Friday, February 22, 2013

NAHB: Top 12 Accomplishments, Number 7: Member Ecoomic Toolkit

Builder Review Daily is highlighting the top 12 actions taken on behalf of Home Builders so far this Spring.

Accomplishment number 7: Providing Specialized Resource Toolkits to Help NAHB Members Position Their Businesses for the Economic Recovery

As directed by Chairman Barry Rutenberg earlier this year, NAHB has compiled a series of resources designed to help our members position their businesses to succeed and thrive as the economic situation improves. From guidance on improving how you build and sell homes, to general business management tactics, to briefings on specific issues such as appraisals, AD&C lending and more, the Rebounding Success Toolkits bring together the expertise of the NAHB federation in one comprehensive online resource.

Here's what's available to you with a click of your mouse:

Land Use 101 Toolkit - This toolkit helps members of the building industry to understand and deal with new federal programs under the Sustainable Communities Initiative and other land use issues. It provides tools to help HBAs and members get involved early in such reform efforts to ensure that their perspectives and experience are represented and that proposed new policies are based on evidence, not just theory.

Building Homes 101 Toolkit - This toolkit contains valuable information to help builders respond to the adverse shift in terms and availability of construction financing, access and evaluate various building products, avoid common pitfalls of certain building techniques, and take advantage of new green building options to appeal to today's buyers.

Selling Homes 101 Toolkit - This toolkit provides tips and tactics to successfully market yourself and your homes, including important information on obtaining more accurate appraisals, ways to educate consumers on the benefits of homeownership, and more.

Business Management 101 Toolkit - This toolkit provides important resources to help you manage your business more effectively and increase your profits. Its offerings cover strategic planning, financial management, marketing and sales, construction management, information technology and more. 

NAHB: Top 12 Accomplishments 2012, Number 6: HUD Fair Market Rent

Builder Review Daily is highlighting the top 12 actions taken on behalf of Home Builders so far this Spring.

Accomplishment number 6: Providing Recommendations That Were Implemented Within HUD’s Proposal on Fair Market Rent
In releasing its proposed fair market rents (FMRs) for fiscal year 2013, HUD employed several important NAHB recommendations that should help to avoid large and unpredictable changes in the future.

The new FMRs, which are scheduled to be implemented on Oct. 1, are used to determine payment standards for the Housing Choice Voucher program, to determine initial renewal rents for some expiring project-based Section 8 contracts, to determine initial rents for housing assistance payment contracts in the Moderate Rehabilitation Single Room Occupancy program, and to serve as rent ceilings for the HOME program.

Because housing costs are variable, HUD needs to publish FMRs for each local market area in the country every year. In proposing its latest FMRs, HUD used a new trend factor recommended by NAHB, which is based on the average rent changes in the American Community Survey between 2005 and 2010. NAHB believes this change is highly desirable to avoid large, unpredictable and difficult to manage swings in local FMRs. Also per NAHB’s suggestion, HUD made changes for calculating its “recent mover factor,” which compensates for rent data that does not distinguish recent movers from other tenants. The overall effect on the 2013 FMRs was an average increase of 5.7% across the 524 metropolitan FMR areas (excluding Guam and Puerto Rico) with actual declines limited to 90 of these metro FMR areas. 

Builder Confidence Virtually Unchanged in February

Builder confidence in the market for newly built, single-family homes was virtually unchanged in February with a one-point decline to 46 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.

“Following solid gains over the past year, builder confidence has essentially leveled out and held in the same three-point range over the last four months,” noted NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “This is partly due to ongoing uncertainties about job growth and consumer access to mortgage credit, but it’s also a reflection of the fact that builders are now confronting rising costs for building materials and, in some markets, limited availability of labor and lots as demand for new homes strengthens.”

“Having risen strongly in 2012, the HMI hit a slight pause in the beginning of this year as builders adjusted their expectations to reflect the pace at which consumers are moving forward on new-home purchases,” observed NAHB Chief Economist David Crowe. “The index remains near its highest level since May of 2006, and we expect home building to continue on a modest rising trajectory this year.”

