Friday, June 1, 2012

Your HBA's Top 12, Number 2: NAHB Chairman Rutenberg testifies before Congress on Lacey Act

Builder Review Daily is highlighting your HBA's Top 12 actions this Spring on behalf of home builders.

Number 2, NAHB Chairman Rutenberg testifies before Congress on the Lacey Act:

One of the most important things that NAHB does for its members is to serve as your voice in Washington, and ensure that our industry’s concerns are taken into account when changes that will affect your businesses are being debated by Congress and regulators. One such instance of this representation was Chairman Barry Rutenberg’s testimony before Congress on May 8 regarding needed changes to the Lacey Act to protect businesses that unknowingly purchase illegal wood products from having their property seized and being exposed to civil and criminal liability.

Due to its representation of more than 140,000 members of the housing industry, NAHB is a recognized force and authority in the nation’s capital, and our senior officers are frequently invited to testify before Congress as laws impacting our industry are debated. NAHB Chairman Barry Rutenberg appeared before the House Natural Resources Subcommittee on Fisheries, Wildlife, Oceans and Insular Affairs on one such occasion this May. Making it clear that NAHB supports the goals of the Lacey Act and the prevention of trade in illegally harvested plant and wood products, Rutenberg called lawmakers' attention to the fact that "honest business owners, including home builders who exercise due care and had no knowledge that a seized product contains illegal wood, should have the right to seek the return of those goods.” Under the current statute, innocent companies are left without legal standing to challenge a government taking in court. “Builders have no way of knowing the origin of a particular piece of lumber, a component of a cabinet, a closet door or crown molding,” Rutenberg explained. That is why NAHB is urging Congress to amend the Lacey Act to include reaffirmation of civil forfeiture law so that innocent consumers and businesses would have the opportunity to seek the return of their property in court if it was seized as a result of any enforcement actions under the law. Contact: Suzanne Beall (800-368-5242 x8407).

Thursday, May 31, 2012

NAHB: Builder Confidence Continues to Rise

Builder confidence in the market for newly built, single-family homes gained five points in May from a downwardly revised reading in the previous month to reach a level of 29 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. This is the index’s strongest reading since May of 2007.

“Builders in many markets are reporting that buyer traffic and sales have picked back up after a pause this April,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “It seems we have resumed the gradual upward trend in confidence that started at the beginning of this year, as stabilizing prices and excellent affordability encourage more people to pursue a new-home purchase.”

“While home building still has quite a way to go toward a fully healthy market, the fact that the HMI has returned to trend is an excellent sign that firming home values, improving employment and low mortgage rates are drawing consumers back,” said NAHB Chief Economist David Crowe. “The pace of this emerging recovery could be stronger were it not for the significant impediments that the market continues to face with regard to builder and consumer access to credit, inaccurate appraisals, and more recently, rising materials prices.”

Derived from a monthly survey that NAHB has been conducting for 25 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

Each of the index’s components rebounded from declines in the previous month. The component gauging current sales conditions and the component gauging traffic of prospective buyers each rose five points in May to 30 and 23, respectively, with the traffic component hitting its highest level since April of 2007. The component gauging sales expectations in the next six months rose three points to 34.

Three out of four regions registered improving builder sentiment in May. This included a six-point gain to 32 in the Northeast, and five-point gains to 27 and 28 in the Midwest and South, respectively. The West posted a two-point decline, to 29.

Editor’s Note: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be found at More information on housing statistics is also available at

NAHB: Nationwide Housing Affordability Reaches New Record High

Nationwide housing affordability hit a new record high for a second consecutive quarter in the first three months of this year, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), released today. Yet tight lending conditions continue to pose a major obstacle to many prospective home buyers.

The latest HOI data reveal that 77.5 percent of all new and existing homes that were sold in this year’s first quarter were affordable to families earning the national median income of $65,000. This beats the previous record set in the final quarter of 2011, when 75.9 percent of homes sold were affordable to median-income earners.

For the Upstate, the affordability index is 84.4, down slightly from 84.7 in the fourth quarter of 2011.  Median household income rose from $58,300 to $59,000 from quarter-to-quarter.  Median home prices also rose to $1,000 to $140,000.  The Greenville region ranks 106 nationally in affordability.

