The NAHB used its Mid-Year Update on Thursday to energize its membership to become more involved in urging all government officials—especially those running to win or hold onto their office—to support legislation and policies that are beneficial to the housing market.
“Never before in our lifetime, and probably not since the 1930s, has housing needed to be more vocal and unified,” said Jerry Howard, the association’s CEO, who participated in the meeting's webinar with David Crowe and Jim Tobin, NAHB’s chief economist and senior vice president for government affairs, respectively.
The day before, the association joined its Florida and Tampa Bay chapters to conduct one of its “Rallies For Homeownership,” which Howard said was attended by more than 600 people and received wide local press coverage. The trade group started holding rallies last January in key election markets, with the next one scheduled for Detroit on July 20, and five more scheduled before the presidential election in Kansas City, Milwaukee, Columbus, Richmond, and Las Vegas.
NAHB’s officers, in fact, took great pains to emphasize how the association was working for their members on all political, regulatory, and legislative fronts, including meeting several times with the policy staffs of President Obama and his presidential opponent, former Gov. Mitt Romney.
Tobin identified several “critical issues” that the association will press the government to address during the lame-duck session of Congress between the election in November and inauguration in January. “The lame duck holds a lot of opportunity for us to play defense” on such matters as the extension of the Bush tax cuts and raising the debt ceiling. NAHB is also taking longer-term advocacy positions on issues that affect mortgage finance and qualifications, foreclosures, and appraisals.
Somewhat ironically, the trade group made its latest pitch for more membership involvement politically at a time when, despite anemic employment and economic growth, the housing section has been showing signs of recovery. Crowe, in his presentation, noted that since last September, permits were up nearly 27%, single-family starts rose 15%, sales of existing homes increased by 6% and sales of new homes jumped 21%.
Even prices for existing homes were positive during this period, albeit marginally. But one of Crowe’s main points was that the housing “market” is, in fact, hundreds of markets around the country that are recovering at different paces. Indeed, one of the arguments NAHB has been making to regulators is that they need to loosen the reins on banks to allow them to lend to builders and their customers in markets that are getting healthier.
As it is, credit remains extremely tight: any borrower with a FICO score under 730 can pretty much forget about getting a mortgage these days, said Crowe. And two-thirds of the association’s builders keep complianing that they are losing sales because of appraisals that, in most markets, continue to use short sales and foreclosures in their comparative valuations.
Builders are also hobbled by demographic forces that have not been favorable to housing lately. One of Crowe’s charts shows how household formations from 2007 through 2012 were only 44% of formations in the previous five years, and that renters exclusively accounted for the formation gains in the latter years.
All that being said, NAHB’s Improving Markets Index now includes 84 markets that, over the previous six months, have reported gains in employment, single-family permits and existing house prices.
The association continues to project double-digit increases in single- and multifamily starts and remodeling this year, with even more robust gains for single-family starts in 2013 (see chart).
During the webinar, Howard and Tobin shared their predictions about the upcoming elections. Both thought Romney faced an uphill climb because of Obama’s “fairly significant lead” in the Electoral College count. Neither thought either the Senate or House of Representatives would change hands, although the party in control of each could slip.
Howard noted, though, that regardless of who wins, “NAHB has a long history of working in a bipartisan fashion.”
John Caulfield is senior editor for Builder magazine.