NAHB: Court Strikes Down NLRB “Poster Rule”

In a victory for NAHB, the U.S. Court of Appeals for the District of Columbia on May 7 struck down a National Labor Relations Board (NLRB) rule that would have required millions of employers across the nation to place 11-inch by 17-inch posters in a prominent area in their workplace that informs employees of their right to form a union.

The court ruled that the NLRB overstepped its authority when it issued the poster rule, which deemed failure to display the required notice an unfair labor practice. The decision stated that the NLRB lacked authority to promulgate such a rule because Section 8(c) of the National Labor Relations Act provides that the dissemination (or non-dissemination) of non-threatening speech shall not be considered an unfair labor practice.

NAHB is a member of the Coalition for a Democratic Workplace, which was a party to the case. NAHB and other business organizations maintain that the poster rule violated free speech rights and amounted to little more than advertisements for union membership.

NAHB: List of Improving Markets is a healthy 258

The number of U.S. housing markets showing sustained improvement in three key measures fell slightly to 258 in May from 273 in April, according to the NAHB/First American Improving Markets Index (IMI), released this week. This total includes entrants from all 50 states and the District of Columbia.

Greenville has been listed since June 2011 and continues to improve in all three categories measured by the index.  Other Upstate markets on the list include Anderson, which joined the list in January 2012, and Spartanburg, which joined the list in July 2012.

The IMI identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. Four new markets were added to the list and 19 were dropped from it this month. Newcomers included the geographically diverse metros of Dothan, Ala.; Elizabethtown, Ky.; Salisbury, Md.; and Salem, Ore.

“The fact that over 70 percent of all U.S. metros are holding onto their spots on the improving list is definitely good news, and representative of the generally brightening outlook for housing markets nationwide,” said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “That said, our industry’s progress on the road to recovery is being slowed by rising challenges related to the availability of credit, building materials, labor and lots for development.”

“While seasonal trends in home prices resulted in an overall decline in the IMI this month, the index remains at a very strong level and continues to represent markets in every state,” noted NAHB Chief Economist David Crowe. “Some metropolitan areas that had previously charted marginal home-price gains dropped off the list this time as a result of typically softer prices seen in the winter months, which is similar to what the index showed in this same period last year.”

“Today’s report shows that the majority of U.S. metros are experiencing strengthening house prices, employment and permitting activity, which is a much more positive picture than the one we were seeing a year ago,” observed Kurt Pfotenhauer, vice chairman of First American Title Insurance Company. “That’s the big picture on which consumers need to focus.”

The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three measures for at least six consecutive months following those measures’ respective troughs before being included on the improving markets list.

A complete list of all 258 metropolitan areas currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in May, is available at www.nahb.org/imi.

Building Code: New Design Values for Southern Yellow Pine Postponed

You may be aware that the American Lumber Standards Committee approved new design values for Southern Yellow Pine in all applications except #2 2x4.  Their rationale is that the rapid-growth rate for modern southern yellow pine has reduced its load-carrying capacity.

The new standards reduce the distance spanned by the various lumber dimensions by as much as 15 percent and were set to take effect June 1.  Click here to view the update conversion chart for Southern Yellow Pine.

However, your Home Builders Association learned today that the International Code Council has elected not to implement the new design values in the current code and will instead consider them for the 2015 building code.  In addition, NAHB has continued its efforts to have the new design values reversed and is currently challenging the validity of the American Lumber Standards Committee's findings.

Note however that the 2012 International Residential Code is scheduled to take effect in South Carolina on July 1.  You may be aware that a provision of the new code includes an increase in the dimension of floor trusses, when a gas appliance is placed in the basement or crawl space, in order to avoid fire-proofing the floor above the gas appliance.  Your Home Builders Association is working with the South Carolina Building Officials Association to develop a solution to this expensive new requirement.  Stay tuned.

