A tightening labor market and a desire to normalize monetary policy led the Federal Reserve's monetary policy committee to tighten financial conditions.
Written by NAHB, June 15, 2017 08:25am
Federal Reserve Policy Moves
A tightening labor market and a desire to normalize monetary policy led the Federal Reserve's monetary policy committee to tighten financial conditions.
First, the Federal Open Market Committee announced the second rate hike of 2017, increasing the target rate to a range of 1%-1.25%. NAHB expects one additional increase in 2017.
Second, the committee announced plans to reduce its balance sheet, which grew after the Great Recession as part of an accommodative policy known as quantitative easing. The balance sheet, which includes $1.8 trillion in agency debt and mortgage-backed securities, would be reduced in a "gradual and predictable" manner, creating only a slight increase in mortgage rates. The reductions in mortgage-backed securities would start at $4 billion and rise to $20 billion per month over a 12-month period and not result in a complete run-off of holdings. This process would likely begin at the end of 2017.
The Fed's actions are motivated by admittedly conflicting data. Measures of inflation remain below the Fed's 2% objective, but tight labor market conditions risk accelerating prices. For example, the unemployment rate was 4.3% in May and job openings persist at elevated levels, especially within the construction industry. The Fed's moves represent a belief that economic conditions continue to be solid and growth will continue.
NAHB Chief Economist Robert Dietz
Lending and Spending
Fed Raises Rates, Announces Balance Sheet Reduction Plan
The announced policy is intended to be "gradual and predictable."
Softwood Lumber and OSB Prices Keep Climbing
May's increase pushed the softwood lumber price index to its highest level in nearly 13 years.
Private Residential Construction Spending Slows in April
Declines largely stem from both the multifamily and home improvement sectors.
Home Equity Grows to $23.5 Trillion
More home owners are refinancing to cash out.
Mortgage Rates Fall
Though they remain above the low of 3.54% set in October 2016.
Economic Indicators
Consumer Credit Expands at a Slower Pace
Total household debt has returned to its 2008 peak level.
Pending Sales Slump
April declines were reported in all regions of the U.S. except one.
Employment Situation is Just a Little Disappointing
May's report is unlikely to alter the Fed's overall positive economic impressions.
Consumer Confidence Slightly Decreased in May
Optimism waned for the near-term outlook.
Industry Insights
Regional Patterns Emerge for Age of Construction Workers
Median ages are highest throughout the Northeast, lowest in the Midwest.
Who are NAHB's Associate Members?
Census illustrates the categories of those who are indirectly involved in home building.
Construction Job Openings Jump in April
Recent increases in quits reflect growing competition for workers.
Home Price Appreciation Slowed in March
Since November 2016, prices have been decelerating.
A strong month for home sales in March reinforced the trend of positive housing demand.
Written by NAHB, May 04, 2017 12:57pm
Tight Inventory and Rising Costs
A strong month for home sales in March reinforced the trend of positive housing demand. Sales of new single-family homes grew 15.6% from a year prior, and 5.8% above the previous month's mark—a noteworthy gain, considering February's sales benefitted from the unseasonably warm weather.
March was also an encouraging month for the existing homes market, which saw sales rise 4.4% to its highest pace in 10 years. Inventory of existing homes for sale remains very tight, standing at only a 3.8 months' supply. This is a primary reason why the increases of home prices continue to outpace growth in household incomes.
However, supply-side costs remain on the rise as builders continue reporting scarce availability of labor and lots. And the announcement of an effective 20% tariff on Canadian softwood lumber could have a significant, negative impact on construction jobs and wages. One-third of the softwood lumber consumed in the U.S. is imported, about 95% of which comes from Canada.
NAHB Chief Economist Robert Dietz
Sales
March Sales Roar Like a Lion
The surge led to the fastest pace in 10 years.
Pending Sales Pause
The number of signed contracts in March still exceeded the level from a year ago.
House Prices Surpass Pre-Recession Peak
All 20 metro areas had positive home appreciation.
Construction
Duty on Canadian Lumber Will Have Significant Impacts
Thousands of U.S. jobs and hundreds of millions in wages will be lost.
Post-Recession High for Residential Construction Spending
Both multifamily and home improvements experienced big gains in March.
Poll Examines Career Motivations of Young Adults
Most know what they want, but very few say it's a job in construction.
Lending
Cash Sales Dwindle for New Homes
The current share of FHA-backed loans is twice the size of its pre-recession average.
Mortgage Rates Tick Down in March
The decline comes after four consecutive months of increases.
Declining Activity for USDA Single-Family Programs
NAHB study explores the trends of USDA home loans over the past decade.
Economic Indicators
GDP Growth Slows in the 1st Quarter
A second-quarter rebound is a strong possibility.
Homeownership Rate on Stable Ground
Levels increased slightly in every age group.
Consumer Confidence Declined in April
A less-favorable outlook comes after a record-setting month for optimism.
Remodelers Report Broad-Based Confidence
Sentiments about market conditions are the most positive since 2015.
Optimism among single-family builders this month is the strongest it has been since 2005.
