Thursday, December 5, 2013

Help! Your HBA needs you.

We need your help in reaching our goal to finish renovations on Martha’s home. Martha is making great strides in recovering from a gunshot wound that left her paralyzed from the waist down and will be returning home from a rehabilitation facility in time for Christmas. Please consider a cash contribution to the Martha Childress Housing Fund as the extent of the remodels is quite expensive, including the need for an elevator. Many have already donated their time and resources to work on the home, here are several pictures of work already completed.


All proceeds not spent on her housing needs will be donated to a fund for her ongoing health needs. Checks can be made payable to HBA of Greenville Attn: Martha Childress Fund, 5 Creekside Park Court Ste. A, Greenville, SC 29615.
If you have any questions, please contact the HBA office at or 
(864) 254-0133.

Home Building not dominated by large builders

Did you know that the top 10 public builders have just a 25 percent share of home building, and falling?  According to the National Association of Home Builders, the top 10 public builder market share over the last three years was:
  • 2010: 26.3 percent
  • 2011: 24.6 percent
  • 2012: 24.1 percent
Read a detailed report of the structure of the home building industry at Housing Economics by clicking here.

New Member Reception- TONIGHT!!

Join us for a New Member Orientation sponsored by Piedmont Natural Gas. Learn about the HBA of Greenville and meet other members as well as Board members. 
The New Member Orientation will be held at the HBA office (5 Creekside Park Court, Suite A, Greenville, SC). Please RSVP by Wednesday, December 3 by emailing or by calling the HBA office at (864) 254-0133.
We hope to see you there!

Wednesday, December 4, 2013

FHFA Index Shows Mortgage Interest Rates Decrease in October

National data show interest rates on mortgages interrupted their upward trend. Contract mortgage interest rates decreased 0.04 percent from September to October, according to an index of new mortgage contracts.

According to the Federal Housing Finance Agency (FHFA), the National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders index was 4.32 percent for loans closed in late October. The index is calculated using FHFA’s Monthly Interest Rate Survey. The contract rate on the composite of all mortgage loans was 4.32 percent, down 4 basis points from 4.36 in September.

Interest rates are typically locked in 30-45 days before a loan is closed. Consequently, October data reflect market rates from mid-to-late September. The effective interest rate was 4.49 percent, down 2 basis points from 4.51 percent in September. The effective interest rate accounts for the addition of initial fees and charges over the life of the mortgage.

FHFA’s interest rate survey shows the average interest rate on conventional, 30-year, fixed-rate mortgages of $417,000 or less was 4.58 in October, a decrease of 5 basis points. The average loan amount for all loans was $269,000 in October down $1,100 from $270,100 in August.

U.S. House Prices Rose 2.0 Percent in Third Quarter 2013

Upward momentum in U.S. house prices remained strong in the third quarter, as prices rose 2.0 percent from the previous quarter, according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI). This is the ninth consecutive quarterly price increase in the purchase-only, seasonally adjusted index and it marks the first time since 2009 that the national house price level is higher than it was five years ago.

“Overall, the housing market experienced another strong quarter, but price appreciation in the latter part of the quarter was relatively subdued,” said FHFA Principal Economist Andrew Leventis. “Price increases in August and September of 0.4 and 0.3 percent, respectively, were notably below appreciation rates observed earlier this year and in late 2012.”

The HPI is calculated using home sales price information from mortgages sold to or guaranteed by Fannie Mae and Freddie Mac. Compared with last year, house prices rose 8.4 percent from the third quarter of 2012 to the third quarter of 2013. FHFA’s seasonally adjusted monthly index for September was up 0.3 percent from August.

FHFA’s expanded-data house price index, a metric introduced in August 2011 that adds transaction information from county recorder offices and the Federal Housing Administration to the HPI data sample, rose 2.2 percent over the latest quarter. Over the last four quarters, that index is up 8.8 percent. For individual states, price changes reflected in the expanded-data measure and the traditional purchase-only HPI are compared on pages 21-23 of this report.

The seasonally adjusted, purchase-only HPI rose 8.4 percent from the third quarter of 2012 to the third quarter of 2013 while prices of other goods and services rose only 1.2 percent. The inflation-adjusted price of homes rose approximately 7.2 percent over the latest year.

