The New Home in 2015

The following is an excerpt from the March 2, 2011 report by By Rose Quint, with the NAHB Economics & Housing Policy Group

The current housing downturn has affected not only the number of new homes that are built each year, but also the characteristics, features, and size of the ones that do get built. Many in the industry are wondering about how the new home will evolve over the next few years and whether those changes will stick once the economy bounces back to a more solid footing. In 2010, NAHB conducted a survey that sheds light on the likely characteristics of the average, new single-family detached home in 2015. This article summarizes the findings of that survey, which were released in December 2010 in a report titled The New Home in 2015.

Some of the most relevant findings include:

• The average, new single-family home will be smaller and have more green features
• The living room will either vanish or merge with other spaces in the home
• The “Great Room” is the likeliest room to be included in the average new home
• Low-e windows and engineered wood products are the likeliest green features
• A double sink, recessed lighting, and table space for eating are very likely in kitchens

Read the entire report at HousingEconomics.com by clicking here.

Housing Starts and Permits Stall in February

Nationwide housing starts and issuance of permits for new housing construction both posted disappointing declines in February as concerns about a growing number of factors caused builders to pull back on production of new homes, according to newly released figures from the U.S. Commerce Department. Total housing starts declined 22.5 percent from January to a seasonally adjusted annual rate of 479,000 units, the second-slowest pace on record. Equally disconcerting, total permit issuance for new homes fell 8.2 percent to a record low pace of 517,000 units in February.

"The decline in new construction and permits in February is the culmination of a great deal of nervousness that both builders and consumers are feeling right now," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. "In an already-fragile market where credit for building and buying homes remains extremely tight, additional concerns about energy costs, interest rates and other factors are contributing to an atmosphere in which many have adopted a very cautious stance." Nielsen noted that, as part of NAHB's annual legislative conference taking place today, hundreds of home builders are personally taking the message to Congress that the flow of credit for housing must quickly be restored.

"While our latest member surveys showed a slight uptick in expectations for the future, there are just too many uncertainties out there for most builders and buyers to comfortably move forward with a new-home project at this time," acknowledged NAHB Chief Economist David Crowe. "We need to see several months of consistent improvement in economic factors, plus concrete signs that the flow of credit to housing is improving, in order for the industry to return to a steady recovery and facilitate job growth."

The declines in February housing starts were broad-based, reaching to every sector and region of the country. While single-family starts declined 11.8 percent to a seasonally adjusted annual rate of 375,000 units, multifamily starts – which tend to display greater volatility on a month-to-month basis – declined 46.1 percent to a rate of 104,000 units. Regional declines amounted to 37.5 percent in the Northeast, 48.6 percent in the Midwest, 6.3 percent in the South and 28 percent in the West.

Declines in permit issuance were also widespread in February. The single-family sector posted a 9.3 percent drop to 382,000 units while the multifamily sector posted a 4.9 percent drop to 135,000 units, and regional declines amounted to 27.8 percent in the Northeast, 5.4 percent in the Midwest, 1.4 percent in the South and 13.6 percent in the West.

Builders Urge Congress to Restore Flow of Credit to Housing

Restoring the flow of acquisition, development and construction (AD&C) lending that has been choking off credit for home builders and impeding job growth took center stage today as 500 builders from across the country converged on Capitol Hill for the annual NAHB Legislative Conference.

"Our message to Congress is simple and straightforward," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nevada. "Unless we resolve the ongoing credit problems for home builders – the vast majority who are small business owners who employ less than 10 workers – the industry will lose even more jobs, resulting in longer-term economic damage."

Also, NAHB members who were unable to attend the day-long conference participated by calling the Capitol Hill offices of their representatives and senators to deliver the same message.

In the current economic climate, lenders have basically stopped making AD&C loans and many are calling existing loans, even when the borrower's payments are current. Financial institutions are also requiring additional equity for existing loans, and are refusing to modify loans to give borrowers an opportunity to regroup.

Overly conservative appraisals are presenting further challenges by limiting home sales and refinancing opportunities and exacerbating pressure on outstanding mortgage and housing production loans. Lenders are often citing regulatory requirements or pressure from bank examiners to reduce AD&C loan exposure as the rationale for their actions.

"As a result of this regulatory pressure, the home building industry is having extreme difficulty in obtaining credit for viable projects," said Nielsen. "In short, the credit window seems to have been slammed shut for builders all over the country."

Builders visiting with their lawmakers urged their members of Congress to become an original cosponsor of legislation crafted by Rep. Gary Miller (R-Calif.). The measure proposes a legislative fix to specific instances of regulatory excess to allow the banking industry to restore lending for viable home building projects and discourage lenders from curtailing or calling construction loans where payments are current.

In 250 individual meetings with their representatives and senators, builders also called on Congress to enact comprehensive reform legislation regarding the future of government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac that ensures the federal government continues to provide a backstop for a reliable and adequate flow of affordable housing credit in all economic and financial conditions.

On the issue of tax reform, NAHB urged lawmakers to oppose any changes to the tax code that would increase taxes on home owners, renters or home builders. Curtailing or eliminating the mortgage interest deduction, the capital gains exclusion, the deduction for property taxes, the Low Income Housing Tax Credit and other housing tax incentives would further depress home prices, leaving countless more home owners owing more than their homes are worth and triggering a new wave of foreclosures.

