News You Can Use

Avoid Online Embarrassment, Safeguard Your Reputation
It’s much easier to keep tabs on what people are saying about you online when you know how and where to look with our tips. Appraoching each issue with calm professionalism can turn even a nasty review into a potential lead generator.

Remodeling Market Index Dips in 1st Quarter
NAHB’s Remodeling Market Index posted a reading of 54 in the first quarter of 2016, dipping four points below the previous quarter but remaining in positive territory. Volatility in the financial markets during the first quarter may have impacted consumers’ readiness to commit to projects.

Rolling Deadline to Recertify for EPA Lead Paint Rule Began March 31
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 (EPA) Lead: Renovation, Repair and Painting (LRRP) rule, thousands of remodelers face a rolling recertification deadline that began March 31. These remodelers are required to get refresher training. As advocated by NAHB Remodelers, remodelers who are certified by the EPA to work on homes that may contain lead paint under the LRRP rule now have the option to complete refresher training online.

What Your Logo Says About Your Company
Consumers base 93% of their purchase decisions on color. Your logo's font and shape also play a role in how it is perceived. Consider some research to make sure your logo is sending the right messages.
Color

The Future of Color in Home Design
Color defines a home’s style, enhances architectural themes, places emphasis on the details and gives a residence an expression of permanence. As the housing market’s most prolific trendsetters and liberal idealists, millennials are setting the stage for the colors and styles will draw buyers in.
Membership Saves You Money

Remodeling Month

Free Resources for National Home Remodeling Month
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.

Save Time with Qualified Leads: Discounted Registration for May 11 Webinar

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.

Profits Matter: Join NAHB Study on Remodelers Finances
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.

3-Part Business Accounting and Job Cost Course Live Online in May
Builders and remodelers need to understand accounting principles and job cost procedures and functions in order to properly manage their business. Held online May 10, 17, and 24, this course will provide the terminology and method foundation necessary to comprehend basic business reporting and job cost procedures, measurement and analysis. Members receive $100 off the registration price.

Performance Guidelines Updated For Remodeling, 10% Off
Manage customer expectations, protect your bottom line and deliver high-performance homes with the Residential Construction Performance Guidelines for Professional Builders & Remodelers (5th Edition). Providing a copy to consumers at or prior to a contract signing may help resolve customer concerns before they escalate into complaints, disputes or worse. NAHB Remodelers members receive 10% off the purchase price with code REMC10.

Awards

Barry Helms
Tulsa Remodeler Earns NAHB Remodeler of the Month
Treating your customers with respect and diversifying your projects are two guiding principles for Barry Helms, president of Renovations by Helms Inc., and NAHB’s Remodeler of the Month for April. Sticking to those principles has helped Helms find success in a boom-and-bust oil town.

Remodeler of the Year, CADREs, and Other NAHB Remodelers Awards Open for Applications in Late May
Think you have what it takes to be the next NAHB Remodeler of the Year, Hall of Fame inductee, Homes for Life recipient, or award-winning remodelers council leader? Start prepping your applications now! Applications for all NAHB Remodelers awards will open in late May and close in late July.

PR 40 Under 40
Professional Remodeler Names Members to 40 Under 40
NAHB Remodelers congratulates the following members who were recognized with a 2016 40 Under 40 Award at a ceremony at the Professional Remodeler GenX-Change conference in March.
Eric Adams, founding partner, Adams + Beasley Associates, Age 39
Brandon Bailey, owner, Bailey Remodeling, Age 36
Matthew H. Cole, president & CEO, Cape Associates, Age 37
Nathan Cross, president, NWC Construction, Age 38
Lucas Herrick, owner, Modern Touches, Age 34
Poster contest

A Family Affair: Poster Contest for NAHB Kids
What does home building and remodeling mean to your family? We’re asking the children of remodelers and anyone else involved in this great industry to design a poster that shows what mom or dad’s job means to them. The winning design gets $1,000. Entries due June 24 and should follow these guidelines.

Cautious Optimism Heading Into Mid-Spring

Builder confidence in the market for newly built single-family homes was unchanged in April, remaining at a score of 58 on the NAHB/Wells Fargo Housing Market Index. This marks the third consecutive month the index has stayed at this level.

Construction and Sales

Builder Confidence Unchanged in April

Healthy levels of job creation and low interest rates expected to support construction growth. 

Housing Starts Fall Back to Trend

Despite a decline in March, the pace was well above that of a year ago.