“Homes in this year’s first quarter were more affordable than they have been at any time in more than 20 years, yet many potential sales are not happening because of overly tight lending conditions that are keeping hardworking families from obtaining a suitable mortgage,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “Without this significant hurdle, the housing and economic recovery could be proceeding at a much stronger pace.”

The most affordable major housing market in this year’s first quarter was Indianapolis-Carmel, Ind., where 95.8 percent of homes sold during the period were affordable to households earning the area’s median family income of $66,900.

Also ranking among the most affordable major housing markets in respective order were Dayton, Ohio; Lakeland-Winter Haven, Fla.; Modesto, Calif.; Grand Rapids-Wyoming, Mich.; and Buffalo-Niagara Falls, N.Y.; the latter two of which tied for fifth place.

Among smaller housing markets, Cumberland, Md.-W.Va. topped the affordability chart for the first time in this year’s first quarter. There, 99 percent of homes sold during the first quarter were affordable to families earning the area’s median income of $53,000. Other smaller housing markets at the top of the index include Fairbanks, Alaska; Wheeling, W.Va.; Kokomo, Ind.; and Davenport-Moline-Rock Island, Iowa-Ill., respectively.

In New York-White Plains-Wayne, N.Y.-N.J., which retained the title of the least affordable major housing market for a 16th consecutive quarter, just 31.5 percent of homes sold in the first three months of this year were affordable to those earning the area’s median income of $68,200.

Other major metros at the bottom of the affordability chart included San Francisco-San Mateo-Redwood City, Calif.; Honolulu; Los Angeles-Long Beach-Glendale, Calif.; and Santa Ana-Anaheim-Irvine, Calif., respectively.

Ocean City, N.J., was the least affordable smaller housing market on the list, with 45.9 percent of homes sold in the first quarter affordable to families earning the median income of $71,100. Other small metros at the bottom of the list included Santa Cruz-Watsonville, Calif.; San Luis Obispo-Paso Robles, Calif.; Santa Barbara-Santa Maria-Goleta, Calif.; and Laredo, Texas.

Please visit for tables, historic data and details.

EDITOR’S NOTE: The NAHB/Wells Fargo Housing Opportunity Index is a measure of the percentage of homes sold in a given area that are affordable to families earning that area’s median income during a specific quarter. Prices of new and existing homes sold are collected from actual court records by First American Real Estate Solutions, a marketing company. Mortgage financing conditions incorporate interest rates on fixed- and adjustable-rate loans reported by the Federal Housing Finance Board.

The NAHB/Wells Fargo HOI is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public.

Governor Haley signs Multiple Lot Discount Bill

Governor Haley signed into law on May 25 the Multiple Lot Discount Bill, the signature legislative issue of the Home Builders Association of South Carolina.

The legislation gives a temporary three-year extension (2012-14 tax years) on the multi-lot tax abatement for builders and developers.  In addition, it extends any remaining time left on the original five years to qualified residential developers. For builders who had the one-year builder discount in 2009, 2010, or 2011, they will get an additional three years. No refunds will be allowed. In addition, during the three year “timeout” period, qualified builders and developers can sell lots to other builders or developers and the discount will transfer with the lot. In addition, the bill makes permanent changes in the law to end annual recertification of the discount, and provides that subdivisions platted after May 1 of each year may still get the discount in that year by paying a very low late application fee ($100). The bill also terminates the old section 224 lot discount program, and makes several technical changes to ensure uniformity in the tax code.

Check out the news coverage of Governor Haley signing the bill at WLTX TV by clicking here.

NAHB: New Southern Pine Design Values Take Effect Tomorrow

New design values for #2 and lower grade Southern Pine and Mixed Southern Pine 2x4’s will become effective on June 1, 2012. These reduced values, developed by the Southern Pine Inspection Bureau (SPIB), were approved by the American Lumber Standard Committee's Board of Review in January. At the urging of NAHB and other industry stakeholders, an effective date of June 1 was provided to allow the industry some time to transition to the new design values while avoiding project delays and market disruptions.