Significant Findings:
  • The seasonally adjusted, purchase-only HPI rose in 48 states and in the District of Columbia during the third quarter. Top 5 in annual appreciation: 1) Nevada 2) California 3) Arizona 4) Florida and 5) Washington.
  • Of the nine census divisions, the Pacific division experienced the strongest increase in the latest quarter, posting a 4.2 percent increase and a 19.2 percent increase since last year. House prices were weakest in the East South Central division, where prices increased 0.8 percent from the prior quarter.
  • As measured with purchase-only indexes for the 100 most populated metropolitan areas in the U.S., third quarter price increases were greatest in the Stockton-Lodi, CA Metropolitan Statistical Area (MSA) where prices increased by 8.3 percent. Prices were weakest in the Virginia-Beach-Norfolk-Newport News, VA-NC MSA, where they fell 2.2 percent.
  • Over the past year, only 1 MSA —Winston-Salem, NC — had a negative appreciation rate and 11 of the 20 MSAs with the highest appreciation rates were in California.
  • The monthly seasonally adjusted purchase-only index for the U.S. has increased for the last 20 consecutive months.
Click here to read the complete report at

FHFA Announces Fannie Mae and Freddie Mac Conforming Loan Limits for 2014

The Federal Housing Finance Agency (FHFA) today announced that the 2014 maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac will remain at $417,000 for one-unit properties in most areas of the country.

The conforming loan limit in all markets in South Carolina is $417,000.

The Housing and Economic Recovery Act of 2008 (HERA) establishes the maximum conforming loan limit that Fannie Mae and Freddie Mac are permitted to set for mortgage acquisitions. HERA also requires annual adjustments to these limits to reflect changes in the national average home price.

A description of the methodology used in determining the loan limits can be found in the attached addendum. Questions concerning the conforming loan limits can be addressed to

Further information on potential future changes in the maximum size of loans that Fannie Mae and Freddie Mac guarantee will be forthcoming.

Link to maximum conforming loan limits for 2014.

At IBS, Learn about Cash to Finance Your Projects

How do you improve on an International Builders’ Show education session on builder financing that last year topped 400 attendees? Rick Mandell, moderator for “How to Cash in on the New Wave of Capital,” has a plan.

This year, he’s added case studies so that panelists concentrating on both debt and equity financing can point to real-life solutions and get builders to “think like the money thinks,” he said.

While more money is beginning to become available to finance home building and development projects, home builders need a clearer understanding of how finance has changed and how to be successful in the post-Great Recession environment.

Builders who seek financing and can explain their objectives in terms that the investors can understand will find a more receptive welcome from private and equity investors looking to see how their investment will turn a profit.

The panel discussions and case studies will conclude with opportunities for individual conversations with potential investors. Even if those investors aren’t active back home in the builder’s own market, “at least [the builder] know how to speak the language” to get non-traditional investors interested in their projects, Mandell said.

Learn more about the Feb. 5 three-hour master session here.

Building Permits Top 1 Million in October

Issuance of new building permits rose 6.2 percent to a seasonally adjusted annual rate of 1.034 million units in October due primarily to a double-digit increase on the multifamily side, the U.S. Census Bureau reported today.

This follows a 5.2 percent increase in permit issuance in September to 974,000 units.

Census figures for nationwide housing starts for September and October have been delayed until Dec. 18 as a result of last month’s partial government shutdown.

“Despite the recent government shutdown, builders feel a housing recovery is still under way,” said Rick Judson, chairman of the National Association of Home Builders and a home builder from Charlotte, N.C. “However, this fragile recovery still faces a number of challenges, including uncertainty in Washington, tight credit conditions for home buyers and limited availability of labor and lots.”

“Permits are often a harbinger of future housing activity and the strong showing in the multifamily sector along with stable numbers on the single-family side bode well for a continuing, gradual upturn in housing over the coming months,” said senior economist Robert Denk. “But consumer and builder confidence could be seriously undermined unless policymakers make progress over looming budget, tax and economic policy issues in the weeks and months ahead.”

Multifamily permit issuance rose 15.3 percent to 414,000 units in October while the single-family side posted a 0.8 percent gain to 620,000 units.

Regionally, permits issuance in October held steady at 101,000 units in the Northeast and rose 15.4 percent in the West and 9.4 percent in the South. The Midwest posted a 9.6 percent decline.

Here is the Lowdown on Thwarting Low Appraisals

Although stabilizing home values and modest price increases across much of the land are fueling a housing upturn, the recovery still remains tenuous in part because a flawed appraisal process continues to thwart accurate valuations on new homes.

Your Home Builders Association has made it a priority to enact major reforms so that appraisals reflect accurate home values and do not needlessly kill home sales.

Too often, due to faulty appraisal practices, home sales have come in below a contract sales price and brand-new homes with state-of-the art appliances and interior upgrades have been compared to distressed properties. In some cases, this has led to a new home getting appraised at less than the construction cost.

So how can builders fight back against low appraisals and win back sales?