Written by NAHB, March 23, 2017 07:15am
Builder Confidence Highest in Nearly 12 Years
Optimism among single-family builders this month is the strongest it has been since 2005. Much of this positive sentiment stems from the widely anticipated reductions of government regulations. A prime example was the recent executive order to roll back the Waters of the United States rule that affects builders' and developers' wetlands permits. However, we can expect some moderation in builder confidence in the months ahead, as interest rates rise and headwinds persist for access to lots and labor.
As expected, last week the Federal Reserve increased the short-term federal funds rate for just the third time in the post-recession era. Much of the Fed's stance is fueled by a strengthening labor market, which added 235,000 jobs last month. As the rate of inflation approaches the 2% target rate, NAHB forecasts two additional rate hikes this year.
Additional price pressures can be seen on the supply side of the industry. Gypsum prices have increased more than 6% in the first two months of 2017, and softwood lumber prices rose almost 5% due to the ongoing lumber trade dispute between the U.S. and Canada. As housing starts continue to rise in the months and years ahead, additional sources of lumber will be required.
NAHB Chief Economist Robert Dietz
Labor
Job Growth Continues for Builders and Remodelers
Unfilled jobs decreased in numbers as hiring accelerated.
Employment Situation in February: Fits Like a Glove
Labor report aligns well with the Fed's intention to raise interest rates.
Are Young Construction Workers Worth Your Time?
Builder survey reveals the potential effects of hiring a less-experienced crew.
Finance
Home Equity Reaches a New Peak
Real estate holdings climbed more than $1.5 trillion in the past year.
Non-Mortgage Consumer Debt Slowly Grows
Shrinking credit card debt was outweighed by an increase of student and auto loans.
FOMC: Economic Outlook is Meeting Expectations
As anticipated, the Fed recently announced yet another rate increase.
Prices and Production
Solid Gains for Starts
February's pace for single-family homes was the fastest since 2007.
Consumer Price Index Rose Slightly in February
A decline in energy prices partially offset increases in other areas.
Gypsum Products Lead Price Increases Among Building Materials
Price jump for softwood lumber the biggest in four years.
Absorption Flat for Apartments, Jumps for Condos
The median asking rent significantly increased from 2015.
Trends
Builder Confidence Reaches a Cycle High
Optimism hasn't been this strong since 2005.
How 'Green' is the Average Builder?
Single-family builders typically use 10 different green products or practices.
Builders to Confront Labor, Financing Challenges
Written by NAHB, February 09, 2017 07:50am
Builders to Confront Labor, Financing Challenges
More than 80% of builders surveyed say that the scarcity of labor leads the list of challenges for 2017. While employment is growing within the housing industry—adding 128,000 jobs over the last year, and 20,030 in January alone—unfilled construction jobs remain a key supply-side headwind. Housing markets also continue to be held back by a lack of inventory, which has kept pending existing home sales flat for most of the last two years.
The rising cost of credit is another point of concern as the new year begins. Federal Reserve data indicate that demand for multifamily debt and commercial real estate construction and development loans slowed or declined at the end of 2016, perhaps due to rising interest rates. New home sales were also down in December, which some analysts attribute to higher mortgage rates. However, regional data do not fully support that claim.
While rising rates will act as a drag on housing demand going forward, sales were up 12% over the course of 2016 and favorable demographics will cause sales to rise more in 2017, supported by rising wages and job growth.
–NAHB Chief Economist Robert Dietz
Lending
Conventionally Financed New Home Sales Reach 9-Year High
Improved economic conditions help ease lending conditions for conventional loans.
Standards on CRE Loans Tighten as Demand Weakens
However, the pace of tightening has eased slightly after it peaked in mid-2016.
Federal Open Market Committee Meeting – No News is Good News
Economic conditions are right for a faster pace of monetary policy normalization.
Mortgage Rates Rising
Increasing rates too rapidly will likely impact sales.
Sales
Nation Moves Closer to Recovery
House prices are the lone bright spot amid lagging single-family permits and employment numbers.
Home Prices Continued to Rise in November
Tight inventory and high demand pushed prices up at a rapid pace.
Homeownership Rate Bottoming Out?
A 50-year low has been followed by two consecutive quarters of increases.
New Home Sales Grew 12% in 2016
A strong year overall, despite a weak December estimate.
Trends
Residential Construction Employment Growing
January's fast pace is an encouraging sign for 2017.
Record-High 4th Quarter for 55+ Housing Market
Builders report increases in current sales, expected sales and prospective buyers.
Residential Construction Ends 2016 on High Note
Three consecutive monthly increases in spending add momentum at the start of a new year.
Housing Share of GDP Essentially Unchanged
A slight drop brings total contributions to 15.6%.
Economy
Employment Situation Looks Promising
Solid report from the Bureau of Labor Statistics starts off the year.
Consumer Confidence Decreased in January
Optimism about current conditions is overshadowed by low expectations for the future.
First Look at 4th Quarter GDP Growth
Real GDP grew at a 1.9% annual rate, slowing from 3.5% in the previous quarter.
February 06, 2017 09:13am
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Rising Rates a Challenge for 2017
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Economic conditions continue to mirror market reactions to the post-election environment. For example, the 10-year Treasury rate has risen from 1.8% in early November to approximately 2.4% this week. Rates escalated on the prospects of increased growth in a tight labor market. This higher cost of capital has pushed up mortgage rates (30-year fixed-rate mortgages jumped from 3.5% to 4.2% in recent months). And rising rates have already had an affect on pending homes sales which decreased 2.5% in November, 0.4% lower than a year ago.