As part of these efforts, the American Wood Council has developed addenda to the National Design Specification for Wood Construction, the Wood Frame Construction Manual, and the Span Tables for Joists and Rafters reflecting the new design values, and has also developed recommended amendments to prescriptive tables in the International Residential Code and International Building Code.

The new values were reduced by 25-30% and will primarily affect the design of roof trusses. Though the maximum allowable spans for 2x4 headers, joists and rafters will be shorter, they are not commonly used in those applications, and so will have minimal effects on most builders. In addition, 2x4 studs used in conventional construction are not affected by this change.

It is NAHB's understanding that any such adoption would apply only to new construction. Projects already under construction or submitted to the building department prior to an adoption date should not be affected. However, builders are advised to consult with their local jurisdiction regarding any plans to adopt and enforce the new design values.

Going forward, SPIB is testing additional sizes and grades of Southern Pine. A submission to ALSC is expected in late summer or early fall, which may propose reductions to design values for larger sizes (e.g. 2x8 and 2x10) and higher grades (#1 and Select Structural). ALSC has also directed that the other major species (Douglas Fir, Hem-Fir and Spruce-Pine-Fir) should undergo sampling and testing to assure there are no changes to their current design values.

NAHB has created a special web page titled Information and Resources on Propposed Changes to Southern Pine Lumber Design Values that is dedicated to keeping our members updated on this issue. A “Frequently Asked Questions” document is in the process of being developed and will also be posted on that web page.

For additional information, email Gary Ehrlich at NAHB or call him at 800-368-5242 x8545.    

Your HBA's Top 12 actions at the national level during the Spring

As a member of the HBA of Greenville, you also are a member of the National Association of Home Builders. NAHB's 3,000 directors and 250 staff have been working hard on your behalf this Spring.  In the series we will publish over the next 12 days we will highlight the Top 12 accomplishments during the Spring of 2012.

Accomplishment 1: introduction of three important pieces of legislation to improve conditions for home builders and remodelers

The Home Building Lending Improvement Act of 2012 (S.2078)

Because the difficulty of accessing and maintaining construction credit continues to be a major obstacle for home builders and the housing recovery in general, NAHB has been aggressively pushing for solutions to this crisis on both the regulatory and legislative fronts. NAHB worked with Senator Robert Mendendez (D-N.J.) to ensure introduction of this bill in early February. The legislation seeks to restore the flow of credit for new housing production in order to create jobs, meet rising housing demand and bolster the economic expansion. It has brought significant attention to the AD&C credit crunch in Congress, and has helped spur questions about credit availability in various congressional hearings, thereby exerting pressure on banks and regulators to help resolve the situation. Its introduction follows up on similar legislation that NAHB helped get introduced in the House last year -- H.R. 1755, the Home Construction Lending Regulatory Improvement Act -- which currently has 95 House cosponsors. For details on S. 2078 or H.R. 1755, contact Scott Meyer (800-368-5242 x8144).

The Lead Exposure Reduction Amendments Act of 2012 (S. 2148)

While NAHB supports measures to ensure that young children and pregnant women are protected from exposure to lead paint, the time and costs associated with the EPA’s flawed Lead: Renovation, Repair and Painting rule (LRRP) effectively incentivize home owners to 1) hire an uncertified remodeler who doesn’t follow the rules 2) put off needed repairs or 3) do the work themselves – each of which subverts the intention of the rule in the first place. NAHB has led the charge in Congress and with regulators to try to make this rule more workable and effective, and in early March we made a major step forward when Sen. James Inhofe (R-Okla.) and five co-sponsors introduced legislation to improve the lead paint rule. This bill gives remodelers the opportunity to lobby their political representatives in Congress, who in turn can put pressure on the EPA to make specific necessary amendments to the rule. The bill itself would:
  • Reinstate the opt-out provision for homes that are not occupied by children or pregnant women, thus focusing the rule on the protection of these specific groups.
  • Suspend the LRRP if EPA does not approve a commercially available test kit that meets the regulation’s requirements.
  • Allow remodelers the “right to cure” paperwork errors found during an inspection.
  • Eliminate the “hands on” recertification training requirements.
  • Prohibit EPA from expanding the LRRP to commercial and public buildings until at least one year after the agency conducts a study demonstrating the need for such action.
  • Clarify the definition of “abatement” to exclude remodeling/renovation activities.
  • Provide an exemption to the regulation for emergency renovations.
The introduction of this legislation is a significant step forward in raising the visibility of issues related to the current regulation, and was urgently advocated by NAHB. Looking ahead, we will rally our members to help build support for this measure in the U.S. Senate and continue our efforts to have companion legislation introduced in the House. For more information, please contact Courtney Flezzani (800-368-5242 x8459).

