List of Improving Housing Markets Rises to 263 Metros in June

June 6, 2013 – The number of U.S. housing markets on the mend rose by five to a total of 263 in June, according to the National Association of Home Builders/First American Improving Markets Index (IMI), released today. The list includes entrants from 49 states and the District of Columbia.

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. Twenty-nine new markets were added to the list while 24 others were dropped from it this month. New entrants included such geographically diverse metros as Salinas, Calif.; Sioux City, Iowa; Chicago, Ill.; Topeka, Kan.; Baton Rouge, La.; Laredo, Texas; and Philadelphia, Pa.

“This is the fifth consecutive month in which the IMI has designated more than 70 percent of U.S. metros as improving,” observed NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “While that’s a good sign that the housing recovery is on solid footing, we know that various challenges are slowing its progress – including continuing issues with credit availability for builders and buyers, as well as appraisals that aren’t keeping up with the rising cost of construction.”

“As market conditions improve across most of the country, some metros have moved onto the IMI list while marginal seasonal fluctuations have nudged others off of it,” noted NAHB Chief Economist David Crowe. “This is to be expected as the recovery expands. Meanwhile, it’s worth noting that the number of improving markets is now more than three times what it was in June 2012.”

“The continued strength of the IMI is an indicator of the ongoing, positive momentum in housing markets nationwide as consumers move to take advantage of historically favorable interest rates and affordable home prices,” added Kurt Pfotenhauer, vice chairman of First American Title Insurance Company.

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 263 metros currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in June, is available at www.nahb.org/imi.

More Than 750 Builders Discuss Housing Issues in Hill Visits

National Association of Home Builders June 5, 2013 – More than 750 builders from across the nation converged on Capitol Hill today for the annual National Association of Home Builders (NAHB) Legislative Conference to urge their lawmakers to support policies that will keep the housing recovery moving forward and increase housing opportunities for all Americans.

“We are sending a loud and clear message to members of Congress that a strong housing market is critical to create jobs and boost economic growth,” said NAHB Chairman Rick Judson, a home builder and developer from Charlotte, N.C.

In 300 individual meetings with their representatives and senators, builders discussed the following key housing issues:
•Tax reform. To meet the nation’s growing need for affordable rental housing and homeownership opportunities, NAHB members urged Congress to maintain its support for vital housing tax incentives, including the mortgage interest deduction. Builders also emphasized that the Low Income Housing Tax Credit is essential to ensure that lower-income families have access to safe, decent and affordable housing.

•Housing finance reform. With Congress preparing to address the future of the nation’s housing finance system and Fannie Mae and Freddie Mac, NAHB continued to advocate that any restructuring provides for a reliable and adequate flow of credit for home buyers and that the federal government plays an appropriate role in backing up the housing finance system.

•Immigration reform. NAHB called on Congress to enact comprehensive immigration reform that protects the nation’s borders; focuses on the direct employer-employee relationship so that U.S. employers remain accountable only for the identity and work authorization status of their direct employees; and creates an efficient, temporary guest worker program that allows employers to recruit legal immigrant workers when there is a shortage of domestic workers.

•Credit for housing production. Despite the recent upturn in housing, builders in many markets are still unable to obtain construction loans for viable home building projects. NAHB called on lawmakers to support House bill H.R. 1255 sponsored by Reps. Gary Miller (R-Calif.) and Carolyn McCarthy (D-N.Y.) and companion Senate bill S. 1002 introduced by Sens. Robert Menendez (D-N.J.) and Johnny Isakson (R-Ga.) that would help resolve the ongoing credit problems for builders.

Source: National Association of Home Builders

Builders Urge Congress to Pursue Pro-Housing Policies to Spur Job and Economic Growth

National Association of Home BuildersJune 4, 2013 – New-home production and remodeling contribute billions of dollars to the nation’s economy each year, and with the right policies in place housing can serve as a catalyst to boost job and economic growth, the National Association of Home Builders (NAHB) told Congress today.