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.

Holding above the critical mid-point of 50 for a third consecutive month, the HMI component gauging current sales conditions fell by a single point to 51 in February. Meanwhile, the component gauging sales expectations in the next six months rose by one point, to 50, and the component gauging traffic of prospective buyers slipped four points, to 32.

Three-month moving averages for each region’s HMI score were mixed in February, with the Northeast up three points to 39 and the West up four points to 55 and the Midwest and South each down two points, to 48 and 47, respectively.

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

Housing Starts Down on Typical Multifamily Volatility; Permits Hit Four-Year High

Due to a double-digit dip on the typically volatile multifamily side, nationwide housing starts declined 8.5 percent to a seasonally adjusted annual rate of 890,000 units in January, according to newly released data from HUD and the U.S. Census Bureau. Meanwhile, issuance of permits for new-home construction rose 1.8 percent to 925,000 units – the quickest pace since mid-2008.

“Steady demand for new homes is prompting builders to put more construction crews back to work in order to replenish thin supplies of completed product,” noted Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C. “We expect this progress to continue through the spring buying season and beyond, with credit availability and poor appraisals being the primary limiting factors.”

“Today’s report is quite positive in that it shows continued upward movement in single-family housing production and permitting activity for both single- and multifamily units,” noted NAHB Chief Economist David Crowe. “Meanwhile, the decline in multifamily starts reflects an adjustment from an unsustainably large gain in December, and is consistent with the up-and-down swings that are often associated with that sector.”

In January, single-family housing starts were virtually unchanged from an improved pace in the previous month, registering a 0.8 percent gain to 613,000 units. This was the strongest pace of single-family housing production since July 2008. Meanwhile, multifamily housing starts, which tend to display significant month-to-month volatility, declined 24.1 percent to 277,000 units.

Regionally, combined single- and multifamily housing production gained 4.1 percent in the South and 16.7 percent in the West, but fell 35.3 percent in the Northeast and 50 percent in the Midwest in January.

Permit issuance, which can be an indicator of future building activity, rose 1.9 percent on the single-family side to a seasonally adjusted, annual pace of 584,000 units and rose 1.5 percent on the multifamily side to a 341,000-unit pace in January. Both were the strongest permit numbers seen since mid-2008.

Permitting activity rose in three out of four regions in January, with a 10.1 percent gain registered in the Northeast, a 1.4 percent gain registered in the Midwest and a 1.1 percent gain registered in the South. The West posted virtually no change in permitting activity, with a 0.5 percent decline.

NAHB Study Reveals What Home Buyers Really Want

The housing downturn of the last few years 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. Builders and other industry professionals now have an opportunity to find out what home buyers really want and will not give up in today’s market, as well as which features they are ready to leave behind in light of current economic realities with a new publication from the National Association of Home Builders (NAHB).

NAHB’s publishing arm, BuilderBooks, recently released What Home Buyers Really Want, a study which outlines home buyers’ preferences for home type and size, room layout and design, kitchen and baths, windows and doors, accessibility and outdoor features, electronics and technology in the home, energy efficiency and choosing a community.

The study was conducted by NAHB’s Economics and Housing Policy Group in 2012, based on a survey of home buyers nationwide. Results from the study are available by age, income, race and Census division, among other demographic characteristics.

“This survey is a great resource for building professionals, as it provides an inside look at the things home buyers really want or don’t want in their homes,” said Rose Quint, NAHB’s Assistant Vice President for Survey Research, and one of the study’s authors. “With the housing market beginning to recover, and more consumers in the position to purchase a home, it is more important than ever for builders to be armed with this information.”