The Preserve Waters of the United States Act (S. 2245) and companion legislation in the House (H.R. 4965)
The EPA and Army Corps of engineers are getting ready to issue a guidance document that will evade the more transparent rule-making process to eliminate all reasonable limits on the scope of Clean Water Act jurisdiction. As a result, the federal government’s reach would extend to essentially all waters, including storm sewers, retention basins and seasonal streams. This blatant regulatory overreach would lead to many more land development, road construction and residential projects requiring federal permits and would exacerbate permitting delays. In turn, it would increase construction costs, cause job losses, drive down housing affordability and hamper economic growth. NAHB is leading the charge against this possibility by building support for legislation that we successfully pushed to be introduced in both the House and Senate. This legislation has especially strong backing in the House after being introduced on April 27 by Transportation Chairman John Mica (R-Fla.) along with ranking member Nick Rahall (D-W.Va.), Water Resources Subcommittee Chairman Bob Gibbs (R-Ohio), Agriculture Chairman Frank Lucas (R-Okla.) and ranking member Collin Peterson (D-Minn.). Contact: Courtney Flezzani (800-368-5242 x8459).

Learn about employment trends and rules at June 6 Education Forum

The cost of a bad hire and how to avoid it is the title of an article this week by Stephanie Klein in the Denver Business Journal.  In the article, Klein discusses the importance of a well-craft hiring process.  "Hiring the wrong person can cost your business thousands of dollars and have ramifications that echo far beyond that single bad hire," Klein writes.

Read the complete article by Stephanie Klein in the Denver Business Journal by clicking here.

Your HBA of Greenville is planning an Education Forum that will help you understand the importance of recruiting and managing a successful team of employees.

The next Education Forum is Wednesday, June 6, 11:30 a.m., at Hubbell Lighting Headquarters.
  • Topic: Human Resources: Recruitment, Management, and Diversity
  • Speakers: Lawanna Dendy, PHR, GBS Building Supply, and Carrie Scott, SPHR, Find Great People
  • Sponsors: GBS Building Supply and Progress Lighting

Wednesday, May 30, 2012

Make the Most of Your Networking Opportunity at the HBA Homecoming Event May 31

by Melinda BrodyMelinda Brody and Company 
Networking…it is one of those things we love to hate. If you are in sales of any kind, you know that networking is a necessary tactic in developing new business and making more sales. So, why do we LOVE to hate networking so much? In my opinion it is because we really don’t know HOW to network properly.

When most of us hear the word ‘business networking event’, an image of walking around a room full of strangers, handing out business cards and trying to think of things to say to these strangers usually comes to mind. Also, if you are part of an organized networking event, you know the dreaded ‘1 minute elevator speech introduction’ is also probably on the docket as well. So the image becomes you walking around aimlessly, trying to think of witty and intelligent things to say to people you don’t know AND you are shaking in your boots about doing your ‘LIVE at the Improv’ 60 second infomercial! No wonder we love to hate networking!

According to Wikipedia Business networking is: a socioeconomic activity by which groups of like-minded businesspeople recognize, create, or act upon business opportunities. A business network is a type of social network whose reason for existing is business activity. There are several prominent business networking organizations that create models of networking activity that, when followed, allow the business person to build new business relationships and generate business opportunities at the same time.

GOSH – it even sounds hideous and boring!

