBS forecasting session was that mortgage rates are headed higher, but are unlikely to exceed 6% in the next year or two. Read more in NAHB's press release.
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FHA announced tighter lending requirements
 during the week of the International Builders' Show, a move that spurred an immediate reaction from NAHB. As a means of strengthening its reserves in the face of rising foreclosures, the agency said it intends to raise Mortgage Insurance Premiums, increase downpayment requirements for those with FICO scores below 580 and reduce allowable seller concessions from 6% to just 3%. The changes to Mortgage Insurance Premiums will become effective this spring; other changes will likely go into effect by early summer. Responding to the agency’s actions, NAHB sent a letter to HUD Secretary Shaun Donovan seeking a meeting to discuss ways to ensure that the policy changes do not impede the ability of the FHA to insure loans for viable mortgage borrowers in the near term and the longer run. NAHB also issued a statement in which 2009 Chairman Joe Robson said, "NAHB understands the need for the FHA to respond to developments in its portfolio that will enable the agency to continue to operate on a sound financial footing. At the same time, the FHA is an indispensable source of financing for America’s home buyers and must fulfill this vital mission at this fragile juncture. NAHB looks forward to working with the agency to ensure that it maintains its central role in the nation’s housing finance system and provides homeownership opportunities for millions of creditworthy borrowers." We will keep you informed via this report as the latest developments unfold. Contact: MondayMorningQuestions@nahb.org.
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Builder confidence edged down one point in January
 to 15 on the NAHB/Wells Fargo Housing Market Index (HMI) due to continuing concerns about the poor job market and large number of foreclosed homes for sale. "At this point, home builders have done everything we possibly can to set the stage for a housing recovery," noted 2009 NAHB Chairman Joe Robson in our press release. "We've thinned our inventories, we've kept new construction to a minimum, and we've fought for and achieved a great new buying incentive with the extension and expansion of the home buyer tax credit. We stand poised and ready to deliver new homes as soon as our customers are ready to take advantage of the tax credit and other historically good buying conditions in terms of interest rates, selection, and prices." Yet builders also realize that factors beyond their control – including consumer concerns about job security and competition from foreclosed homes on the market – are still impeding demand for new homes at this time. Two of the HMI's three component indexes registered single-point declines in the month, with the index gauging current sales conditions and the index gauging traffic of prospective buyers falling to 15 and 12, respectively. The index gauging sales expectations in the next six months held even, at 26. Read our press release for more, or check out the official HMI tables online. Send questions to MondayMorningQuestions@nahb.org.
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Housing production slowed in December, but permits were up
 according to the U.S. Commerce Department's report dated Jan. 20. While nationwide housing starts fell 4% to a seasonally adjusted annual rate of 557,000 units, permit issuance – which can be a sign of future building activity – rose by a strong 10.9% to a 653,000-unit rate. While single-family starts were down 6.9% in December to 456,000 units, multifamily starts posted a 12.2% gain to 101,000 units. Permits gained 8.3% on the single-family side and 20.8% on the multifamily side. On an annualized basis, year-end figures from the Commerce Department indicated that overall housing starts declined 38.8% to 554,000 units in 2009, with single-family numbers down 28.7% to 444,000 units and multifamily numbers down 61.1% to 110,000 units. Commenting on the report, NAHB Chief Economist Dave Crowe said, "These figures give us the first estimate of the worst year we've seen for housing production since the Census began recording these numbers." However, he noted, "We remain cautiously optimistic about a recovery in 2010, as job growth begins to show positive signs by mid-year." Read our press release or the government's report online.
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New-home sales fell 7.6% in December
 to a seasonally adjusted annual rate of 342,000 units, according to figures released by the U.S. Commerce Department on Jan. 27. The numbers are indicative of the fact that, while purchasing conditions for new homes are extremely favorable right now, the sobering realities of a weak economy and job market continue to weigh on consumers' decisions to move forward with a home purchase. But they are also not too surprising, given the fact that December was still too soon for most consumers to know about, and act upon, the newly extended home buyer tax credit. Moreover, it is likely that some sales that might otherwise have taken place at the end of the year were pulled forward to earlier months to take advantage of the previous tax credit that expired at the end of November, thereby exacerbating the December decline, said NAHB Chief Economist David Crowe. Regionally, sales activity was quite mixed this time around, with the Northeast posting a nearly 43% gain, the Midwest registering a 41% decline, the South posting a 7.3% decline and the West generating a 5.2% gain.
Meanwhile, Commerce's year-end numbers for 2009 indicated that a total of approximately 374,000 new homes were sold last year – down almost 23% from 2008 and the lowest number of new-home sales since the government started keeping track in 1963. NAHB's experts are, however, expecting the newly extended and expanded home buyer tax credit to begin having its intended positive impacts on buyer demand over the coming few months. Read our press release or see the government's official report for more.
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Three new resolutions were approved at the IBS Board meeting
and will become official NAHB policy directing our future efforts. These include:
Resolution 1 – Support for Multifamily Housing Tax Policy
Resolution 2 – Hydropower as a Renewable Resource
Resolution 3 – Future of Fannie Mae and Freddie Mac
and the Housing Finance System
Click on the links above to read the full-texts of each of these resolutions, or contact Jessica Lynch at 800-368-5242, x8401 for more information on the resolutions process.
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The first recipients of green multifamily certification
 under the National Green Building Standard have something to set them apart in their Tennessee marketplace. Certified at the bronze level by the NAHB Research Center, the condos are the first two buildings completed in the Park Run community at McKay's Mill in Franklin, Tenn. When completed, the overall development will comprise 23 buildings with a total of 92 condominium units. Built by The Jones Company, a top-100 single-family builder that has constructed dozens of single-family green-certified homes, the certified condo buildings took a resource-efficient approach to materials. Many components include recycled material, and all unused construction materials were recycled offsite. Read more about this latest breakthrough in multifamily green building in our press release. Send questions to MondayMorningQuestions@nahb.org.
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NAHB's Quick Issues Index document
 was updated for the IBS Board of Directors meeting in Las Vegas. 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, 800-368-5242, x8450.
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NAHB bids farewell to Hall of Fame builder F. Coin Campbell, Jr.,
 an Atlanta-area builder who dedicated more than 50 years to our industry and the NAHB federation. A third generation home and light commercial builder who was instrumental in establishing the Greater Atlanta Home Builders Association, Coin passed away in Hiawassee, Ga., on Jan. 22, at the age of 85. Having worked since high school as a laborer, carpenter, draftsman and superintendent, in 1948, he founded his own firm. After that, he became one of the first builders in Georgia to develop condominiums, and one of the first in the country to build split-level homes. He was also a major force in formulating, updating, rewriting and implementing housing codes and regulations in the Atlanta area and all of Georgia for more than 30 years. For his career efforts, Coin Campbell was inducted into the NAHB Housing Hall of Fame in 1993; he was also a member of the Georgia Housing Hall of Fame and a recipient of the Greater Atlanta HBA's highest honor, the Lewis Cenker Award. Our thoughts are with Coin's wife, children, grandchildren and great-grandchildren as we mourn the passing of our highly respected friend and colleague.
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