Economists to Discuss Housing Outlook at Upcoming Webinar

Crystal balls and magic 8 balls will not be used. Rather, industry experts will rely on hard data, notable trends and key insights as they discuss the housing outlook for 2016 and beyond during the Fall Construction Forecast Webinar.

NAHB will host the semi-annual event tomorrow Wednesday, Oct. 21, from 2-4 p.m. ET. Leading economists and finance experts will examine some of the most pressing issues in housing, including:

• Predictions of housing’s path in 2016-17
• Hurdles regarding labor and land shortage
• Changes in demographics and demand
• Actions and impacts of the Federal Reserve

During the webinar, NAHB chief Economist David Crowe, NAHB chief economist, will break down complex concerns impacting the building industry. Robert Denk, NAHB’s assistant vice president for forecasting and analysis, will then present a state-by-state analysis of key areas such as housing prices, starts and employment.

Trulia Housing Economist Ralph McLaughlin will also join as a special guest. McLaughlin’s specialties include housing economics, land use and housing policy, and industrial geography.

Participants will be able to submit their questions online throughout the webinar.

For more information and to register, go to nahb.org.

Builder Confidence on the Rise in October

Builder confidence in the market for newly constructed single-family homes rose three points in October to a level of 64 on the NAHB/Wells Fargo Housing Market Index (HMI). This month’s reading is a return to HMI levels seen at the end of the housing boom in late 2005.

“The fact that builder confidence has held in the 60s since June is proof that the single-family housing market is making lasting gains as more serious buyers come forward,” said NAHB Chairman Tom Woods. “However, our members continue to tell us there are still pockets of softness in some markets across the nation, and that they face challenges regarding the availability of lots and labor.”

“With firm job creation, economic growth and the release of pent-up demand, we expect housing to keep moving forward as we start to close out 2015,”said NAHB Chief Economist David Crowe. 

Derived from a monthly survey that NAHB has been conducting for 30 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 for 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.

Two of the three HMI components posted gains in October. The index measuring sales expectations in the next six months rose seven points to 75, and the component gauging current sales conditions increased three points to 70. Meanwhile, the index charting buyer traffic held steady at 47.

Looking at the three-month moving averages for regional HMI scores, all four regions posted gains. The West registered a five-point uptick to 69 while the Northeast, Midwest and South each rose one point to 47, 60 and 65, respectively.

A Renewed Push for Housing Finance Reform

In an effort to advance housing finance reform that will provide certainty and stability to the nation’s financial markets and promote job and economic growth, NAHB has updated its 2012 white paper on this key housing issue.

Why Housing Matters: A Comprehensive Framework for Housing Finance System Reform reflects market developments since 2012 and retains the central tenet of NAHB’s housing finance system reform policy – the creation of a new securitization system for conventional mortgages backed by private capital and a privately funded mortgage-backed insurance fund with a federal government backstop in the event of catastrophic circumstances.

NAHB supports comprehensive finance reform based on the bipartisan Johnson-Crapo bill (S. 1217) approved by the Senate Banking Committee in the last Congress that would gradually transition Fannie Mae and Freddie Mac into a private-sector-oriented system, where the federal government’s role is clear, but its exposure is limited.

The home building industry’s ability to meet the demand for housing and contribute significantly to the nation’s economic growth depends on an efficient housing finance system. However, years after the fact, home buyers and builders continue to confront challenging credit conditions triggered by an overzealous regulatory response to the Great Recession.

While there are many reasons Congress and federal regulators must tackle housing finance reform, some stand out as compelling:

1. The Housing Act of 1949 pledged a “decent home and a suitable living environment for every American family.” That principle remains a bedrock for Americans, although delivering on the promise is more difficult in 2015 and beyond.
2. Homeownership has been the most effective step on the ladder into the middle class and to create wealth for most Americans since the 1950s, and continues to fill that role while also fulfilling the promise of the Housing Act of 1949.
3. Housing is “made in America.” The jobs that home building creates cannot be shipped overseas. Most of the products used in home construction are manufactured here in the U.S. and directly correlate to American manufacturing jobs at all levels.
4. A reformed national housing finance policy supports the Housing Act of 1949’s goals. Equally important, fixing an inefficient housing finance system that lacks effective financial safeguards for the nation’s housing and mortgage markets will markedly reduce the probability of triggering another catastrophic Great Recession.

NAHB will continue to work diligently with policymakers to advance housing finance reform that will maintain an appropriate level of government support to preserve financial stability, encourage private capital back into the marketplace and ensure liquidity and stability for homeownership and rental housing.

View the NAHB white paper on housing finance system reform.

FHFA Adopts Affordable Housing Goals for Fannie Mae, Freddie Mac

The Federal Housing Finance Agency (FHFA) announced today it has adopted a final rule establishing single-family and multifamily housing goals for Fannie Mae and Freddie Mac for 2015 through 2017.

The final rule sets identical benchmarks for Fannie Mae and Freddie Mac in all categories and for the first time it establishes goals for rental units affordable to low-income families in small (5- to 50-unit) multifamily properties.