However, it is important to keep in mind that rising rates are the result of improving economic growth prospects. Similar to the NAHB/Wells Fargo Housing Market Index, many market measures are showing post-election strength. For example, consumer confidence increased in December to the highest level since 2001. These trends reflect the broader economic challenge for 2017: a delicate balance of improved growth prospects and rising interest rates.
–NAHB Chief Economist Robert Dietz
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December 30, 2016 08:32am
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Builders Confident at Year's End
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Confidence among single-family home builders reached a post-recession high in December, following the election of a new president who promises regulatory relief and increased economic growth. Sales in November also showed positive trends, as new home sales jumped more than 5%—almost 13% higher than the same time last year. Existing home sales also edged up in November, with a four-months' supply of inventory.
New home construction was disappointing in November—down nearly 19% for the month—largely due to an unusual decline for multifamily starts. However, home building in 2016 performed well overall. Single-family starts are up almost 10% for the year, while multifamily starts are down about 4%.
Despite an ongoing scarcity of lots and labor, we anticipate continued growth of residential construction in 2017. Economic growth should also improve next year, compared to the relative weakness experienced in 2016. The full NAHB economic and housing forecast will be unveiled during the NAHB International Builders' Show.
–NAHB Chief Economist Robert Dietz
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December 19, 2016 03:32pm
December 16, 2016 08:27am
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Fed Raises Interest Rates
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For just the second time since the Great Recession, the Federal Reserve increased its target for the federal funds rate by 25 basis points. While still low, the rate increase continues the path toward higher interest rates and a normalized monetary policy after years of stimulative policy designed to support an economic recovery. The current outlook is for three additional rate hikes in 2017. Economic growth remains modest, though the pace could increase with a fiscal stimulus in the form of deficit-financed tax cuts or government spending increases as the Trump administration takes office.
The move by the Fed is consistent with recent labor market data, which reveal tight employment conditions. The unemployment rate declined to 4.6% in November, as 178,000 jobs were created during the month, of which 19,600 positions were in the home building and remodeling sector. Over 120,000 jobs have been created in residential construction within the last year. While solid employment figures are good news for housing demand, ongoing labor constraints are an inflation risk and a motivation for the Fed to continue raising rates in 2017.
–NAHB Chief Economist Robert Dietz
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December 05, 2016 08:31am
December 01, 2016 08:08am
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Construction Surges in October
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Single-family construction starts rallied in October, increasing nearly 11% to an annual rate of 869,000. Meanwhile, multifamily construction in October was also unusually strong. A gradually strengthening economy has led to a broadening of the types of residences being built, as depicted in the third-quarter data for the individual home building sectors:
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Custom home building posted 49,000 starts—its best quarter since the recession.
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Townhouse construction achieved a 12.4% share of the single-family market—near a cycle high.
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Median single-family home size is trending down as more entry-level homes are constructed.
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Rental housing continues to dominate, accounting for 92% of all new multifamily construction.
Overall growth helped support yet another strong level of builder confidence, according to this month's NAHB/Wells Fargo Housing Market Index. However, the surge from October is likely temporary. Single-family starts are expected to return to trend in the coming months, as will apartment construction while that market seeks a balance between supply and demand.
–NAHB Chief Economist Robert Dietz
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November 28, 2016 08:18am
November 21, 2016 08:42am
November 17, 2016 07:14am
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Economic Impact of Trump's Victory
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President-elect Donald Trump will undoubtedly have a profound and lasting impact on economic policy throughout his presidency. Costly business regulations are likely to be reduced or rolled back; rate-reducing, base-broadening, comprehensive tax reform will be under active consideration; and the leadership of the Federal Reserve will change in 2018.
The nation's low unemployment is placing pressure on the Federal Reserve to raise short-term interest rates, and those rates will influence many future policy decisions. The incoming Administration, in cooperation with a Republican-controlled Congress, will likely pursue policy that will boost GDP growth in the short run. However, if policy changes result in a growing deficit or overheating labor markets, interest rates will rise (faster) in response. Moreover, any policy changes that restrict trade will act as a drag on economic growth.
Interest rates are sure to grow in the years ahead. Smart policy is needed to identify economic efficiencies that will help limit how quickly those rate increases accelerate, thereby supporting housing affordability and improving business lending conditions in the longer term.
–NAHB Chief Economist Robert Dietz
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November 03, 2016 07:49am
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Federal Reserve Holds Rates Steady
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At the conclusion of its November meeting, the Federal Open Market Committee chose not to increase the federal funds rate. The Fed's comments gave no definitive signal of when the next increase will come, though it is widely anticipated that the first and only rate hike of 2016 will occur in December. While national job gains have been "solid," according to the Fed, concerns remain about weak GDP growth related to soft business investment.
However, housing data continually indicates improving market conditions. The month of September saw:
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Pending home sales rise 2.4% higher than one year ago;
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New single-family home sales grow 3.1% from the previous month; and
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The share of first-time buyers of existing homes increase to 34%.
At just a 4.8 months' supply, inventory of new homes for sale remains tight. Meanwhile, multifamily construction spending reached a historic high in September. And in the remodeling industry, NAHB surveys show 14 consecutive quarters of positive market conditions.