Builder-members who have successfully navigated through the appraisal process offer the following suggestions:

Share data with the appraiser. Builders should provide all relevant data to appraisers, including plans and specifications of the property, information on how their product differs from their competitors, a list of energy-efficiency features in the home, details on materials that were chosen, and the buyers’ reaction to products selected. Builders cannot talk about the specific value of the home, but they can give the appraiser factual information that is verifiable.

Insist on a qualified appraiser. Use lending institutions that hire competent appraisers. If an appraisal assignment goes to an appraiser who you know is unfamiliar with your geographic area, insist that the lender switch to an appraiser who knows the area.

Request an appraiser who is familiar with new construction and/or energy-efficient construction.

Keep a detailed record of data provided to the appraiser (email, notes in calendar, etc.).

Engage with the lender and provide the facts. Nothing prevents a lender from ordering a second appraisal if the first appraisal appears flawed.

Be present during the appraisal. A builder can answer any questions the appraiser has during appraisal of the property and also point out added features, amenities and products that make the house stand out from others in the market.

Stage the property. Just like a buyer looking at an open house, an appraiser is likely to look more favorably on a home that exhibits curb appeal and is clean, clutter-free and move-in ready.

Employ the Tidewater Initiative. This little-known rule at the Department of Veterans Affairs states that if the appraiser determines that the value will come in lower than the sales price, he is required to halt the appraisal before it is completed and make the lender aware of the value coming in below the sales price. This allows any party to the transaction, including the builder, to provide additional information in support of the sales price. Since this is done at the VA, a builder can ask any lender to consider this policy without violating current regulations.

Valuing Green Homes for What They are Worth
Too many appraisals of homes with green features are being conducted by appraisers who simply aren’t trained to recognize the features and adjust valuations accordingly.

One builder and remodeler, Matt Belcher of Hibbs Homes in Wildwood, Mo., came up with a simple solution when he ran into this problem.

Belcher (who certifies his projects to the ICC 700 National Green Building Standard and other sustainability programs) developed relationships with several local lenders who all agreed to require that any appraiser assigned to his projects had undergone training, such as that offered by the Appraisal Institute, to become qualified to appraise high-performance homes.

Belcher also developed a sales contract clause for situations where the buyers prefer to select different lenders. The language, which has been reviewed and enhanced by the Appraisal Institute, states:

“This Home is being built/renovated/updated to nationally recognized standards above prevailing code. It is designed and constructed with unique features and materials and with high-efficient equipment and in accordance with high-efficiency standards. The Lender shall choose an Appraiser educated and knowledgeable in this type of valuation of these specialized Homes, preferably an appraiser who holds a professional appraisal designation that requires advanced education on such issues as the valuation of sustainable buildings (e.g., MAI or SRA designations from the Appraisal Institute). The appraiser shall provide verification of green valuation education of 14 hours or more from a qualified educational provider and knowledge to be permitted to conduct the appraisal for this project.”

The requirement seems to be working. After one recent episode in which Belcher thought the project was undervalued, he used the clause to request another appraisal from the lender, this time to be done by a person whose qualifications he could verify. The second appraisal came back reflecting a value that was much more appropriate.

Builders and remodelers who face green appraisal challenges are encouraged to refer to the NAHBGreen Toolbox: Overcoming Appraisal Challenges for additional ideas.

Your HBA Leads the Way
Your Home Builders Association has taken a leadership role on appraisal issues by bringing industry stakeholders and regulators to the table at five summit meetings that it has conducted at the National Housing Center in Washington, D.C.

Your Home Builders Association has also adopted policy on appraisals that calls for:
  • Strengthening education, training and experience requirements for appraisers of new construction.
  • Improving the quantity and quality of data for new construction.
  • Developing new appraisal standards and best practices for conducting appraisals in distressed markets.
  • Developing a process for expedited appeals of inaccurate or faulty appraisals.
  • Strengthening oversight of appraisal activities.
Moreover, your HBA has developed an appraisal white paper, “A Comprehensive Blueprint for Residential Appraisal Reform,” that the association uses in its advocacy efforts with Congress, regulators, appraisers, lenders and other relevant stakeholders. The white paper calls for reforms and recommendations that will:
  • Streamline and coordinate the current regulatory framework and devote adequate resources to ensuring effective oversight and enforcement.
  • Create a real estate data “superhighway” with a national real property registry and supporting networks.
  • Reaffirm and streamline key appraisal principles contained in the Uniform Standards of Professional Appraisal Practice.
  • Establish uniform credentialing standards specific to each area of appraisal practice.
  • Enact a consistent set of rules and guidelines for appraisals.
  • Consider all three valuation approaches – cost, income and sales comparison.
  • Develop a dispute resolution process for expedited appeals of inaccurate or faulty appraisals.
  • Establish a standard and a process to get the best appraisers for each assignment.
Resources for Home Builders
Your Home Builders Association has also developed excellent resources to help its members successfully navigate the appraisal process. These include:
  • A two-page summary for members on how to build stronger and more productive relationships with appraisers.
  • A “Builders Guide to Appraisals” webinar, which is available here. The webinar features a panel of home builder and appraisal practitioners who discuss appraisal rules and provide advice to help builders improve the accuracy of their home valuations.
  • An Appraisal Primer that provides a detailed overview to help NAHB members better understand the appraiser’s role in the financing of new homes.
To learn more, go to

