Economists gathered for the NAHB's semiannual Construction Forecast Conference at the end of April predicted significant improvement beginning in the second half of 2003.
Nearly all the panelists agreed housing construction would likely equal or even slightly surpass last year's 1.7 million units, with single-family activity remaining especially strong. Interest rates will remain low, averaging between 5.75 percent and 6.25 percent this year for 30-year fixed-rate mortgages.
Panelists prognosticated about the day housing activity does slow. NAHB economist David Seiders noted that the housing component of GDP grew 12 percent in this year's first quarter--faster than any other part of the economy. "Residential fixed investment accounted for fully one-third of total GDP growth in 2003's first quarter, even more than the substantial support it provided in 2002," he said.
David Wyss, chief economist for Standard & Poor's, doesn't expect business spending to "take the lead" in the economy anytime soon because only 73 percent of the nation's industrial capacity is being used. He thus expects the recovery to be "disappointing" and "sluggish" for at least a few more quarters.
"The market will level off and will look a lot less exciting than in the '80s and '90s," added Wyss.
Those who are 50-plus aren't planning on spending their leisure time doing home maintenance. So says a study released at the end of April by the NAHB and Countrywide Home Loans. The NAHB released its survey of home builders and developers, during its Seniors Housing Symposium: "Building for Boomers and Beyond."
The study reveals that three-quarters of buyers aged 50 and up want homes with exterior-grounds and home-maintenance services included in a home close to where they currently live.
On April 11, the U.S. House of Representatives passed bill H.R. 6, the Energy Policy Act of 2003. "The legislation would spur builders to invest in market- and technology-driven initiatives that promote higher levels of energy efficiency at more reasonable costs," says Jerry Howard, NAHB executive vice president and CEO.
Provisions include a voluntary tax credit of $2,000 for each home built to 30 percent above the 2000 International Energy Conservation Code (IECC). This new level is more energy efficient than the U.S. government's current gold standard--Energy Star.
H.R. 6 also gives consumers a tax credit of up to $2,000 on the cost of qualified home remodeling projects that improve energy efficiency.
Green building is a growing trend, according to the NAHB, and the greatest advances are occurring inside today's homes, thanks to innovative applications, manufacturers, builders, and energy-efficiency experts.
One of the most promising techniques, the NAHB says, is "frost-protected shallow foundations." This technique allows builders in cold climates to start foundations 12 inches below grade instead of at a frost line that may be 3, 4 or 5 feet deep. Frost-protected shallow foundations save energy, excavation and construction time, labor, materials, and money, and disturb less soil than conventional foundations. Frost-protected insulated footings were used as early as the 1930s by Frank Lloyd Wright in the Chicago area; in recent years several thousand homes have been built utilizing the practice.