When the nation’s housing history is written with the benefit of 20/20 hindsight, I think it’s likely that 2013 will be viewed as the year we knew for sure that the housing recovery was here to stay. Our leading index shows that markets nationwide were rebounding and home-building activity was reaching for normal levels.
In October, two years after it was introduced, the NAHB/Wells Fargo Improving Markets Index (IMI) was replaced by the NAHB/Wells Fargo Leading Markets Index (LMI). The LMI shifted the focus from identifying markets that were recovering to identifying areas that are approaching or have exceeded their previous typical levels of activity. Both indexes are based on the same criteria: permits, house prices, and employment.
In addition to listing specific metro areas, the LMI includes a nationwide score. When the index was launched, the score indicated that the national market was running at 85 percent of normal activity. It will be a banner day when the index score shows that the market is back up to full speed nationwide.
Against the backdrop of the strengthening housing market, the NAHB worked hard in 2013 to address the numerous pressing issues affecting our industry while providing exceptional value to our members and their HBAs. Among those issues were a number of important housing finance concerns, particularly the need to restructure the housing finance system and to ensure its health and vitality over the long term.
The NAHB was front and center in the debate and made it clear to Congress that there must be a federal backstop to the nation’s housing finance system to ensure that 30-year, fixed-rate mortgages and reliable mortgage financing for multifamily housing remain readily available and affordable.
The NAHB worked closely with legislators, the appraisal community, and regulators to ensure that new homes are valued appropriately and are not unfairly compared with the many foreclosed and distressed sales that have occurred in recent years. The association also focused on developing alternate sources of financing for acquisition and development of land and the construction of new homes. But a lot more work needs to be done. As chairman, it is gratifying to me to know that the NAHB is regarded as the most authoritative source on the home building industry among legislators, regulators, and others in the policymaking community. Just like constructing a house, we will build on the solid foundation of credibility that the NAHB has worked so hard to establish and maintain for the benefit of its membership.
2013 also provided an exceptional example of how such ongoing efforts benefit members when the Supreme Court ruled last summer in Koontz v. St. Johns River Water Management District that the government can’t impose unreasonable exactions on developers in exchange for permit approvals. In essence, permitting demands—including monetary exactions—must be proportional to the project. The NAHB led a coalition of 16 associations and filed an amicus brief in the effort leading up to this landmark ruling, which has the potential to save millions of dollars for members nationwide. In its decision, the high court cited about a dozen cases spanning a number of years where the NAHB was an active litigant or filed amicus briefs.
Regulatory concerns are always at the top of NAHB’s agenda. The NAHB worked hard in 2013 to ensure that changes to the International Energy Conservation code and the International Residential Code would be cost-effective and provide tangible benefits to home buyers. At the final hearings, the NAHB successfully ensured that the majority of changes to the model codes were necessary, practical, and cost-effective.
In addition to advocacy achievements, NAHB continued in 2013 to provide first rate-business services to members, including expanded educational and networking opportunities.
I’m proud that I had the opportunity to lead the NAHB through such a productive year, and I know that membership will continue to be the best investment a member can make in their business and their future.