“How lawmakers and regulators deal with tax reform, home energy codes and the availability of building materials will go a long way to ensure a robust, long-term recovery for housing and the economy,” said NAHB Chairman Rick Judson, a home builder and developer from Charlotte, N.C., in testimony before the House Energy and Commerce Committee’s Subcommittee on Commerce, Manufacturing and Trade.

NAHB supports the goals of many in Congress to reform the tax code and believes that lawmakers should maintain existing housing tax incentives because homeownership remains the major path to wealth for the middle class.

“Any policy change that makes it harder to buy a home, or delays the purchase of a home until an older age, will have a significant long-term impact on household wealth accumulation and the makeup of the middle class as a whole,” said Judson.

“As most home owners benefit from the mortgage interest deduction, and most of that benefit flows to younger families, weakening the deduction and making homeownership less accessible is likely to diminish the financial success of future generations,” he added.

NAHB is urging building code officials to reinstate energy-neutral equipment efficiency trade-offs in the performance path of the International Energy Conservation Code to allow builders to more cost-effectively construct energy-efficient homes.

Energy efficiency tax credits such as the Existing Home Retrofit Tax Credit (25C) that provides consumers a tax credit of up to $500 for the purchase of qualifying energy-efficient products and the New Energy Efficient Home Tax Credit (45L) available to builders who construct energy-efficient new homes are important policy tools to provide home owners and builders with incentives to perform energy efficiency upgrades on homes, he added.

Meanwhile, the rising cost of building materials – most notably for framing lumber, oriented strand board and gypsum – are decreasing affordability and preventing builders from meeting the growing demand for new homes.

“Any effort to ease escalating price pressures, help rebuild the supply chain and support a continuing housing recovery is effective economic policy,” said Judson.

Labor Shortages Hamper Housing Recovery

Edward Martin, president and CEO of Tilson Home Corp. based in Austin, Texas, and president of the Texas Association of Builders, also participated in the congressional hearing. He told lawmakers that worker shortages in residential construction are impeding the housing recovery.

“My company is experiencing delays due to the lack of qualified framing crews to begin work on the structure of our homes,” said Martin. “We are also struggling to find master plumbers and rough-in crews, which run the pipes in the foundation before the concrete is poured. As a result of the shortage of skilled labor, on average, it is taking my company a month longer to build a home.”

A recent survey of NAHB members shows that since June 2012, residential construction firms have been reporting an increasing number of shortages in all aspects of the industry – from carpenters, excavators, framers, roofers and plumbers, to bricklayers, HVAC, building maintenance managers and weatherization workers.

Forty-six percent of the builders surveyed experienced delays in completing projects on time, 15 percent had to turn down some projects and 9 percent lost or cancelled sales as a result of recent labor shortages. Fewer homes built will harm the property tax base of local communities, which is vital to fund local schools, police and firefighters.

“With congressional attention shifting to immigration reform, I believe strongly that this debate provides an important opportunity for the country to implement a new market-based visa system that would allow more immigrants to legally enter the construction workforce each year,” said Martin. “This would complement our skills training efforts within the nation’s borders, and fill the labor gaps needed to meet the nation’s housing needs.”

Onerous Regulations Harm Remodeling, Job Growth

On the remodeling front, William Shaw, founder of William Shaw and Associates, a residential remodeling, design and build company located in Houston, said the federal government’s regulatory process is hampering the ability of remodeling firms to do business and impeding job growth.

“Housing serves as a great example of an industry that would benefit from smarter and more sensible regulation,” he said.

Shaw urged lawmakers to support the Lead Exposure Reduction Amendments Act of 2013 (H.R. 2093), bipartisan legislation recently introduced by Rep. Tim Murphy (R-Pa.) and 21 original co-sponsors that would make much-needed improvements to the EPA’s Lead: Renovation, Repair and Painting (LRRP) Rule.

The measure would restore the opt-out provision for homes without children or pregnant women; allow remodelers to correct paperwork errors without facing full penalties; provide an exemption for emergency renovations; and make it easier for remodelers to obtain recertification training.