So, how in the world can you network effectively and actually enjoy it?? Well, for starters you need to have a plan in place before you ever walk in the door! Here are 5 simple tips to make your networking efforts effective, and more importantly, FUN!
  1. Do your homework. Find out in advance who is going to be there and then conduct a little research on them (Linked In is a GREAT resource for this!). Try to pinpoint 3 – 5 people who you REALLY want to meet before you ever even arrive.
  2. Arrive early to the event. This allows you to get comfortable with your surroundings and ‘get in the zone’. Pretend you are the official ‘greeter’ and make a point to welcome and introduce yourself to people as they walk it. This is A LOT easier than walking up to a group of strangers and introducing yourself!
  3. Do NOT, and I repeat, Do NOT give out your cards to ANYONE unless they specifically ask for it. In fact, don’t even TALK about yourself, instead ASK questions about the people you meet. Look at networking as a ‘fact finding’ mission….find out as many things as you can about the people in the room. If you do indeed meet someone who you think you could be a resource for, or vice versa, then exchange cards and make a point to follow-up.
  4. Practice your 60 second elevator speech until you have it memorized. Trying doing something unique or different. Instead of saying ‘Hi, my name is Melinda Brody and I own a video mystery shopping company’ try something like ‘Who likes to watch themselves on video?’
  5. Finally, relax and have fun. Think of business networking for professionals as a fraternity party for college kids (minus the keg of beer!). It is a chance to connect with a wide variety of people from diverse backgrounds and industries.
Networking is a big part of what you do as new home sales professional. So accept and embrace each opportunity. You never know WHO you will meet!

Your next HBA networking opportunity:
Try out what you learned in this article by attending the HBA Homecoming at the Dillard-Jones Southern Living Showcase House on May 31, 5:30 p.m.  Click here for details and to register.

FHFA: House Price Index shows the first annual increase since 2007

U.S. house prices rose modestly in the first quarter of 2012 according to the Federal Housing Finance Agency’s (FHFA) seasonally adjusted purchase-only house price index (HPI). The FHFA HPI was up 0.6 percent on a seasonally adjusted basis since the fourth quarter of 2011. The HPI is calculated using home sales price information from Fannie Mae and Freddie Mac mortgages. Seasonally adjusted house prices rose 0.5 percent from the first quarter of 2011 to the first quarter of 2012. FHFA’s seasonally adjusted monthly index for March was up 1.8 percent from February.

“Consistent with other housing market indicators, the FHFA HPI showed stronger house prices in the first quarter, most notably in March,” said FHFA Principal Economist Andrew Leventis.  “Increased affordability and a somewhat smaller inventory of homes for sale are positively impacting house prices.”

FHFA’s expanded-data house price index, a metric introduced in August 2011 that adds transactions information from county recorder offices and the Federal Housing Administration to the HPI data sample, rose 0.2 percent over the latest quarter. Over the latest four quarters, the index is down 1.3 percent. For individual states, price changes reflected in the expanded data measure and the traditional purchase-only HPI are compared on pages 24-26.

While the national, purchase-only house price index rose 0.5 percent from the first quarter of 2011 to the first quarter of 2012, prices of other goods and services rose 3.2 percent over the same period. Accordingly, the inflation-adjusted price of homes fell approximately 2.6 percent over the latest year.

Significant Findings:
  • The seasonally adjusted purchase-only HPI rose in the first quarter in 30 states and the District of Columbia.
  • The top five annual increases were Hawaii (10.3 percent), Washington, DC (9.8 percent), Iowa (5.7 percent), Florida (4.7 percent) and North Dakota (4.4 percent).
  • Of the nine census divisions, the Mountain division experienced the strongest prices in the latest quarter, posting a 1.4 percent price increase. Prices were weakest in the New England division, where prices fell -0.7 percent.
  • As measured with purchase-only indexes for the 25 most populated metropolitan areas in the U.S., first-quarter price increases were greatest in the Houston-Sugar Land-Baytown, TX area. That area saw price increases of 2.4 percent between the fourth quarter of 2011 and the first quarter of 2012. Prices were weakest in Atlanta-Sandy Springs-Marietta, GA, where prices declined 3.3 percent over that period.
The complete list of state appreciation rates is on pages 20-21. The list of metropolitan area appreciation rates computed in a purchase-only series is on page 35. Appreciation rates for the all-transactions metropolitan area indexes are on pages 38-52.