Construction employment has not kept pace with construction growth

Part of the reason employment growth is so weak is that despite sizable increases in residential construction spending, increases in construction employment have been MIA. From April 2012 to April 2013, residential construction put-in-place increased from $249 billion to $295 billion, an 18% rise. However, during the same period, the number of residential building employees and residential specialty trade contractors rose from 2,048,100 to 2,131,800 or by just 4%!

Elliot F. Eisenberg, Ph.D.
GraphsandLaughs, LLC
elliot@graphsandlaughs.net

FHFA: Refinance Volume Continues Strong Pace Through February

Low Mortgage Rates Contribute to HARP Success

The Federal Housing Finance Agency (FHFA) today released its February 2013 Refinance Report, which shows that refinance volumes remained high as mortgage rates hovered near historic low levels. More than 463,000 refinances took place in February, with 97,738 completed through the Home Affordable Refinance Program (HARP). This brings the number of total HARP refinances to more than 2.3 million since the program’s inception in April 2009.

FHFA recently announced it has extended HARP for two more years and will soon launch a nationwide campaign to educate and encourage homeowners to learn about HARP eligibility requirements. HARP was set to expire Dec. 31 of this year.

Also in the February 2013 report:

• Borrowers with loan-to-value (LTV) ratios greater than 105 percent accounted for 45percent of the volume of HARP loans.
• The number of completed HARP refinances for deeply underwater borrowers continued to represent a significant portion of total HARP volume. In February, 22 percent of the loans refinanced through HARP had a LTV ratio greater than 125 percent.
• Through February, underwater borrowers represented 65 percent or more of total HARP volume in Nevada, Arizona and Florida.
• Also in February, 18 percent of HARP refinances for underwater borrowers were for shorter-term 15- and 20-year mortgages, which build equity faster than traditional 30-year mortgages.
• The total number of HARP loans by state include: California (329,707), Florida (200,332), Illinois (158,822), Michigan (158,462), and Arizona (117,149).

Link to Refinance Report
Link to FHFA announcement: HARP Extended to 2015

NAHB Legislative Conference Bus Trip June 4th-6th, 2013

 Join fellow members of the HBA of Greater Columbia and NAHB members from around the state
and nation as we travel to Washington, DC for the NAHB Legislative Conference. We will meet with our elected officials in their Washington offices to talk about the issues that are important to our industry. This is quite possibly the most important meeting you will attend all year. We have made arrangements for transportation and lodging for our members.
The cost ranges from $399-$549 depending on occupancy of the hotel room (single or double)
For more information please contact the HBA of Greater Columbia, 625 Taylor St., Columbia, SC 29201 FAX: (803) 779-0635
OR – Register on-line at www.columbiabuilders.com.
Questions? Call (803) 256-6238.
Registration and payment is requested by May 13, 2013.

Rising Costs Impacting Builder Confidence This Month

Facing increasing costs for building materials and rising concerns about the supply of developed lots and labor, builders registered less confidence in the market for newly built, single-family homes in April, with a two-point drop to 42 on the NAHB/Wells Fargo Housing Market Index (HMI), released last Monday.

Commenting on the latest data, NAHB Chief Economist David Crowe explained that “Supply chains for building materials, developed lots and skilled workers will take some time to re-establish themselves following the recession, and in the meantime builders are feeling squeezed by higher costs and limited availability issues." However, he also noted that builders’ outlook for the next six months has improved "due to the low inventory of for-sale homes, rock bottom mortgage rates and rising consumer confidence."

While the HMI component gauging current sales conditions declined two points to 45 and the component gauging buyer traffic declined four points to 30 in April, the component gauging sales expectations in the next six months posted a three-point gain to 53 – its highest level since February of 2007.

Looking at three-month moving averages for regional HMI scores, the Northeast was unchanged at 38 in April while the Midwest registered a two-point decline to 45, the South registered a four-point decline to 42 and the West posted a three-point decline to 55.