By removing the opt-out provision in July 2010, EPA more than doubled the number of homes subject to the LRRP rule, adding an estimated $336 million per year in compliance costs to the remodeling community without making young children any safer, Shaw said.

For the small contractor, these additional costs have to be passed on to the consumer, which increases the chances that a home owner will likely hire another uncertified contractor to do the work, or worse, do the work themselves, which would actually increase the likelihood of disturbing lead-based paint.

Officials from Kohler Co. and Louisiana-Pacific Corp., major suppliers and manufacturers of kitchen and bath products and building materials, also testified at the hearing. Most of the products used in home construction and remodeling are manufactured in the United States and home buying typically generates a positive economic ripple effect. When a family moves into a new home, they spend $7,400 more than usual on appliances, furnishings and remodeling.

Home Builders Building Homes that Young Buyers Want, Says NAHB

National Association of Home BuildersJune 3, 2013 – During National Homeownership Month in June, the National Association of Home Builders (NAHB) is telling young people that the time is right to buy a home, and the nation’s builders are building the homes they want.

“As the economy recovers and young people who had to live at home with their parents move forward with their lives and achieve their dreams of homeownership, home builders are delivering homes that cater to the floor plans, features and affordability that this generation desires,” said NAHB Chairman Rick Judson, a home builder and developer from Charlotte, N.C.

More than 80 percent of Generation Y home buyers—people born in 1977 or later—said in NAHB’s 2012 consumer preference survey they prefer a highly energy efficient home that results in lower utility bills during the home’s lifetime over a lower-priced home without energy efficient features. Today’s new homes feature ENERGY STAR-rated appliances; windows, doors and insulation that better control the home’s interior climate; and other modern components such as tankless water heaters and HVAC systems that save costs on utility bills.

And cost-conscious young buyers will be happy to hear that a new home actually costs less to maintain than an older home. An NAHB study found that homes built before 1960 have average maintenance costs of $564 a year, while a home built after 2008 averages $241. Plus, mortgage rates are still very low, bolstering affordability for home buyers.

Generation Y buyers favor media and game rooms more than any other specialty rooms for their next home. New homes today not only contain these spaces, they are outfitted with the state-of-the-art electronic and wiring components that can accommodate high-definition televisions, full-house sound systems, hard-wired fire and security alarms and more.

Young buyers can check out many of the outstanding designs and features being included in homes built by NAHB members at our social media communities facebook.com/homebuildrs, pinterest.com/nahbhome and google.com/+nahb. They can also access home buying and home building information and resources on NAHB’s website at nahb.org/forconsumers.

“The time has never been better for young people to become home owners, whether it be a new home or existing,” said Judson. “There are outstanding opportunities in the current market, with near record low interest rates, competitive prices and new homes being built that include open layouts, energy efficient components and other features that cater to young buyers.”

New-Home Sales Rise 2.3 Percent in April

National Association of Home BuildersMay 23, 2013 – Sales of newly built, single-family homes rose 2.3 percent to a seasonally adjusted annual rate of 454,000 units in April, according to newly released figures from HUD and the U.S. Census Bureau. The gain builds on a strong upward revision to sales numbers reported for the previous month.

“Builders are reporting an active spring buying season as consumers become more confident about going forward with a new-home purchase along with steadily firming prices in local markets,” said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C. “While the cost of constructing homes is rising due to tightened supplies of materials, lots and labor, to some extent, this may be creating greater urgency among potential buyers.”

“Today’s report is further evidence of the gradual, consistent improvement we have been seeing in housing market conditions over the past year,” noted NAHB Senior Economist Robert Denk. “We’re now about half-way back to what could be considered a full recovery, and we do expect to see continual, solid gains in both starts and sales of new homes going forward.”

On a regional basis, new-home sales rose 3.0 percent in the South and 10.8 percent in the West, but fell 4.8 percent in the Midwest and 16.7 percent in the Northeast in April.

The inventory of new homes for sale edged up to a still-thin 156,000 units in April. This is a 4.1-month supply at the current sales pace.

