If you had asked me a year ago about my expectations for housing in 2008, I probably would have said that it was going to be very challenging, but that the housing market would begin a modest rebound late in the year.
Little did anyone know then that the economy was already in a recession and that 2008 would see the worst housing market—and the worst economic turmoil—since the Great Depression.
The economy and financial markets experienced a near-fatal meltdown requiring extensive government intervention; at times last fall, it seemed that hardly a day went by without a major institution failing or calling on the federal government for significant financial assistance.
In the housing market, circumstances were particularly bleak. Foreclosures rose to record levels, home values dropped in most markets, and builders nationwide confronted a serious ongoing credit crunch. Housing starts fell to the lowest level since 1945. The NAHB’s own Housing Market Index, which measures builder sentiment about the housing market, dropped into single digits to the lowest level ever reported.
Against this complex backdrop, the NAHB has worked—and continues to work nonstop—to bring relief to members. Just the short list of our activities includes intensive lobbying for decisive legislative action, extensive ongoing contact with key regulators, developing new products to help builders sell homes, providing educational programs addressing current market conditions—the list goes on and on. Our energies are always focused on helping members survive in the toughest market we have ever experienced and on doing everything possible to stabilize the housing market and get it back on its feet.
At this point, it is virtually impossible to predict with any accuracy what will happen in the housing market in the near future. Instead, I’d like to share with you some of the things that I’ve learned during the past year.
First, it is extremely important for an industry to have strong representation in Washington. There’s no question that the past year has been brutally harsh for home builders. But it would have been infinitely worse without the NAHB’s constant efforts on behalf of our industry with regulators and with elected officials on Capitol Hill.
It’s also important for an industry to have a strong association to provide resources and support when times are tough. From telephone seminars on timely topics to weekly news updates and marketing materials to help sell homes, the NAHB provides the resources and services that members need.
I’ve learned, too, that home builders are remarkably resilient in the face of enormous odds. Despite suffering from the impact of a broken economy, the turmoil of the financial markets, and a largely unjustified credit crunch, home builders remain committed to their important purpose—housing America.
Finally, I’ve learned that it’s important to keep your eye on the big picture. As I mentioned, home builders are extremely resilient. Our industry has weathered bad storms before, and we will again. But looking at the market over the long term, the U.S. is definitely on a growth path. Our population will rise by about 35 million over the next 10 years, and all of those people will need places to live.
The bottom line is that once we turn the corner on the housing downturn, the longer-term housing outlook is promising. And that’s good news to an industry that has heard far too little good news over the past year.