–NAHB Chief Economist Robert Dietz
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Growing Demand Will Support Expansion in New Home Sales
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The Federal Reserve held short-term interest rates constant last month, as expected, but the next rate hike is likely not far away. NAHB predicts rates will rise at the Federal Open Market Committee's upcoming meeting in December, one year after the first rate increase of this cycle occurred.Despite these expected increases, mortgage rates should remain relatively low throughout the next few years, supporting continued growth in the demand for housing.
Unlike the recent slowing of existing home sales, new home sales should continue to expand. August recorded the second-highest annual rate of new, single-family home sales since the end of the recession. And the low inventory—currently at just a 4.6 months' supply—points to an uptick in construction ahead, consistent with the growing amount of confidence among builders.
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Economic Conditions
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Recent drops in both single-family and home improvement spending overshadowed record-breaking gains for multifamily construction.
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Effective Rate on New Home Loans Continues to Drop
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August marked the seventh consecutive month of falling interest rates.
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Latest figures from the Bureau of Economic Anaysis indicate overall economic growth is accelerating.
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Housing's Share of GDP Holds Steady
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But for the first time in more than two years, residential fixed investment had a negative effect.
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Builder Confidence Matches a Post-Recession High
Written by NAHB, September 23, 2016 06:46am
Builder Confidence Matches a Post-Recession High
Last month's surprising dip in housing starts came as inventory remained tight for both new and existing homes. The seasonally adjusted annual pace of single-family starts in August was down 6% from the previous month, although year-to-date totals for single-family construction are still up 9% from this time last year.
Home building is noticeably down in the South, largely due to flooding that affected many areas of the Gulf Coast. Nationwide, multifamily starts declined 5.4% from July to August. Multifamily development has generally been flat, as the rental apartment market finds a balance between supply and demand.
However, despite persistent shortages of lots and labor — July estimates of unfilled construction sector jobs reached 214,000 — home builder confidence is growing stronger. The NAHB/Wells Fargo Housing Market Index (HMI) for September climbed to a level of 65, matching a post-recession high and suggesting a weak August will be followed by growth in permits and starts.
Business Conditions
Builder Confidence Surges in September
Upward momentum expected to built into 2017.
A High Point for Large, For-Rent Multifamily Buildings
Completions in 50-plus unit buildings have skyrocketed 284% since 2011.
Building Materials Prices Continue to Climb
Though overall producer prices remain flat, lumber and gypsum rose sharply in August.
Sales and Contract Prices Per Square Foot in 2015
Prices for spec homes in the Pacific and New England regions far exceed the national average.
Housing Trends
Home Equity Grows Even as Homeownership Declines
Household holdings of real estate in the second quarter totaled $22.29 trillion.
New Single-Family Homes Have More Bedrooms
Share of new homes with four or more bedrooms in 2015 increased to 47%.
Concentration of Large Builders in Metropolitan Markets
Major housing markets have become more concentrated since the trough of the housing crisis.
Economic Insights
Housing Starts Pause in August
Single-family and multifamily posted declines after several months of gains.
Consumer Price Index Posts Strong Gain in August
Rising costs of medical care largely contributed to the increase in core inflation.
Consumer Credit Outstanding: What's Driving Auto Loan Growth?
The soaring auto loan market is drawing the attention of financial regulators.
Surprising Labor Market Data Pauses the Fed
Written by NAHB, June 17, 2016 07:38am
Surprising Labor Market Data Pauses the Fed
A weak labor market report clearly influenced the Federal Reserve's decision to keep interest rates steady this week. The Fed noted that job gains have slowed and business investment has been soft. Housing, however, remains a bright spot as the economy picks up speed entering the second quarter.
Industry Insights
Who are NAHB's Builder Members?
The latest member census reveals that the median dollar volume for builders in 2015 was the highest on record.
Market Share of the Nation's Top Builders
The total number of closings among each of the top 100 U.S. builders in 2015 ranged from 365 to 36,736.
One-Person Residential Construction Firms Total 1.7 Million
Though large in numbers, these contractors typically pull in modest receipts.
Lending Trends
Non-Bank Institutions Account for Nearly Half of All Home Loans
The share of mortgage originations from independent mortgage companies is the largest among all lender types.
Home Mortgage and Multifamily Residential Debt Expand
Rising real estate values outpaced increasing mortgage debt, resulting in overall home equity growth.
Consumer Credit Outstanding Grows on Auto, Student Loans
Outstanding non-revolving credit now stands at $2.65 trillion.
Macroeconomic Indicators
Increasing Energy Prices Drive Producer Price Index Higher
May's upsurge was twice the size of April's.
Last Month's Employment: All Systems No
April was a bad month, May was a shocker, and June is a non-starter.
Construction Employment Drops as Job Openings Persist
The count of total jobs in the home building sector has declined for two straight months.
Personal Consumption Expenditure Jumps
April's increase was the biggest since August 2009.
Private Residential Construction Spending Stalls
Both multifamily and home improvements declined in April, while single-family spending was virtually unchanged.
Consumer Perspectives
Consumer Confidence Slipped Again
But expectations improved for business conditions six months from now.
New House Price Data Show Why Costs are a Problem
Nearly one-third of consumers expect to pay less than $150,000 for a home, while just 6% of new homes fall in that range.