Builder Confidence Improves in May

National Association of Home BuildersMay 15, 2013 – Builder confidence in the market for newly built, single-family homes improved three points to a 44 reading on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for May, released today. This gain, from a downwardly revised 41 in April, reflected improvement in all three index components – current sales conditions, sales expectations and traffic of prospective buyers.

“Builders are noting an increased sense of urgency among potential buyers as a result of thinning inventories of homes for sale, continuing affordable mortgage rates and strengthening local economies,” noted National Association of Home Builders (NAHB) Chairman Rick Judson, a home builder from Charlotte, N.C. “This is definitely an encouraging sign even amidst rising challenges with regard to the cost and availability of building materials, lots and labor.”

“While industry supply chains will take time to re-establish themselves following recession-related cutbacks, builders’ views of current sales conditions have improved and expectations for the future remain quite strong as consumers head back to the market in force,” said NAHB Chief Economist David Crowe.

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 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.

All three HMI components posted gains in May. The index gauging current sales conditions increased four points to 48, while the index gauging expectations for future sales edged up a single point to 53 – its highest level since February of 2007. The index gauging traffic of prospective buyers gained three points to 33.

Looking at the three-month moving averages for regional HMI scores, no movement was recorded in the Northeast, Midwest or South, which held unchanged at 37, 45 and 42, respectively. Only the West recorded a decline, of six points to 49 in May.

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 nahb.org/hmi. More information on housing statistics is also available at housingeconomics.com.

Builder Confidence in the 55+ Housing Market Shows Strong Growth in First Quarter

National Association of Home BuildersMay 9, 2013 – In the first quarter of 2013, the National Association of Home Builders’ (NAHB) 55+ single-family Housing Market Index (HMI) increased 19 points on a year over year basis to 46, which is the highest first-quarter number recorded since the inception of the index in 2008 and sixth consecutive quarter of year over year improvements.

“Builders and developers for the 55+ housing sector continue to report increased optimism in the market,” said Robert Karen, chairman of NAHB’s 50+ Housing Council and managing member of the Symphony Development Group. “We are seeing an increase in consumer demand for homes and communities that are designed to address the specific needs of the mature homebuyer.”

There are separate 55+ HMIs for two segments of the 55+ housing market: single-family homes and multifamily condominiums. Each 55+ HMI measures builder sentiment based on a survey that asks if current sales, prospective buyer traffic and anticipated six-month sales for that market are good, fair or poor (high, average or low for traffic). An index number below 50 indicates that more builders view conditions as poor than good.

All of the components of the 55+ single-family HMI showed significant growth from a year ago: present sales climbed 19 points to 46, expected sales for the next six months increased 21 points to 53 and traffic of prospective buyers rose 15 points to 41.

The 55+ multifamily condo HMI posted a substantial gain of 23 points to 38, which is the highest first-quarter reading since the inception of the index. All 55+ multifamily condo HMI components increased compared to a year ago as present sales rose 23 points to 37, expected sales for the next six months climbed 23 points to 43 and traffic of prospective buyers rose 23 points to 38.

The 55+ multifamily rental indices also showed strong gains in the first quarter as present production increased 12 points to 43, expected future production rose 13 points to 48, current demand for existing units climbed 14 points to 56 and future demand increased 13 points to 58.

“The strong year over year increase in confidence reported by builders for the 55+ market is consistent with year over year increases in other segments of the home building industry,” said NAHB Chief Economist David Crowe. “While demand for new 55+ housing has improved due to a reduced inventory of homes on the market and low interest rates, builders’ ability to respond to the demand is being limited by a shortage of labor with basic construction skills and rising prices for some building materials.”

Before a DIY Home Project, Consider Safety, Time and Hidden Costs

National Association of Home BuildersMay 1, 2013 – To celebrate National Home Remodeling Month in May, the National Association of Home Builders (NAHB) Remodelers recommends that home owners consider the safety risks, time delays and hidden costs before attempting do-it-yourself (DIY) home improvements.