Existing Sales Rebound 

Still no signs of increased activity among first-time buyers.

Household Trends

Housing Preferences Across Generations (Part III)

Nearly two-thirds of all home buyers want a single-story home. 

Young Adult Migration Slows Down Sharply 

Share of the population that moved within the country continues its downward trend.

Public Finance

Homeownership Still Offers Significant Tax Advantages

Real estate tax and mortgage interest deductions accounted for more than $100 billion in savings.

Notable Variations in Property Tax Rates

Even within the same county, real estate tax rates can vary substantially.   

State of Federal Government Finances

Congressional Budget Office paints a worrisome picture of the Fed's future.

Inflation

Prices for Energy Rise, Decline for Services 

Inflation in prices received by producers declined 0.1% in March. 

Modest Increase in Core Inflation

The Consumer Price Index rose at a seasonally adjusted annual rate of 1.1% in March.

The Wall Street Journal
Why housing will spring ahead

Spring is coming to the housing market. Probably. It is over a decade since the housing bust began, and the U.S. housing market isn't close to what historically would be considered normal. Last year, a combined 5.1 million new and used homes were sold in the U.S -- not quite as many as in 1998, when the working-age population was one-fifth lower than it is now. (Subscription may be required.)

MarketWatch
Why stronger growth may lie ahead after March housing starts swoon

Disregard the dismal housing starts data out Tuesday, many analysts say: a spring rebound is in the cards.

MarketWatch
Existing-home sales soar 5.1% in March, as housing demand remains strong

Home resales rebounded strongly in March, signaling sturdy demand in the housing market even as the recovery remains choppy.

ABC News (AP)
U.S. mortgage rates remain low as home-buying season starts

Long-term U.S. mortgage rates stayed near 2016 lows this week, potentially good news for the housing market as the spring home-buying season begins.

CNBC
Mortgage applications rise 1.3% but buyers pull back

Interest rates held relatively steady last week, near one-year lows, but homebuyers were not enticed.

Bloomberg
U.S. home prices rose 0.4% in February from January, FHFA says

U.S. home prices rose 0.4 percent in February from the prior month, according to the Federal Housing Finance Agency, as job growth fueled demand for a scant supply of listings.

The Wall Street Journal
The U.S. occupations at greatest risk of a labor shortage

The U.S. is at risk of running out of occupational therapists, railroad engineers, mathematicians, machinists and other workers, potentially leaving the economy in a long-term slump.

The Wall Street Journal
Why the great divide is growing between affordable and expensive U.S. cities

Across the country, a divide is emerging between cities that are growing outward and remaining affordable and ones that are hemmed in by geography and onerous zoning codes and are becoming more and more expensive.

The New York Times
In cramped and costly Bay Area, cries to build, baby, build

San Francisco does not have enough places to live. Sonja Trauss, a local activist, thinks the city should tackle this problem by building more housing. This may not sound like a controversial idea. But this is San Francisco.

ABC News (AP)
Missing ingredient for millennials: Down payment savings

Short of savings and burdened by debt, America's millennials are struggling to afford their first homes in the face of sharply higher prices in many of the most desirable cities.

The Wall Street Journal
Fannie Mae, Freddie Mac shareholders argue against government's profit sweep

Lawyers for shareholders of mortgage companies Fannie Mae and Freddie Mac argued in federal appeals court on Friday that the U.S. government has illegally seized much of those institutions' profits during the past three years, effectively bilking them out of hundreds of billions of dollars. (Subscription may be required.) 

National Mortgage News
"Promising Road" to GSE reform? We've been here before

The debate over the future of our mortgage finance system is back in fashion. Sparked by a paper from Jim Parrott, Lew Ranieri, Gene Sperling, Mark Zandi and Barry Zigas, as well as a series of ongoing essays organized by the Urban Institute, commentators are again asking what direction we should go. Parrott et al., title theirs "A More Promising Road to GSE Reform." With all due respect to its authors, a few of whom I consider friends, going down this road would largely take us back to the pre-crisis status quo. (Subscription may be required.)

National Mortgage News
Shelby asks GAO, CBO to report on GSE policy moves

Senate Banking Committee Chairman Richard Shelby, R-Ala., is seeking input from the Government Accountability Office and the Congressional Budget Office on the future of policies dealing with Fannie Mae and Freddie Mac. (Subscription may be required.)

MP Global
Zip Up Under Deck -  A Perfect Way to Extend a Deck Job!