NAHB International Builders' Show

The NAHB International Builders’ Show (IBS) is the largest annual light construction show in the world, and this year, attendees will have access to the exhibit floors of two of the biggest tradeshows for design and construction professionals! Join us for IBS February 4-6, 2014 in Las Vegas!

Enjoy a free 3-day exhibit pass, courtesy of 2-10 Home Buyers Warranty. IBS will be co-located with The Kitchen & Bath Industry Show, launching the first annual Design & Construction Week and you won't want to miss it!

Click here to register for your free pass. For more information about the NAHB International Builders' Show, click here.

Multifamily leads housing recovery

A large chunk of the credit for our improving economy belongs to multifamily construction. Since hitting a trough of 111,000 multifamily permits in October 2009, multifamily activity has quickly recovered. This past October there were 418,000 multifamily permits pulled, an amazing 73% of the permits pulled in March 2006, the single best month since the late 1980s. If single-family were doing that well, we'd be at 1.3 million SF permits.

Elliot F. Eisenberg, Ph.D.
GraphsandLaughs, LLC  

Tuesday, December 3, 2013

OSHA's 2013 TOP TEN Most Frequently Cited Violations

The following is a list of the top 10 most frequently cited standards* following inspections of worksites by federal OSHA. OSHA publishes this list to alert employers about these commonly cited standards so they can take steps to find and fix recognized hazards addressed in these and other standards before OSHA shows up. Far too many preventable injuries and illnesses occur in the workplace.
  1. 1926.501 - Fall Protection (Construction Standard)
  2. 1910.1200 - Hazard Communication
  3. 1926.451 - Scaffolding (Construction Standard)
  4. 1910.134 - Respiratory Protection
  5. 1910.305 - Electrical, Wiring Methods
  6. 1910.178 - Powered Industrial Trucks
  7. 1926.1053 - Ladders (Construction Standard)
  8. 1910.147 - Lockout/Tagout
  9. 1910.303 - Electrical, General Requirements
  10. 1910.212 - Machine Guarding
*As of 10/25/13

Monday, December 2, 2013

FHFA Announces Overhaul of Fannie Mae and Freddie Mac Mortgage Insurance Master Policy Requirements

The Federal Housing Finance Agency (FHFA) today announced that Fannie Mae and Freddie Mac have completed the first major overhaul of mortgage insurance master policy requirements in many years. FHFA’s 2013 Conservatorship Scorecard calls for Fannie Mae and Freddie Mac to develop aligned requirements for master policies.

Through this ongoing effort, Fannie Mae and Freddie Mac, with FHFA oversight, have worked with the mortgage insurance industry to address and update gaps in the existing master policy framework. The new requirements will, among other things, facilitate timely and consistent claims processing.
Key improvements include:
  • Loss mitigation – requires that master policies support various loss mitigation strategies that were developed during the housing crisis to help troubled homeowners. 
  • Claims – establishes specific timeframes for processing claims, including requests for
    additional documentation. 
  • Assurance of coverage – sets standards for determining when, and under what circumstances, coverage under the mortgage insurance policy must be maintained and when it may be revoked. Enhanced communication – promotes information sharing among mortgage insurers, servicers and Fannie Mae and Freddie Mac.
“Updating the mortgage insurance master policy requirements is a significant accomplishment for Fannie Mae and Freddie Mac,” said FHFA Acting Director Ed DeMarco. “The new standards update and clarify the responsibilities of insurers, originators and servicers and they enhance the insurance protection provided to Fannie Mae and Freddie Mac, which ultimately benefits taxpayers.”

Mortgage insurance master policies specify the terms of business interaction between seller-servicers and mortgage insurers.  Mortgage insurers will incorporate the aligned requirements into new master policies, which will be filed with state insurance regulators for their review and approval.  FHFA, Fannie Mae and Freddie Mac anticipate that the master policies will go into effect in 2014, pending review and approval by state insurance regulators.  In the coming weeks, Fannie Mae and Freddie Mac will provide guidance to lenders and servicers regarding specific effective dates.

One fifth of all new housing is infill

Did you know: 21 percent of all new housing is infill development?

Source: Builder