Monday Morning Briefing Letter - 07/30/2007 (Plain Text Version)
By Brian Catalde, NAHB President and
Reporting on the mid-year outlook for the housing industry,
NAHB Chief Economist David Seiders conducted a well-attended media teleconference on July 25. A total of 133 participants phoned in, including such media outlets as USA Today, The Wall Street Journal, and the Associated Press and Reuters wire services.
The fact of the matter is that "The ball is still rolling down the hill to some degree," Seiders said, citing current affordability problems tied to the abrupt tightening of mortgage lending standards and the sizable inventory overhang. However, there is some suggestion that, in terms of the tightening of credit standards for home mortgages following the subprime shakeout, the worst may be drawing to an end. According to Seiders, after a breakdown of mortgage lending standards in recent years, "Maybe the credit pendulum in home mortgage lending has swung back most of the way" and lending standards won't be tightened much more – we've had one heck of a lot of credit standard tightening" to this point, he noted.
NAHB Member Benefit: NAHB's economic teleconferences help the media to achieve a better understanding 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 of market conditions that may affect your client's decision to purchase a new home.
New-home sales fell 6.6% in June,
according to the federal government's report on these statistics released July 26. This decline brought the seasonally adjusted annual rate of new-home sales to 834,000 units for June, which was 22.3% off the pace set one year ago and down 40% from the housing market peak in mid-2005. According to NAHB Chief Economist David Seiders, a significant increase in prime mortgage interest rates, along with the tightening of mortgage standards in subprime and other components of housing finance, clearly weighed on home buying in the month. And, while home builders continue to trim prices and offer large nonprice sales incentives, many prospective buyers are choosing to remain on the sidelines. The inventory of new homes for sale in June was at 537,000 units – equal to the level reported for May. This is a 7.8-month supply at the current sales pace. Completed homes for sale made up a full third of the inventory, while units still under construction represented almost 51% and units for-sale that were permitted but not yet started represented 16% of the inventory. The median length of time that completed homes were on the market was 6 months in June, which was up from 5.7 months in May. See NAHB's press release or the full government report online. [return to top]
Broadening the scope of the Clean Water Act
to include all waters of the United States rather than just the "navigable" waters covered by the current law would be a big mistake and the most significant legislative expansion of the CWA since its adoption in 1972, NAHB told Congress this month. In written comments submitted to the House Committee on Transportation and Infrastructure regarding H.R. 2421, the Clean Water Restoration Act, NAHB warned that if the legislation were to pass, "the courts would ultimately decide whether a 'water' is subject to CWA jurisdiction. Such litigation would involve not just the scope of [the Act], but also the scope of Congress's constitutional authority." Our comments also sought to make Congress aware of the substantial efforts by home builders to comply with the law and help protect our natural resources. "Our members regularly design their projects to avoid sensitive areas, showcase natural resources and mitigate adverse impacts," we said. Moreover, "NAHB has tirelessly advocated for a Clean Water Act, which helped the nation make significant strides in improving the quality of our water resources." But the idea of regulating navigable waters, as opposed to all waters, is "the touchstone" of the CWA, we said, noting that the term 'navigable waters' appears 81 times within the statute. This very fact illustrates Congress's intent and the importance of that key word. While this controversial bill has not as yet advanced beyond the hearings stage, NAHB will monitor any further developments very closely and keep you informed. Contact Calli Schmidt at x8132, or see a more detailed story in last week's NBN Online.
Register now to attend the 2008 IBS.
Registration and housing for the 2008 International Builders’ Show is now open. Be sure to register early to secure lodging in your preferred hotel and get the early-bird discount . The 2008 show will feature some great new speakers and education opportunities never before seen at an IBS. There's something for everyone on the agenda, whether you're a veteran builder or someone who's newer to the industry. In keeping with the times, the focus of many of IBS programs will be on how to succeed amid current market conditions. Also, remember that a special $100 First-Time Attendee registration fee is available to both long-time members who have never attended the show before and any new members, including those who have already attended the show before as non-members. HBAs can certainly point to this as a great recruiting tool for new members. To register and get more information, just go to the www.BuildersShow.com Web site!
The Monday Morning Briefing will skip a week
and will not be published on Mon., Aug. 6. Our next regular edition will be dated Aug. 13. [return to top]
For more information or to contact us directly, please visit www.NAHB.org | ©2007, National Association of Home Builders