“The single-family goals advance the Enterprises’ (Fannie Mae and Freddie Mac) mission to provide access to credit for creditworthy borrowers and provide liquidity to the U.S. housing market while operating in a safe and sound manner,” FHFA Director Mel Watt said in a press statement. “The multifamily goals will create rental opportunities for those who need affordable housing. Together, these goals establish a solid foundation for affordable and sustainable homeownership and rental opportunity in this country.”

NAHB previously sent comments to FHFA on the 2015-2017 housing goals, stating that the we believe that the goals are set at an appropriate level in the single-family area. On the multifamily side, NAHB expressed support for FHFA’s proposal to establish a low-income, small multifamily goal and generally agreed the goal levels as recommended for multifamily in 2015-2017 were appropriate.

The final rule will become effective 30 days after publication in the Federal Register.

View chart summaries for Fannie Mae and Freddie Mac’s 2014 and final 2015-2017 housing goals.

NAHB Helps Soften the Impact of New Flood Risk Standards

In an important victory for NAHB and the housing community, the U.S. Army Corps of Engineers will pull in the reins on sweeping new standards that could have had a dramatic impact on home building and development.

NAHB talks with the Corps have produced results that will blunt the impact of the new Federal Flood Risk Management Standard, which greatly expand the 100-year floodplain, placing tighter limits on where homes can be built.

In January, President Obama issued an executive order establishing the new Federal Flood Risk Management Standard expanding the floodplain beyond the 100-year floodplain to either the climate-informed science floodplain,  the 500-year floodplain,  or the 100-year floodplain plus an additional 2 to 3 foot freeboard.

Given the language of the executive order, NAHB was concerned that the new floodplain definition could adversely affect residential housing projects and homes that get HUD funding, require EPA permits and participate in the National Flood Insurance Program (NFIP), making housing more expensive for consumers.

NAHB members and staff spoke in listening sessions, submitted comments and continually pushed federal agencies to limit the applicability of the new standard. These efforts worked.

• In June, FEMA confirmed that the new standard will not affect the standards or rates of the NFIP or the minimum floodplain management criteria for communities. FEMA will also continue to use the 1% annual chance floodplain as the basis for the Flood Insurance Rate Maps and the overall NFIP.
• This week, the Army Corps of Engineers released a fact sheet stating that Clean Water Act Section 404 wetland permits will not be subject to the expanded floodplain standard.
• Also this week, HUD confirmed to NAHB that the standard would not apply to newly constructed homes financed with FHA-insured mortgages. It had already determined that the standard would not apply to existing homes purchased with an FHA-insured mortgage.

However, the standard will apply to multifamily properties using FHA insurance for new construction or substantial rehabilitation. It will also apply to FHA 203(k) rehabilitation loans.

NAHB will continue to meet with the agencies as they update their regulations. We’ll monitor the development of the various documents and participate as needed to ensure our members’ concerns are addressed.

As a member of the HBA of Greenville, part of your dues go towards your NAHB membership so that they can continue to fight for fair regulations on your behalf. 

NAHB Resources Help Clarify New HUD Rule on Fair Housing

The  Affirmatively Furthering Fair Housing (AFFH) rule, which focuses on eliminating racial segregation, takes effect Aug. 17. The U.S. Department of Housing and Urban Development (HUD) announced the final rule in early July.

The regulation requires states, local governments and public housing agencies to conduct a more formal fair housing planning process than has been done in the past, as a condition of receiving federal funds.

To help clarify the sweeping changes announced in the rule, NAHB has created a Web page dedicated to this topic. The page includes an overview of the regulation, a link to a Frequently Asked Questions document compiled by NAHB policy experts, and links to HUD background materials.

NAHB is also creating a toolkit to help builders develop effective and workable recommendations when working with their communities to respond to the rule. 

Further, NAHB filed comments with HUD on Aug. 17 pertaining to the agency’s proposed Affirmatively Furthering Fair Housing Assessment Tool. NAHB’s comments reiterate our belief that land use decisions are local issues and also addressed other specific concerns regarding this new assessment tool

Please visit NAHB.org for more information on this topic along with other valuable resources.

Presidential Candidates Forum Set for International Builders' Show

NAHB is inviting all Democratic and Republican presidential candidates to present their views on economic, foreign and domestic policy issues – including the state of the home building industry – in a forum being held during the NAHB International Builders’ Show (IBS) in Las Vegas on January 20, 2016. 

Get your tickets now!

A limited number of tickets will be available for NAHB members and other IBS attendees to attend. Demand is expected to be strong. You must be registered to attend the 2016 IBS to be eligible for the drawing.  If you and your members who are attending the IBS are interested in attending the forum, you can enter a drawing for an opportunity to get your seats. The drawing opens Tuesday, October 20, and will close November 30.
Current IBS registrants will receive an email (to the email address used for registration) Tuesday with instructions on how to enter the drawing. Anyone who registers after Tuesday (and before Nov. 30), will have the opportunity to enter the drawing through the registration process.

This is an excellent opportunity as part of a greater learning experience with the IBS and NAHB. Register for the Show today and be entered for a chance to attend a presidential forum with questions concerning the building industry.