Click here to read the complete report at

HBA Board of Directors elects new officers, directors

The HBA of Greenville Board of Directors elected four new members to the association's Board of Directors.  The following members were elected to fill unexpired terms on the Board of Directors:

  • Mike Freeman, GMB, Vice President.  Mike is President of ACA Freewood Contracting.
  • Susan Peace-Vernon, Secretary.  Susan is Vice President of Dillard-Jones Builders.
  • Gus Rubio, Builder Director.  Gus is President of Gabriel Builders, Inc.
  • Matt Vaughn, Associate Director.  Matt is market leader for Homeowners Mortgage

The HBA of Greenville  is a consumer resource for finding builders, remodelers, and home improvement specialists in the Upstate region of South Carolina. Membership includes local and national builders, remodelers, specialty contractors, manufacturers, financial and insurance professionals, realtors, and many others that offer products and services for homeowners and first-time homebuyers.

The HBA's Board of Directors includes 20 professionals from within the association's membership.  The Board is led by the association's President, Robert Markel, CGR.  The association is managed by ten professional staff and consultants.

Addison Homes Joins Best Practices Research Alliance®

Addison Homes has joined the Best Practices Research Alliance®, a community of homebuilders collaborating with building performance specialists, business/quality management experts and industry suppliers. Members work together to research, demonstrate and share the technical and business best practices that are moving truly energy-efficient homes into the mainstream.

“We’re privileged to be part of this research-based collaboration,” says Todd Usher, president of Addison Homes, a company that builds 100 percent of its properties to ENERGY STAR® and EarthCraft House™ standards. “It’s a compelling opportunity to share our experience and insights about building high-performance homes with like-minded peers across the country. Continuous improvement can be a rigorous process, but as we move closer toward the ideal of zero energy everyone — from our clients to the community at large — reaps the benefits.”

Founded by IBACOS (Integrated Building and Construction Solutions), the Alliance comprises some 40 homebuilders of all sizes throughout the United States. Research efforts are aligned with the U.S. Department of Energy’s Building America program and key areas of focus include zero energy homes, energy smart homes and business/quality management. For more information on the Best Practices Research Alliance®, visit

NAHB Economists on what the "fiscal cliff" means to Home Builders

In a recent post on Eye on Housing, NAHB Housing Economic's blog, NAHB Economists discuss what the impending "fiscal cliff" of tax increases and spending cuts may mean for Home Builders.

Read the "fiscal cliff" article at Eye on Housing.

GSA Business: S.C. Ranks 16th in Friendliness Toward Small Businesses

South Carolina ranked No. 16 nationally for friendliness toward small business, according to a recent survey by, in partnership with the Ewing Marion Kauffman Foundation.

The Palmetto State received an overall grade of B+, garnering mostly high marks in the two-month survey that involved 6,000 small-business owners nationwide.

Other key findings for South Carolina included:
  • It costs relatively little to hire a new employee in South Carolina — the state was the second-least costly place in the nation to hire a new employee. 
  • Women-owned small businesses in South Carolina were significantly more optimistic about their financial future than their male counterparts. Female entrepreneurs were 15% more likely than male entrepreneurs to rate their company's financial situation as likely to improve over the coming year. 
The state received a grade of A+ for the ease of starting a small business, cost of hiring a new employee and friendliness of environmental regulations. It received an A for overall regulatory friendliness, and friendliness of employment, labor and hiring regulations.

National Flood Insurance Program Could Expire (Again)

With the National Flood Insurance Program (NFIP) set to expire May 31, NAHB continues to work doggedly to seek a five-year reauthorization of the federally-backed flood insurance program to ensure it remains efficient and effective in protecting flood-prone properties and creates more stability in the housing market.

The House on May 16 approved a one-month extension of the program in order to buy time to negotiate a longer-term reauthorization with the Senate. At this time, it is unclear whether the Senate will agree to the 30-day extension.

Call to Action:
Urge Your Senators to:
  • Support S. 1940, the reauthorization of the National Flood Insurance Program;
  • Support any amendments that removes Section 107 or any “residual risk” language;
If you have any questions or feedback, please email
About NFIP Legislation:
The National Flood Insurance Program is extremely important to home builders and homeowners across the country. Over the past few years this program has had a series of extensions and four lapses that have caused construction delays, cancelled closings and in several cases, job losses; which is why a long term reform bill needs to be signed into law. S. 1940, reauthorizes the NFIP for five years which will give this issue a longer term solution.