What do home buyers really want?
  • First and foremost, energy efficiency. Some of the most wanted features involve saving energy, i.e. energy-star rated appliances and windows, and an energy-star rating for the whole home. Nine out of ten buyers would rather buy a home with energy-efficient features and permanently lower utility bills than one without those features that costs 2 percent to 3 percent less.
  • Home buyers also want help with organization and storage. Large majorities want a laundry room, a linen closet in the bath, garage storage and a walk-in pantry.
What do most buyers not want?
  • An elevator – 70 percent would be unlikely to buy a home with this feature.
  • High density communities or golf courses.
  • Only a shower stall (no tub) in the master bath.
On Wednesday, March 6 at 2:00 pm EST, NAHB will host a webinar to discuss the findings of the survey. What Home Buyers Really Want is available only as an e-Book at for $149.99 Retail or $49.99 for NAHB Members.

Nationwide Housing Affordability Increases at Year-End 2012

Exceptionally low interest rates helped ensure a slight gain in nationwide housing affordability amid relatively stable house prices in the final quarter of 2012, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), released today.

In all, 74.9 percent of homes sold between the beginning of October and end of December were affordable to families earning the U.S. median income of $65,000. This was up nearly a percentage point from the 74.1 percent of homes sold that were affordable to median-income earners in last year’s third quarter.

In the Greenville MSA, 84.8 percent of homes sold were affordable to families earning the area median of $59,000.  The average price of a new home was $146,000.  The index was up 1.6 percentage points from 83.2 in the third quarter, and nearly matches the high of 85.9 in the first quarter of 2004.

“The most recent housing affordability data should be encouraging to many prospective home buyers, because it shows that homeownership remains within reach of median-income consumers even as most local markets appear to be on a recovery path,” said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. He noted that the most recent reading of the NAHB/First American Improving Markets Index found that 259 out of 361 metros currently qualify as improving, including representatives from all 50 states and the District of Columbia.

“The median price of all new and existing homes sold in the fourth quarter of 2012 was $188,000, essentially unchanged from the previous quarter’s $189,000 that marked a nearly three-year high,” noted NAHB Chief Economist David Crowe. “It is noteworthy that affordability remains historically high thanks to favorable mortgage rates even as national home price indexes show some rise in values."

Ogden-Clearfield, Utah held its position as the nation’s most affordable major housing market for a second consecutive quarter at the end of 2012. There, 93.7 percent of all new and existing homes sold were affordable to families earning the area’s median household income of $71,500 – up slightly from the 93.2 percent of homes affordable to median-income earners in the third quarter.

Also ranking among the most affordable major housing markets in respective order were Dayton, Ohio; Indianapolis-Carmel, Ind.; Lakeland-Winter Haven, Fla.; and Syracuse, N.Y.

Among smaller housing markets, Fairbanks, Alaska, remained at the top of the affordability chart with nearly all homes sold in the quarter -- 99.6 percent – affordable to those earning the median income of $92,900. Other small housing markets at the top of the index included Cumberland, Md.; Springfield, Ohio; Monroe, Mich.; and Mansfield, Ohio, in that order.

After 18 consecutive quarters at the bottom of the affordability chart, New York-White Plains-Wayne, N.Y.-N.J. switched places with San Francisco-San Mateo-Redwood City, Calif., which had been the second-to-least affordable market. Just 28.4 percent of homes sold in San Francisco during the fourth quarter were affordable to families earning that area’s median income of $103,000.

Other major metros at the bottom of the affordability chart included Santa Ana-Anaheim-Irvine, Calif.; Los Angeles-Long Beach-Glendale, Calif.; and Honolulu, Hawaii, in that order.

The least affordable small housing market in the fourth quarter was Ocean City, N.J., where just 43.5 percent of homes sold were within reach of families earning the median income of $71,100. Other small metros at the bottom of the affordability chart included San Luis Obispo-Paso Robles and Santa Cruz-Watsonville, Calif., followed by Dover, Del., and Santa Barbara-Santa Maria-Goleta, Calif., respectively.

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 the area’s median income during a specific quarter. Prices of new and existing homes sold are collected from actual court records by Core Logic, a data and analytics company. Mortgage financing conditions incorporate interest rates on fixed- and adjustable-rate loans reported by the Federal Housing Finance Agency.

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.