As the National Association of Home Builders (NAHB) celebrates National Homeownership Month in June, builders continue to demand affordable housing for all Americans, calling for sensible reforms to burdensome regulations that increase the cost of housing.
Written by NAHB, June 09, 2016 08:15am
As the National Association of Home Builders (NAHB) celebrates National Homeownership Month in June, builders continue to demand affordable housing for all Americans, calling for sensible reforms to burdensome regulations that increase the cost of housing.
“The aggressive over-regulation of the housing industry is putting the American Dream of safe and affordable housing at risk,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill.
In May, NAHB released a study, Government Regulation in the Price of a New Home, which showed that on average, government regulations account for 24.3% of the final price of a new single-family home. In fact, the regulatory costs for an average single-family home went from $65,224 in 2011 to $84,671 in 2016 – a 29.8% increase in five years.
“Regulators at all levels of government – local, state and federal – must understand that their actions have real consequences,” said NAHB Chief Executive Officer Jerry Howard. “The cost of regulation in the price of a new home is rising more than twice as fast as the average American’s ability to pay for it. That is simply not sustainable.”
NAHB has been fighting back against costly regulations that fail to meet their intended goals, including the Department of Labor’s new overtime rule that was implemented without considering its impact on small businesses, consumers, workers and the economy.
The 100% increase to the salary threshold for overtime eligibility will hit the home building industry particularly hard and harm housing affordability. It will reduce job-advancement opportunities and the hours of full-time construction supervisors, leading to construction delays, increased costs and less affordable housing options for consumers.
“Common sense reforms to the regulatory approval process would open the doors of homeownership to more Americans across the country,” Brady said.
During National Homeownership Month in June, and throughout the year, NAHB and its 700 state and local affiliates work hard to make affordable housing a reality and a priority to our nation’s leadership.
“Homeownership remains a core American value to consumers across the country,” Brady said. “In addition to building stronger communities, homeownership provides a solid foundation for family and personal achievement. It is critical that we keep this dream within reach, and not price out buyers with needless overregulation.”
Latest News & Information for Remodeling Industry
March 30, 2016 03:55pm
OSHA Rule Finalized for Silica Dust Exposure
OSHA issued the final silica rule to limit exposure to crystalline silica, found in many common building materials. Popular remodeling jobs like kitchens and baths that involve cutting tile, bricks and other materials containing crystalline silica over the new limit will likely be impacted by this new regulation. Remodelers will be required to use specified engineering controls like water or ventilation and provide respiratory protection for many common remodeling tasks.
March 31 Deadline to Recertify Training for EPA Lead Paint Rule
Though NAHB continues to beat the drum on the importance of a reliable, easy-to-use and inexpensive way to test for the presence of lead-based paint in walls and trim as key to the Environmental Protection Agency’s Lead Renovation, Repair and Painting rule, thousands of remodelers still face a March 31 recertification deadline. These remodelers are required to get refresher training either in-person or online through the new online class option.
Marketing In Your Local Media Market for Remodelers
You don’t have to spend the most money on advertising to beat the competition - just spend a little time on public relations. Former NAHB Remodelers Chair Robert Criner shares his keys to effective media relations that include recognizing the right opportunities and knowing who to contact.
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NAHB estimates 55,000 total tear-downs for 2015 single-family home starts. Anecdotal evidence suggests that tear-down construction has become a significant modus operandi in some parts of the country. Due either to local topographic or political constraints, replacing older structures with new ones can potentially be an important option.
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CAPS instructor and remodeler, Vince Butler, explains how he prepped an office above the garage for an in-law suite conversion. Here are 21 design ideas that even an expert should have included in the original office remodel to ensure a smooth transformation into his mother's living space.
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Home owner seminars are evolving for a clientele who wants information ondemand and online. Professional Remodeler interviews remodelers for tips on organizing seminars to maximize leads and sales force resources.
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A possible solution to the widespread labor shortage: Restock the low inventory of laborers with a new group of fresh (young) faces. 38 high school students in Montana are building a full-sized, two-story, four-bedroom house all on their own (with the oversight of Flathead Building Association members and skilled subcontractors).
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Membership Saves You Money
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Don't waste your limited time and resources on leads that don't pan out. The goal of this webinar is to give attendees the information they need so that they never again go on a sales call with an unqualified prospect. NAHB Remodelers members get an additional $5 off registration.
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Happy clients and beautiful homes - that's what it's all about. Join us as we turn up the volume in May to celebrate all things remodeling. We've created public relations, social media and other promotional resources for you to use during National Home Remodeling Month, saving you money on your marketing budget.
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Knowing how much the competition is bringing in can help you better gauge your financial performance and further enhance your industry intellect. NAHB is confidentially surveying remodeler members to provide them with real-market benchmarks they can use to compare their business to others, pinpoint improvement opportunities and set budget targets. Survey participants will receive a free copy of the final report, the 2017 Remodelers’ Cost of Doing Business Study.
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Join Professional Remodeler and industry peers for this exciting networking event. The inaugural GenX-Change event is in Dallas, April 13-15 and will provide a day and a half of interactive content for attendees to learn from those who have succeeded by taking risks to grow their businesses. The Professional Remodeler 40 under 40 winners will also be honored at this event. NAHB Remodelers members get $100 off the $325 registration cost.
