How houses are homes, even in a disaster area

By Dr. Elliott Eisenberg, Senior Economist, NAHB

Recently I was to give a talk about the economic impact of home building in Joplin, MO. However, a few hours before I landed a devastating tornado destroyed 2,000 buildings and heavily damaged one-third of the city including the hospital, high school and many neighborhoods. In all, over 120 persons were killed. After a harrowing flight from Chicago filled with turbulence, lightning and the darkest clouds this east coast economist has ever seen it was great to land. I was, however, so shaken from the flight and from what I saw I was unable to articulate a cogent thought and putting one foot in front of the other was about all I could do.

Interestingly, this was my second recent frightening run-in with Mother Nature. About 10 weeks ago I was on the Oregon coast having given a talk at an HBA there. At 5:30 the next morning I was woken by the hotel manager and informed that there was a tsunami warning and that I might wish to evacuate; needless to say, I did. Luckily that warning was unnecessary. In Japan, however, it was a very different story.

To me the most poignant part of natural disasters is hearing survivors talk gallantly about rebuilding their destroyed homes and neighborhoods. No one cries about a car, boat, iPhone or credenza that was destroyed; they are all easily replaced. Yet, people regularly weep when surveying the wreckage of their destroyed home. This is because homes are repositories of memory and because homes speak to the importance of place. And our place and our memories intimately revolve around our homes. Thus, the profound desire to rebuild even though moving away is so much easier.

Joplin has suffered immense physical and psychological damage. It is now our turn, the turn of the home builders, to help make these communities whole and give them back part of what was brutally taken from them. In my speeches as an economist I regularly point out the number of jobs created and the amount of tax revenue generated by home building. But, to be honest, that misses the bigger point. What rebuilding homes in Joplin and New Orleans and Memphis does is offer people and communities hope about the future, comfort that they are part of it, and validation of their lives.

The next time I give a speech I will make these points, I will share this story and I will be more proud to be part of this great industry than I have ever been.

Editor's Note: Elliot Eisenberg, Ph.D. is an economist with the NAHB and looks forward to hearing from you. He has spoken to the HBA of Greenville twice in recent years and delivered good news about the impact of housing on our local economy. He can be reached at 202.266.8398 or by email at eeisenberg@nahb.org.

Dr. Eisenberg was set to speak on Monday to HBA members in Joplin, MO. He was intercepted by the Executive Director of the Springfield, MO, HBA before he finished his trip and arrived in the disaster zone. His is a story about how HBA members and staff come together to help one another.

The HBA office in Joplin is undamaged and will reopen May 24. However, two of 14 HBA board members in Joplin are homeless.

You can help by contributing to NAHB's Disaster Relief Fund.

Federal Housing Finance Agency Reports Mortgage Interest Rates

The Federal Housing Finance Agency 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 4.80 percent based on loans closed in April. This is a decrease of 0.04 percent from the previous month. Complete data can be found at www.fhfa.gov by clicking here.

The average interest rate on conventional, 30-year, fixed-rate mortgage loans of $417,000 or less decreased 7 basis points to 4.99 percent 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 25-29 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 4.80 percent in April, down 4 basis points from 4.84 percent in March. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.93 percent in April, down 5 basis points from 4.98 percent in March. This report contains no data on adjustable-rate mortgages due to insufficient sample size.

Initial fees and charges were 0.88 percent of the loan balance in April, down 0.07 percent from 0.95 in February. Twenty-eight percent of the purchase-money mortgage loans originated in April were "no-point" mortgages, up from 25 percent in March. The average term was 27.8 years in April, up 0.2 years from 27.6 years in March. The average loan-toprice ratio in April was 75.8 percent, up 0.3 percent from 75.5 percent in March. The average loan amount was $204,400 in April, down $4,200 from $208,600 in March.

To read this press release at www.fhfa.gov, click here.

Addison Homes earns national green advocate honor

Addison Homes earned the Green Building Advocate of the Year award from the National Association of Home Builders for its sustainable building practices. Only 13 building industry professionals nationwide received this award. Addison Homes builds all of its homes to Energy Star and EarthCraft House standards.

“Building to environmentally-friendly standards is about more than just saying you’re ‘green,’” Addison Homes President Todd Usher said. “This is a way to provide healthier, more comfortable and more durable homes with the added perk of reduced utility and maintenance bills.”

Todd Usher, GMB, Master CGP, CAPS, past president of HBA of Greenville, and Michelle Usher, co-owners of Addison Homes, educate the community on sustainability-related educational programs, ranging from consumer seminars on energy-efficient homes to children’s workshops featuring conservation projects. The couple’s volunteer outreach includes supporting high-performance standards for the local Habitat for Humanity.

“We are committed to increasing awareness about the very practical benefits of sustainable building techniques,” Usher said.

NAHB announced the Advocate of the Year and other awards during the 13th annual National Green Building Conference earlier this month in Salt Lake City, Utah.

HBA Government Affairs Forum will Feature Greenville County Administrator and Assistant Administrator

The next Government Affairs Forum will feature Greenville County Administrator Joe Kernell and Assistant Administrator for Public Works Paula Gucker.

• What: Government Affairs Forum
• When: Thursday, May 19, 8:30 a.m.
• Where: HBA of Greenville Office
• Speakers: Joe Kernell, Greenville County Administrator, and Paula Gucker, Assistant Administrator for Public Works
• Sponsorship is Available
• Continental Breakfast will be Served
  

The Government Affairs Forum is hosted by the HBA of Greenville Legislative Committee. It provides a forum for HBA members and government officials to meet and discuss public policy issues that affect the Home Building Industry. Any HBA member is invited to attend and participate.

To register for the Government Affairs Forum, click here.

South Carolina House Passes Point of Sale Bill

The South Carolina House on Wednesday approved the "Point of Sale" bill. The vote was close, 64 to 51.

Current law, which was last changed in 2006, requires all homes that are sold to be reassessed immediately. The Point of Sale delays reassessment of existing homes to the next regular reassessment cycle. However, newly constructed homes will still be reassessed when they are sold.

The bill new heads to the Senate for consideration.

Legislature passes legislation that reverses ruling in Crossman Communities v. Harleysville Insurance

UPDATE: Governor Nikki Haley signed S.431, "the Crossman Bill," into law on Tuesday, May 17. The new law is meant to take away the ability of the South Carolina Supreme Court now, and insurers in the future, to read a fortuity requirement into the definition of occurrence in the 1986 CLG policy form.

The South Carolina General Assembly this week gave final approval to legislation that reverses the South Carolina Supreme Court decision in Crossman Communities v. Harleysville Insurance. The decision effectively rendered useless most Home Builders' general liability insurance policies.

Governor Nikki Haley took an active role in brokering a compromise between the insurance and construction industries.

The legislation now heads to the Governor's desk for her signature.

You can read more about the legislation at GSA Business by clicking here.

Cash in with the Remodeling Outlook Webinar

• Thursday, May 26, 2:00 p.m. – 3:00 p.m. (EDT) NAHB Remodelers presents a special webinar: “Remodeling Outlook Webinar”

NAHB will offer a webinar on the outlook for remodeling nationally. This program features experts David Crowe, NAHB chief economist, and Kermit Baker, director of the Remodeling Futures Program at Harvard University’s Joint Center for Housing Studies, for their presentation of the latest remodeling market forecast.

NAHB’s forecasting information is crucial to planning for any business. Educational opportunities like this help to make businesses more profitable and meet the changing needs of their clients. We hope you’ll join us for this revealing remodeling market webinar.

To register, visit www.NAHB.org.