According to HUD and the U.S. Census Bureau, home owner DIY projects accounted for 37 percent of all home remodeling projects performed nationwide from 2010-2011. While many projects look manageable at first glance, there are many points to consider when determining the “real” cost generated on a project.

“Remodeling can be complex and often times full of surprises, even for experts like our members,” said NAHB Remodelers Chairman Bill Shaw, GMR, GMB, CGP, a remodeler from Houston. “DIY projects should be rewarding and fun, but if your DIY can’t be completed in the planned price range or your safety is at risk, leave the work in the hands of professional remodelers.”

Review the following considerations before sinking resources into a DIY home remodel:

Hidden Costs – Many of the products purchased for the DIY market, although designated by a name brand, are not always the same quality available to contractors. It is also important to verify the terms of the product warranty. Many warranties become void by improper installation.

Safety – Without the proper training and preparation, a DIYer can, and has, landed in the emergency room. Unfamiliarity with new tools and techniques can lead to life-threatening accidents. A good rule of thumb for any home owner is to avoid projects that require a license or structural changes to walls, roofs and floors.

Time – Troubleshooting unexpected issues often takes more time and expertise than originally planned. Hiring a professional will ensure that you have a contract with a completion date and that the remodeler will bring in whatever help is necessary to get the job finished on time.

Search the Directory of Professional Remodelers at www.nahb.org/remodelerdirectory to find a local professional remodeler.

Master Builders Association Announces Leadership Change

Maser Home Builders AssociationBellevue, WA – The Chair Officers of the Master Builders Association of King and Snohomish Counties today announced the departure of Executive Officer Sam Anderson. Anderson, whose contract was up this year, served as EO of the Association for 16 years.

Association President Brian Ross, of Yarrow Bay Holdings, said, “Sam Anderson was an innovator whose leadership will be remembered with deep appreciation. His years of dedicated service included overseeing the Association’s membership growth, the creation of the Built Green program and Master Builders Career Connection, and expanding the benefits and services offered to the membership.”

Among his many accomplishments, Anderson served on a variety of boards, including the Governor’s Affordable Housing Advisory Board, Puget Sound Partnership’s Ecosystem Coordination Board, HomeAid America’s Executive Committee and the Greater Seattle Chamber of Commerce Board of Directors, among others. He was honored with a National Association of Home Builders EOC Executive Officer of the Year Award in 2001 and a Housing Development Consortium of Seattle‐King County Pedestal Award in 2002 for his contributions to affordable housing.

A search for Anderson’s replacement began in January and a new Executive Officer will be announced by the end of the year.

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Founded in 1909, the MBA is a trade association comprised of more than 3,000 companies involved in the residential construction industry. It is the nation’s oldest and largest local home building association affiliated with the National Association of Home Builders

New-Home Sales Rise 1.5 Percent in March

National Association of Home BuildersApril 23, 2013 – Sales of newly built, single-family homes rose 1.5 percent to a seasonally adjusted annual rate of 417,000 units in March, according to newly released figures from HUD and the U.S. Census Bureau.

“This is the second-best sales number we’ve seen since early 2010, and a good sign of the continued, gradual headway that our industry is making toward recovery as more buyers jump off the fence in time to take advantage of today’s low interest rates and prices,” said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C.

“The latest sales report is right in line with our forecast for continued, modest increases in home prices and sales through 2013,” said NAHB Chief Economist David Crowe. “At this point, we are about half-way back to what would be considered a ‘normal’ level of sales activity as challenges related to supplies of credit, building materials, lots and labor are slowing the pace at which builders can build and sell new homes.”

Regionally, new-home sales activity was mixed in March, with the Northeast and South posting double-digit increases and the Midwest and West posting corresponding declines. Sales gained 20.6 percent in the Northeast and 19.4 percent in the South, while falling 12.1 percent in the Midwest and 20.9 percent in the West.

The inventory of new homes for sale held virtually unchanged at just 151,000 units in March, which amounts to a 4.4-month supply at the current sales pace.