The passage of S. 1940 is imperative for the home building industry, however it is not perfect. Section 107 of the bill would require any properties in areas behind dams or levees (known as “residual risk” areas) to purchase flood insurance. For many communities, a great deal of time and taxpayer money was spent to provide additional flood protection for these areas, and in many cases a levee fee is also included in the property tax assessment. To now mandate the purchase of additional flood insurance policies at a cost to the homeowner is simply unfair.

In the past few years, the NFIP has experienced several short-term lapses in authorization, forcing many home buyers to delay or cancel closings due to the inability to obtain NFIP insurance for a mortgage. In other instances, builders were forced to stop or delay construction on a new home due to the lack of flood insurance approval, resulting in unnecessary delays and job losses.
NAHB supports a long-term extension of the NFIP.

The House has already passed a bipartisan five-year flood insurance reauthorization bill. A Senate version to extend the program for five years has not yet come to the Senate floor for a vote.

While both the House and Senate measures would keep the program running through 2016, significant differences remain between the two bills. Though NAHB strongly supports the House bill, the association has significant concerns with the Senate legislation and continues to work with senators to address these issues.

Established in 1968, the NFIP offers affordable flood insurance to more than 20,000 communities nationwide, and currently covers about 5.6 million policyholders.

Federal Judge Strikes Down “Ambush” Union Election Rule

When Woody Allen once said that “80% of life is just showing up,” he never dreamed his statement would be the basis for a federal judge to strike down a National Labor Relations Board (NLRB) ruling on union elections.

But that’s exactly what happened last week.

In a victory for NAHB and small businesses across the nation, U.S. District Judge James Boasberg on May 14 declared a new rule put forth by the NLRB to accelerate the union representation process is “invalid.”

At issue is the “ambush” election rule that would dramatically shorten the amount of time for an employer to organize a response to attempts to employees to unionize. Whereas previously an employer would have up to six weeks to prepare for a union election, the NLRB’s new procedure would compress the current average time from moving from petition to organize a union down to as little as 10 days.

The U.S. Chamber of Commerce filed a legal challenge seeking to overturn the NLRB rule, which went into effect on April 30.

Boasberg struck down the rule because only two members of the NLRB participated in the rulemaking vote, which was short of the three-person quorum needed to issue the new regulation.

In his ruling, Boasberg said: “According to Woody Allen, 80% of life is just showing up. When it comes to satisfying a quorum requirement, though, showing up is even more important than that. Indeed, it is the only thing that matters – even when the quorum is constituted electronically. In this case, because no quorum ever existed for the pivotal vote in question, the Court must hold that the challenged rule is invalid.”

Two Democratic NLRB members participated in the decision to adopt the rule but the board’s third member, Republican Brian Hayes, who was adamantly opposed to the rule, did not cast a vote. Since Hayes had previously voted against initiating the rulemaking and against proceeding with the drafting and publication of the final rule, the NLRB nevertheless determined that he had “effectively indicated his opposition.”

Since the court invalidated the rule for a lack of a quorum, it did not reach a decision based on the legality of the rule. So, the NLRB could again consider adopting this rule at a future date.

NAHB, the U.S. Chamber of Commerce and other organizations had previously urged Congress to overturn the rule, arguing that it would deprive employers of proper due process and deny them sufficient time to educate workers about the effects of unionization in the workplace.

Last month, NAHB sent a letter to senators in support of S. J. Res. 36, a resolution introduced by Sen. Mike Enzi (R-Wyo.) that would have prevented the rule from going into effect under the Congressional Review Act. The resolution failed on a near-party line vote.

NAHB will continue to work with Congress and business groups to keep the NLRB rule from going into effect.

To view the resolution, click here and type S. J. Res. 36 in the box in the upper center screen.

For more information on the legal ruling, email David Crump at NAHB or call him at 800-368-5242 x8491.

For more details regarding the congressional outlook on this issue, contact Suzanne Beall at x8407.