While electric radiant under-floor heat systems for supplemental warmth started out years ago as a luxury option in new homes and high end renovations, they are now an increasingly popular perk for many types of new construction and remodeling projects. The concept is popular in bathrooms, kitchens, bedrooms, family rooms, entryways, laundry areas, sunrooms, and other spaces where a bit of extra warmth underfoot would be appreciated.  

Ply Gem
PVC Shake and Shingle

The style and grace of shake-and-shingle clad homes is part of the American architectural tradition, but the upkeep required to keep these exteriors looking good is more than most homeowners care to take on.

Professional Warranty Service Corp
Are You Marketing in a Way that Matters?

In 2016, in order to be competitive and reach the target audience of potential home buyers, builders and real estate professionals need to understand "How are home buyers across the U.S. researching new home builders and how does this influence their decision regarding who they want to build their home?"

The Washington Post
Looking for a low-down-payment loan? If your FICO score is good, you're in luck.

If you're planning to buy a home with a low down payment, you need to be aware of some important but virtually unpublicized price changes underway in the mortgage market.

HousingWire
Is TRID hysteria over? Time to close drops to 12-month low

Well, it's now been more than six months since the implementation of the Consumer Financial Protection Bureau's TILA-RESPA Integrated Disclosures rule.
 

The growing lack of affordable housing for America’s middle class could harm the economic health of the country, according to the author of a new report.

America's Housing Crisis, by the Houston-based Center For Opportunity Urbanism (COU), says that a growing crisis in housing supply is driving middle-class families out of many high-priced areas of the country, notes COU Executive Director Joel Kotkin.

Here, BUILDER talks with Kotkin about the ramifications of the high price of housing and what can be done about it.

Q: In the study, you talk about a housing shortage. Is that for all buyers or just first-time and low-income?
A: The housing shortage is affecting a wide range of buyers – from first-time to low-income to middle-income ones, especially in expensive metro areas.

In most major metropolitan areas of the nation, housing has been affordable for middle-income households since World War II. The median house price tended to be approximately three times the median household income. But in the past several years housing prices in some metropolitan areas have far outpaced incomes. In San Francisco and San Jose, for example, they're as much as nine to 10 times incomes. In Los Angeles and San Diego, they're more than eight times incomes. And in Portland, Seattle and Denver, they are about five times incomes.

All these cities have seen home prices double to triple their previous levels, and all have strong land use regulation, principally urban growth boundaries, which severely limit or even prohibit building on the urban fringe. The resulting shortage of land drives up prices and has been associated with lost housing affordability.

Q: What does this mean for buyers?
A: This means that younger people, and middle-income households that are not homeowners already have little or no opportunity to purchase housing that they desire. Many are forced to rent rather than buy, and others see no alternative than moving to metropolitan areas where housing is affordable.

Housing is the largest expenditure item in the household budget. Excessively high housing prices, which exist in places like San Francisco, San Diego and Seattle, leave less money available to households for other goods and services. This results in a lower standard of living than would otherwise be the case. Higher house prices help shut lower middle-income households out of homeownership altogether, possibly increasing demand for subsidized housing where there is also a shortage as is evident by the waiting lists in many cities.

Q: Is this housing crisis reflective of the country’s income inequality as a whole?
A: Housing, notes scholars in both Europe and the United States, has become the biggest driver of inequality in recent decades. As housing prices go out of reach, it becomes increasingly difficult for middle and working class families to purchase a home, or even find a place with affordable rents. The result has been to drive many working families into poverty; in California, where high prices are largely the result of regulations, upwards of one in four people lives in poverty, the highest rate in the country.

Without home ownership, most Americans lack any decent asset that they can rely upon as they approach retirement. This will create a new class of middle and working class people who will be utterly dependent on income transfers to make ends meet.

Q: Is urban living out of reach for middle-income Americans?
A: Today’s housing crisis is about middle-income households who have been driven from the market by high prices. This was not always the case.

From World War II until the 1970s, median house prices were approximately three times (or less) median household incomes in every major metropolitan area. Similar housing affordability remains today in many metropolitan areas, such as Atlanta, Charlotte, Dallas-Fort Worth, Houston, Kansas City, Columbus, Indianapolis, Nashville and others. However prices have doubled or tripled relative to incomes, with house prices now are severely unaffordable, at 5 to 10 times incomes, in places like San Francisco, San Jose, San Diego, Portland, Seattle, Miami and others (each of these metropolitan areas had house prices of approximately three times or less household incomes in the early 1970s and later).