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Give your clients the best during foundation, framing and exterior finishing when you better understand selection criteria, properties of materials, application techniques and the long-term performance of each system. Building Technology: Structures and Exterior Finishes Live Online will be offered in webinar format from 1:00-3:00 PM ET over three consecutive Tuesdays April 5, 12 and 19. Register today!
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NAHB has formed a strategic alliance with Houzz Inc., the online platform for home building, renovation and design, to help NAHB members use Houzz’s technology and marketing capabilities to connect with a community of 35 million users. Visit the Houzz NAHB member portal to create or update your free professional profile, which includes a verified NAHB badge. Members also have access to the Houzz concierge for assistance.
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The 2016 IBS Show in Las Vegas was described by many as the Best Show Yet!
March 30, 2016 08:59am
IBS 2016 was "Awesome," "Exciting," Unbelievable."
Check out IBS 2016!
Make plans right now to attend IBS 2017 in Orlando, Florida, January 10-12, 2017!
Weekly News Updates from NAHB
March 28, 2016 08:31am
NAHB has launched the Defender of Housing award to honor our senators, representatives and state elected leadership who understand the importance of the housing industry and take stands to help it grow.
Written by NAHB Now, February 15, 2016 10:08am
NAHB has launched the Defender of Housing award to honor our senators, representatives and state elected leadership who understand the importance of the housing industry and take stands to help it grow.
HBAs are encouraged to think about the contributions of their legislators who have demonstrated support for home building, remodeling, development and the contributions we make to the economy and submit an application.
Nominated by state and local HBA leaders, each candidate is reviewed by a select group of NAHB Federal Government Affairs Committee members before being chosen for this national award. And each legislator honored helps raise the profile of the state or local HBA making the submission.
Nominations are now being accepted and close April 29. Award winners will be announced in late May. For additional information, contact Alyssa Rajabi.
NAHB Chairman Ed Brady and First Vice Chairman Granger MacDonald this week conducted two days of meetings with Democratic and Republican leaders in both chambers of Congress to urge lawmakers to pursue a strong national agenda for housing
Written by NAHB Now, February 12, 2016 09:58am
NAHB Chairman Ed Brady and First Vice Chairman Granger MacDonald this week conducted two days of meetings with Democratic and Republican leaders in both chambers of Congress to urge lawmakers to pursue a strong national agenda for housing. The NAHB Senior Officers reiterated the importance of housing and homeownership to the economy and stressed that a vibrant housing market is necessary in order to maintain robust job and economic growth.
From left, NAHB Chairman Ed Brady, House Majority Leader Kevin McCarthy
and NAHB First VIce Chairman Granger MacDonald
On Capitol Hill, Brady and MacDonald met with several influential lawmakers from both sides of the political aisle, including Senate Majority Leader Mitch McConnell (R-Ky.); Senate Minority Whip Dick Durbin (D-Ill.); House Majority Leader Kevin McCarthy (R-Calif.); House Minority Whip Steny Hoyer (D-Md.); House Appropriations Committee Chairman Hal Rogers (R-Ky.); House Financial Services Committee Chairman Jeb Hensarling (R-Texas); and Rep. Ben Ray Lujan (D-N.M.), chairman of the Democratic Congressional Campaign Committee.
Discussions focused on the need to enact policies that would provide a stable and affordable supply of credit for home buyers, home builders and rental housing and to reduce or eliminate unnecessary regulations to make homeownership more affordable for firefighters, teachers, police officers and other middle-class families. Lawmakers were also urged to address soaring health care costs by allowing the use of health reimbursement arrangements and to adopt sensible workforce development and immigration policy that will help our industry fill open jobs and boost our nation’s economy.
Amidst this presidential election year, when so much hangs in the balance for the housing industry, these meetings will help to lay the groundwork for a successful Bringing Housing Home™ NAHB Legislative Conference during the week of March 7-11 when our members will hold in-district meetings with their lawmakers.
Builders are encouraged to log on to BringingHousingHome.com now and register to attend the industry’s most important lobbying event of the year.
For more information on Bringing Housing Home, email Michael Persaud at NAHB or call him at 800-368-5242 x8542.
Topping the list of problems builders faced is the cost/availability of labor
Written by NAHB Now, February 12, 2016 09:29am
Topping the list of problems builders faced in 2015 and expect to face in 2016 is the cost/availability of labor, according to a recent survey that NAHB conducted of our members.
As NAHB economist Ashok Chaluvadi reported in a recent Eye on Housing blog post, 76% or builders expect this to be a major issue in 2016. Labor concerns have increased in importance during the past three years. In 2013, 53% of builders rated labor as a significant problem, followed by 61% in 2014 and 71% in 2015. An expected skilled labor shortage can constrain an improving housing market.
To read more, click HERE.
President Obama on Feb. 9 unveiled a $4.1 trillion fiscal year 2017 budget proposal to Congress that is up 5% from the current year.
Written by NAHB Now, February 11, 2016 10:11am
 President Obama on Feb. 9 unveiled a $4.1 trillion fiscal year 2017 budget proposal to Congress that is up 5% from the current year.