Annual Upstate Housing Market Forecast Will Feature NAHB Chief Economist David Crowe

Each year your Home Builders Association of Greenville hosts the Upstate Housing Market Forecast Luncheon. This is one of our most popular and well-attended meetings. We invite an economics professional to brief the housing industry about expectations in the housing market for the coming year. Since 2008 HBA members have relied on this meeting to help them plan their businesses for the coming year, and the information presented has been especially valuable in the recent down economy.

This year we have invited NAHB’s Chief Economist, Dr. David Crowe, to be our speaker. Dr. Crowe is already expressing optimism about our local market, so you don’t want to miss what he will have to say.

To Register for the Upstate Housing Market Forecast, click here.

About David Crowe:

David Crowe is Chief Economist and Senior Vice President at the National Association of Home Builders (NAHB). Dr. Crowe is responsible for NAHB’s forecast of housing and economic trends, survey research and analysis of the home building industry and consumer preferences as well as microeconomic analysis of government policies that affect housing.

Dr. Crowe is also responsible for the development and implementation of an innovative model of the local economic impact and fiscal cost of new home construction, which has estimated the net impact of new housing in over 500 local markets. Past research has concentrated on home ownership trends, tax issues, demographics, government mortgage insurance, local land use ordinance impacts and the impacts of housing on local economies.

Before becoming NAHB’s Chief Economist, Dr. Crowe was NAHB’s Senior Vice President for Regulatory and Housing Policy. Prior to NAHB, Dr. Crowe was Deputy Director of the Division of Housing and Demographic Analysis at the U.S. Department of Housing and Urban Development.

He has served on federal advisory committees to the Census Bureau and to the U.S. Department of Housing and Urban Development.

Dr. Crowe holds a PhD in Economics from the University of Kentucky.

Learn how to design and build with SIPs at the SIPA Annual Meeting in Greenville

Builders and architects interested in improving the energy efficiency of homes and commercial buildings can learn about structural insulated panel (SIP) construction with free educational seminars offered by the Structural Insulated Panel Association, March 23, 2011 in Greenville, South Carolina.

SIPs are a prefabricated panelized building system composed of a core of insulating foam between two structural facings, such as oriented strand board (OSB). Building with SIPs can cut home energy use by 50 percent or more when combined with other energy-efficient systems. SIPs also help builders reduce framing time and labor costs.

Two seminars will be offered the morning of March 23 at the Hyatt Regency hotel at 220 N Main Street in Greenville.

SIP Builder Training
9:30am – 12:30pm
FREE
The SIP Builder Training course will be taught by Al Cobb, an experienced SIP installer and Director of the SIPschool, the only SIP-specific training facility in the U.S.

Introduction to SIP Design
9:30am – 10:30am
FREE – AIA CES credits available
Don Jahnke of Energy Panel Structures will lead the Introduction to SIP Design course. Jahnke is an experienced SIP builder and certified HERS rater.

Attendees are encouraged to register in advance of the seminars at www.sips.org.

About SIPA
The Structural Insulated Panel Association (SIPA) is a non-profit association representing manufacturers, suppliers, dealer/distributors, design professionals, and builders committed to providing quality structural insulated panels for all segments of the construction industry. Learn more at www.sips.org.

Greenville in the top 100 markets for remodeling

Greenville South Carolina is ranked 82 in the Top 100 Markets list for remodeling, according to Remodeling magazine. The Top 100 Markets list is based on the Residential Remodeling Index, a metric developed by Hanley Wood Market Intelligence. The index measures the overall level of remodeling activity in 366 metropolitan statistical areas nationwide.

Also making the top 100 are Charlotte (8), Columbia (39), Atlanta (40), Augusta (62), and Charleston (76).

To read the Top 100 Markets article in Remodeling, click here.

Rasmussen: Just 44 Percent Expect Their Homes to be Worth More in Five Years

Homeowners are more pessimistic about the short-term housing market, but now fewer than half the nation's homeowners expect the value of their homes to go up in the next five years.
The latest Rasmussen Reports national telephone survey of 720 Homeowners shows that just 19 percent of homeowners believe their home's value will go up over the next year, down slightly from last month. But 30 percent expect its value to go down in that time, tying the highest level of pessimism in two years of surveying. Roughly half (49 percent) think their home's value will remain about the same over the next 12 months as it is now.

Feelings about further down the road are getting gloomier, too. Only 44 percent believe their home's value will go up in the next five years. That's down six points from last month and is just three points above the lowest level measured in almost two years. In 2010, the number of homeowners who expected values to increase in five years ranged from a low of 41 percent in August to a high of 55 percent in April.

Sixteen percent now expect the value of their home to go down in the next five years, the second-highest finding in two years. Thirty-three percent predict their home's value will remain about the same.

The survey of 720 Homeowners was conducted on March 15-16, 2011 by Rasmussen Reports. The margin of sampling error is +/- 4 percentage points with a 95 percent level of confidence.

To read the entire report, click here.