The difference between the affordable and unaffordable metropolitan areas is that the high cost markets have adopted overly restrictive land use regulations, especially those that ban or severely restrict development on the urban fringe (such as urban growth boundaries). When cities severely cut back land supply, land prices are driven up and house prices rise. In an environment of constricted land supply, there is little that can be done to make cities more affordable. Indeed, it can be expected that housing affordability will continue to get worse in the cities listed above and others with overly restrictive land use regulation. New Zealand is considering a proposal to reverse the problem. It would involve an automatic suspension of urban growth boundaries if housing affordability targets are not met.

Reform of restrictive land use policies is a prerequisite for improving housing affordability. At the same time, it will be very important for cities that have not implemented such strong regulations to avoid doing so. There is justifiable concern about the economic decline of the middle class. Much of this decline results from the reduction in discretionary incomes resulting that occur due to severely unaffordable housing.

Q: How should public officials “make it easier for U.S. housing developers to produce more starter and other homes to accommodate the demand,” as you say in the report?
A: Very simply, by reducing greenfield land regulation, so that houses can be built on land that represents a more reasonable share of the land and house price. That share has normally been around 20 percent, but has been driven much higher in recent years in markets with urban containment policy and related restrictive land use policy, such as California, Portland, Seattle, Denver and Washington DC. There is no higher domestic priority than a better standard of living and lower poverty rates. Housing is the largest expenditure item in household budgets. By unnecessarily driving up land prices through unreasonable regulation, public policy wrongly favors planning goals over human and social goals.

Your Business

Closing Delays? We Want to Help

Provide details about your experiences and NAHB will seek solutions with regulators.

Safeguard Your Online Reputation

It takes years to build a strong brand but just seconds for it to crumble. 

Industry Insight

Home Builders, Others File Suit Over Silica Rule

Numerous concerns raised regarding OSHA's final provisions.

Small Homes that Live Big

Jewel box homes offer high-end, luxury amenities in a compact, more affordable space.

Drones Take Flight in Record Numbers

An innovative way to showcase your property is gaining altitude. 

Green Building

A New Way to Finance Home Energy Upgrades

Fannie Mae unveils HomeStyle Energy mortgage.

Zero-Energy Homes Approach the Mainstream

Market demand has grown significantly.

Roof Coatings Can Boost Energy Savings

An energy saver that hides in plain sight. 

Economy

April 7, 2016

Number of Unfilled Construction Jobs Increasing

With the national unemployment rate at low levels, the labor force participation rate becomes an ever more important gauge of labor market conditions. If the size of the U.S. workforce does not grow, then the number of open but unfilled jobs will continue to increase and hinder the growth prospects of several industries, particularly residential construction.

Labor Markets

Construction Job Openings at Cycle High

The count of unfilled jobs in the overall construction sector reached a post-recession high in February.

March Employment Situation – Gains in Labor Force Participation

Jobs report shows continuously strong payroll gains and an uptick in the unemployment rate (but in a good way).

Construction Employment Grows Faster in New England, Pacific

Forty-three states and the District of Columbia experienced positive year-over-year changes in February. 

Macroeconomics

Housing's Share of GDP Unchanged in 4th Quarter

The home building and remodeling component of GDP, however, expanded for the fifth consecutive quarter.

Steady Growth for Private Residential Construction Spending

February's annual rate was the highest since November 2007.

GDP Growth in the 4th Quarter Keeps Getting Better

Revised estimates show faster growth of personal consumption expenditures and better exports. 

FOMC March Meeting: Expect an April Freeze

Financial turbulence early in the year motivated committee members to freeze funds rates until at least June. 

Personal Income Growth Holds Firm

February's increase was mostly driven by the rise in interest income, rental income and personal transfers.

Consumer Confidence Rebounds in March

A surge in job growth gave consumers a boost of economic optimism.

Housing Markets

Pending Sales Strong

February's Pending Home Sales Index grew to its highest level in seven months.

NAHB Estimates 55,000 Single-Family Tear-Down Starts in 2015

Tear-down construction has become a significant modus operandi in some parts of the country.

Home Prices Approach Long-Term Trend

Surging sales due to the much-anticipated increase in interest rates put upward pressure on house prices in late 2015.

Property Tax Revenue Grows Nearly 4%

Property owners paid $519 billion in taxes during the four quarters leading up to Q4 2015.