But Republicans have made it clear they won’t even consider the proposal. GOP lawmakers made the unusual move of not even inviting Office of Management and Budget Director Shaun Donovan to testify about the 2017 budget – further evidence of the ongoing gridlock and partisan divide that now grips Washington.
Still, the White House budget serves as the initial marker in the budget battle ahead. Given the size, cost, complexities and major policy overhauls that this blueprint entails, the debate in the weeks and months ahead is likely to be contentious as lawmakers on both sides of the political aisle consider its merits on an array of fronts- from social spending, energy policy to taxes.
Here’s how the proposed budget relates to the residential construction industry.
HUD
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Proposes $48.9 billion in HUD funding, a 15% increase over the $42.6 billion provided in the fiscal 2016 omnibus spending bill the President signed on December 18, 2015.
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Provides $20.85 billion for Section 8 Tenant Based Rental Assistance, with $18.45 billion for contract renewals and $7 million for Veterans Affairs Supportive Housing (VASH). The fiscal 2016 approved appropriation provided $19.6 billion for the Section 8 program, with $17.68 billion earmarked for renewals and $60 million for VASH.
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Proposes $10.82 billion for Section 8 Project-based Rental Assistance, with $10.03 billion for contract renewals. Last year’s budget provided $10.62 billion for the program.
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Funds the HOME Program at $950 million, the same level as last year.
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Decreases Community Development Block Grant funding from $3 billion to $2.8 billion.
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Increases Choice Neighborhoods funding from $125 million to $200 million.
USDA
As the budget process moves forward in the year ahead, NAHB will remain deeply engaged, fighting to strip out any provisions that will harm housing and promoting elements that will help small businesses and the housing sector.
For more information, email Jessica Hall at NAHB or call her at 800-368-5242 x8253
Remodelers who are certified by the Environmental Protection Agency (EPA) to work on homes that may contain lead paint under the Lead: Renovation, Repair and Painting (RRP) rule now have the option to complete refresher training online, according to an EPA announcement.
Written by NAHB Now, February 11, 2016 09:47am
Remodelers who are certified by the Environmental Protection Agency (EPA) to work on homes that may contain lead paint under the Lead: Renovation, Repair and Painting (RRP) rule now have the option to complete refresher training online, according to an EPA announcement.
However, EPA re-certifications obtained via an online refresher course will be valid for only three years – versus five years for hands-on training courses – and can only be exercised every other re-certification cycle.
“As a longtime advocate for a simplified re-certification process, NAHB Remodelers appreciates that EPA’s changes provide some flexibility, but the limited and convoluted parameters of the online training option are unnecessarily complicated and could affect the number of renovators who opt to become re-certified,” said NAHB Remodelers Chair Tim Shigley, CGR, CAPS, CGP, GMB, GMR, a remodeler from Wichita, Kan.
“Whether they choose to refresh their training online or in person, with the March 31 re-certification deadline looming for over 100,000 remodelers, and thousands more later in 2016 and 2017, remodelers are left with precious little time to meet their re-certification obligations.”
Additionally, certified renovators who were grandfathered in under a HUD or EPA lead-based paint training course before the RRP rule was adopted must attend a refresher course with a hands-on component. The rule also made several streamlining and clarifying changes to RRP provisions that apply to training providers.
EPA’s changes only apply to those states where EPA administers the program. The 14 states that administer their own programs will have to take legislative or regulatory action to adopt the online refresher course option.
The White House Office of Management and Budget released the final rule to EPA on Jan. 21.
For online or in-person refresher training, remodelers should contact their local home builders association, or they can find a course on EPA’s website. More information on how to determine specific deadlines can be found using NAHB’s “What You Need to Know about EPA Lead-Safe Re-certification.”
In a highly unusual move, the U.S. Supreme Court last night halted implementation of the Clean Power Plan Rule
Written by NAHB Now, February 10, 2016 09:54am
In a highly unusual move, the U.S. Supreme Court last night halted implementation of the Clean Power Plan Rule, which requires states to reduce carbon dioxide emission from power plants located within their borders.
While the rule is supposed to focus on power plants, EPA’s emission reduction requirements are so stringent that states will have to use a variety of mechanisms to meet them.
Because EPA has encouraged states to use building energy efficiency, including the imposition of building codes, as a way to comply with these targets, NAHB has been engaged on this rule from the beginning, filing comments that significantly improved EPA’s treatment of energy efficiency in the final rule.
However, because incentives remain for states to use energy efficiency to meet these onerous requirements, NAHB, along with many other parties, filed a petition for review with the U.S. Court of Appeals for the D.C. Circuit challenging the rule.
The states and some industry groups asked the D.C. Circuit to halt implementation of the rule while it is being litigated. The court refused, and these groups then asked the U.S. Supreme Court to delay the rule.
The Supreme Court, in a 5-4 decision, granted these groups’ requests. States will now be relieved of taking action immediately to try and meet the rule’s deadlines, and can instead hold off until after the courts have decided whether the rule is legal, which likewise provides relief for impacted industries as well, including NAHB’s members.
There are numerous ways to push back and stay profitable.
Written by NAHB Now, February 10, 2016 09:34am
Small-volume builders who are feeling boxed in by large production builders in their area should take heart. Daniel Levitan, MIRM, IRM Fellow, CMP, CSP, owner of Levitan & Associates in Fort Lauderdale, Fla., who recently spoke at the NAHB International Builders’ Show, said there are numerous ways to push back and stay profitable.