NAHB Redefines the Quality of Existing Housing Stock

Although most Americans are likely to view housing quality as important, few would describe it as a serious problem, especially compared to other troubles housing markets are currently confronting. This view of housing conditions in the U.S. is shaped largely by the Department of Housing and Urban Development’s (HUD’s) method for measuring the quality of homes, which classifies only about 1.5 percent as severely inadequate.

At a conference hosted by HUD in 2011, NAHB introduced an alternative way to identify inadequate units. Using the same data source as HUD, NAHB defined inadequate housing in a way that not only helps explain why prices and rents are sometimes lower than expected, but also classifies a much larger share of existing homes as physically inadequate. This suggests that some Americans—particularly renters—are trading adequacy for affordability, and implies that the need for programs to support the construction of new housing, or renovate older units, is greater than many policymakers realize.

NAHB’s work on “Housing Value, Costs, and Measures of Physical Adequacy” was published in March of 2012, in HUD’s research journal Cityscape. The findings reported by NAHB in Cityscape include the following:
  • Over 10 million homes in the U.S. are physically inadequate, about double the number usually reported as having even moderate problems. 
  • Much of the inadequate housing stock consists of single-family and older structures. 
  • Few owners and renters of inadequate units also have problems with housing affordability as conventionally defined, and therefore are a net addition to the count of Americans with housing problems. 
  • A large share—over 19 percent—of vacant single-family homes are physically inadequate, and so are not ready for full-time occupancy without substantial renovation and repair. 
Click here to read the article that describes NAHB's findings and explains how and why NAHB developed the new definition of inadequate housing. Details of a more technical nature can be found in the Cityscape article.

By the Numbers, NAHB's Priced Out Analysis: 431

Three years ago NAHB released an analysis that helps assess the impact of any action that increases the price of a new home.  This Spring NAHB updated that analysis, call the "Priced Out Effect," including an analysis by metro area.

Nationally, a $1,000 increase in the price of a home prices out 232,447 families from homeownership.  In Greenville, 431 families are priced out of homeownership by that same $1,000 price increase.

What can increase the price of a new home?  Many things including government regulation, increases in prices for materials and labor, and even crime.  One recent example is the efforts by the fire sprinkler industry to mandate automatic fire sprinklers in new homes.  Assuming a $6,000 increase in the price of a typical new home, the fire sprinkler mandate will price out 2,586 families from owning a new home in the greater Greenville area.

Tuesday, May 29, 2012

Greenville News: Poll Finds Homeownership Still the American Dream

A poll by TD Bank found that 56 percent of residents in the South consider Homeownership an essential part of the American Dream.  Sixty three percent said they plan to own a home in the near future.

Read the complete report at the Greenville News by clicking here.

FHFA: Mortgage Interest Rates Rise .03 Percent in April to 3.93 Percent

The Federal Housing Finance Agency (FHFA) today reported that the National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders, used as an index in some ARM contracts, was 3.93 percent based on loans closed in April. Beginning in March, FHFA is calculating interest rates using un-weighted survey data. There was an increase of 0.03 percent from the previous month.

The average interest rate on conventional, 30-year, fixed-rate mortgage loans of $417,000 or less increased 9 basis points to 4.21 in April. These rates are calculated from the FHFA’s Monthly Interest Rate Survey of purchase-money mortgages (see technical note). These results reflect loans closed during the April 24-30 period. Typically, the interest rate is determined 30 to 45 days before the loan is closed. Thus, the reported rates depict market conditions prevailing in mid- to late-March.

The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 3.93 percent in April, up 4 basis points from 3.89 percent in March. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.03 percent in April, up 10 basis points from 3.93 percent in March.

This report contains no data on adjustable-rate mortgages due to insufficient sample size.

Initial fees and charges were 0.90 percent of the loan balance in April, down 3 basis points from March. Twenty-one percent of the purchase-money mortgage loans originated in April were "no-point" mortgages, up one percent from the share in March. The average term was 27.3 years in April, matching the term in March. The average loan-to-price ratio in April was 75.3 percent, up 0.5 percent from 74.8 percent in March. The average loan amount was $256,200 in April, up $9,100 from $247,100 in March.