Levitan conceded that large production builders have a lot of advantages over small-volume builders. To list a few:
– Easy access to capital
– Economies of scale
– Favorable treatment from subcontractors
– Library full of home plans with known costs
– Market visibility
– Sales and marketing efficiency
– Ability to survive market conditions
The upside for small-volume builders, however, is that most production builders are resistant to change, typically unable to respond rapidly to new opportunities or create new housing products, and find it challenging to take on smaller jobs or sites or typical developments. “And as most of you know, some of the small projects are more profitable than the large ones,” Levitan said.
Large volume builders also struggle to market outside of their established comfort zone, and are rarely able to accommodate requests for customization. So if you want to stay competitive with the big builders, Levitan recommends the following:
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Develop a significant Web presence to make yourself stand out.
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At a minimum, do some limited customization.
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Build in a sub-market. Go where the big builders won’t go.
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Directly target their weakness. For example, if they build quality, build to price or vice versa.
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Fill in the holes they leave behind. “If they’re doing all brick, you do stucco. If they’re doing one-story houses, you do two-story houses,” Levitan said.
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Partner with other small-volume builders.
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Find private investors.
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Pursue urban infill housing opportunities.
Interested in learning more? Search NAHBNow.com or visit NAHB.org for additional tips, strategies, articles and resources.
The White House Office of Management and Budget released a final Endangered Species Act (ESA) rulemaking on Friday that could make it more difficult for developers and builders to obtain federal wetland permits.
Written by NAHB Now, February 09, 2016 09:50am
The White House Office of Management and Budget released a final Endangered Species Act (ESA) rulemaking on Friday that could make it more difficult for developers and builders to obtain federal wetland permits.
NAHB is particularly concerned about how these rules could increase the size of future critical habitat designations. Once adopted, these ESA regulations will dramatically expand what types of habitat qualify as suitable for listed species.
Historically, federal regulators focused on areas occupied by the species and areas with specific physical or biological features to support the species.
This new rule would allow federal regulators to designate habitat that does not include the species nor any important physical or biological features, provided these areas could eventually develop such features or be used by the species.
The rules will be jointly administered by the U.S. Fish and Wildlife Service and the National Oceanic and Atmospheric Administration and become enforceable 30 days after being published in the Federal Register, which is expected within a week.
Once finalized, these regulations will make it extremely difficult for landowners and states to refute a federal determination that their properties or state lands should be designated as critical habitat.
These ESA rules, when combined with the expanded definition of ‘waters of the U.S.’ under the Clean Water Act, will significantly and unnecessarily increase the areas regulated by the federal government while providing little added environmental protection.
For additional information, contact Mike Mittelholzer.
The smart-home technology craze began years ago in some parts of the country, but in many other areas, it’s only just begun.
Written by NAHB Now, February 08, 2016 09:43am
The smart-home technology craze began years ago in some parts of the country, but in many other areas, it’s only just begun.
If you’re just entering this market, or have yet to do so because you think you don’t have the know-how, fear not – you don’t need to be a technology specialist. But you should become familiar with what’s trending and how you can address your clients’ needs before they go to another builder.
Product developers are constantly churning out new gizmos, like the thousands that were displayed at the recent Consumer Electronics Show. But only a small number are actually embraced by the general public.
Get a feel for what’s really trending
During an education session at this year’s International Builders’ Show, Greg Haupert, the executive director of Business Networking International and a home-technology integration specialist, listed several smart-home trends that have truly started to take root, including:
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Contemporary comfort with automated thermostats, lighting and security systems that quickly learn the owner’s preferences and can be controlled and monitored from anywhere in the world.
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High-tech appliances like refrigerators with internal cameras that allow the owner to remotely check its contents, and an automated compressor that adjusts its speed according to how much food is inside.
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Smart TVs – not simply those that run apps like Netflix and Hulu, but rather, TVs that are integrated to create a smart-home hub through which many, if not all of the home’s smart features can be controlled.
Many other experts at IBS recommended several more design trends and innovative products builders should consider.
Team up with an expert
Once you know what’s hot among consumers, but don’t feel confident enough to market yourself as a smart-home specialist, Haupert suggests partnering with one.
It’s okay to admit you don’t have all the technology answers as long as you partner with or employ someone who does, and who can comfortably interact with the client.
“Having a smart-home technology expert that you can rely on and consult with for certain projects will help boost your business and reputation,” Haupert said. “Don’t assume that [a tech specialist’s] only goal is to up-sell the client. When you find a trustworthy partner whom you can work with consistently, that will better enable you to meet your clients’ needs.”
Furthermore, he suggests working with contractors who can offer service contracts to the client. This will reduce your liability if (or rather, when) issues arise.
Plan ahead
But before you get too far down the road with a client, it’s critical to develop a technology plan as early as possible. Custom A/V and smart-home technology is best integrated when planned for well in advance. Pre-wiring a new home can save the client thousands down the road.
Haupert strongly advises that builders find out which pieces of technology the client wants and how they want to use them in their home. From there, go through the floor plan room by room and ask how they might want to use the technology in each space.
NAHB has several educational opportunities for industry professionals who want to learn more about integrating design and technology. Go to nahb.org for additional info.
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