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Is the Dollar Doomed?
Friday, June 26, 2009
Don't look now. But the dollar is starting
to weaken again against the euro, pound and yen, leading some to wonder
if its days as the world's No. 1 currency are numbered.
The euro was trading at about $1.406 on Friday morning, near a two-week
high. Though the euro is still more than 10% below last summer's all
time-high of $1.6037, the dollar's recent sharp slide has some concerned.
On Friday, Chinese officials reiterated calls for a so-called super-sovereign
reserve currency that could supplant the dollar. China's opinion has
obvious weight considering that it is the largest owner of U.S. Treasurys.
But the talk of the dollar's imminent demise appears, as Mark Twain once
wrote, to be greatly exaggerated, according to some currency strategists.
"Talk of moving away from the dollar as a reserve is overblown.
There will still be a lot of faith in the dollar in bad economic times," said
Dan Cook, senior market analyst with IG Markets in Chicago.
"The
world is still looking to the U.S. to get out of this turmoil. Most blame
the U.S. for getting the world into this mess after all."
Surprisingly, continued economic weakness is probably good news for the
dollar because it could lead foreign investors to rush back into the
dollar as a safe haven.
Cook said that much of the rise in other currencies has been at the expense
of the dollar because it showed that investors were starting to believe
that the global economy was on the mend.
In other words, they didn't need the dollar anymore. But Cook said that
the dollar could quickly rebound if next week's jobs report for the month
of June shows a continued spike in the unemployment rate.
Even though stock market investors cheered the May job report, which
showed that the pace of job losses was decelerating, Cook said that investors
might not be so forgiving if the official unemployment rate inches closer
to the psychologically important level of double-digit status.
The unemployment rate hit 9.4% in May and economists are forecasting
a rate of 9.6% for June, according to Briefing.com.
"
Next week's jobs numbers could be huge. If the numbers are worse than
expected, that could lead to sustained strength for the dollar," Cook
said. "Until the U.S. consumer is really back in the game, it will
be difficult for a recovery to happen, especially if the unemployment
rate is heading toward 10%."
Source: CNN/Money
Retail Gas drops Every Day This Week; Oil Follows Wall Street
and Falls Below $70
Friday, June 26, 2009
Retail gas prices fell every day this week, easing off
their summer peak of $2.693 a gallon as U.S. storage facilities swelled
with unused supplies.
At the pump, the national average for gasoline dropped less than a penny
Friday to $2.658 a gallon, according to auto club AAA, Wright Express
and Oil Price Information Service.
A gallon of gas added an average of 22.4 cents in the past month as prices
surged for 54 straight days. But it's still cheaper than last year, when
prices spiked above $4.
Source: Associated Press
Consumer Sentiment Rises in June: Survey
Friday, June 26, 2009
U.S. consumer confidence rose in June to the highest
since February 2008, as expectations grew that the worst economic recession
since the Great Depression may be ending, a survey showed on Friday.
The Reuters/University of Michigan Surveys of Consumers said its final
index of confidence for June was at 70.8 from 68.7 in May, equaling February
2008's reading.
This was above economists' median expectation for a reading of 69.0,
according to a Reuters poll.
The index of consumer expectations edged lower, though, to 69.2 in June
from 69.4 last month.
Since the November 2008 low of 55.3, the sentiment index has gained 15.5
points, recouping about one-third of the loss posted since the peak in
January 2007.
"
Such a sizable gain has usually indicated that an end to the economic
downturn is on the horizon, as consumers begin to increase their spending
on houses, vehicles, and large household durables," the Reuters/University
of Michigan Surveys of Consumers said in a statement.
Source: Reuters
Economy
Shrinks at 5.5% Rate
Thursday, June 25, 2009
The U.S. economy shrank at an annual pace
of 5.5% in the first quarter, the government said Thursday, a slower
pace of decline than previously reported but still the second largest
quarterly drop in 27 years.
Economists had expected a 5.7% drop, according to a consensus estimate
from Briefing.com.
The first quarter of 2009 marked the third quarter in a row that the
economy contracted. It was the second worst drop in the measure since
the early 1980s -- behind only the fourth quarter of 2008, when GDP plunged
at an annual pace of 6.3%.
The government initially reported in April that gross domestic product
-- the broadest measure of the nation's economic activity -- fell at
an annual rate of 6.1% in the first quarter. In its first revision, the
government said that GDP declined at an annual pace of 5.7%.
Each quarter, the government revises the GDP twice. Thursday's report
marked the final revision.
Inventories, imports: The decline in GDP was less severe than initially
reported because of a downward revision to imports and an upward revision
to inventory investments, the Commerce Department said. If the economy
is spending less on another country's goods and spending more to build
its own stockpiles, then productivity is higher, working to pump up the
GDP.
Imports of goods and services decreased 36.4% in the first quarter, a
sharper decline than the 34.1% drop in imports that was previously reported.
Business inventories fell by $87.1 billion in the first quarter, a less
severe drop off than the $91.4 billion decrease reported in the first
revision. As a result, the subtraction to the annual rate of GDP growth
was 2.2 percentage points, rather than 2.34. Businesses cut their inventory
levels in the face of falling demand.
The drawdown in inventories will prove to be a catalyst for production
in coming quarters, said John Silvia, chief economist at Wachovia. "The
key going forward is that we have cleared out a lot of extra inventories."
Source: CNN/Money
Don't Hold Your Breath: Mortgage Rates Below 5% Are Gone for Good
Thursday, June 25, 2009
Waiting for mortgage rates to once again fall below 5%? Don’t bother.
Greg McBride, senior financial analyst at Bankrate.com, says those days
are gone for good. But, it doesn’t mean you’ve missed your
chance to act.
Last week, the average 30-year mortgage rate was still
a relatively low 5.38%, according to Freddie Mac.
Also, don’t forget there’s always the risk of even higher
rates in the near future. As McBride puts it, “It’s like
someone sets a table in front of you with a stack of cash. You have to
grab the money while it’s there.” He’s got a point.
A $400,000 mortgage at 6% costs just shy of $2,400 a month. That same
mortgage with 5.35% rate: $2,240 – a savings of $160 a month.
If you’re in the market to buy, prices are also in your favor.
Median home values are down more than 16% compared to this time last
year. Buying a house is like getting married, MacBride says, “You’ve
got to be in it for the long haul and have to be ready for the financial
commitment.” If you can say, “I do” on both accounts
than the market may have already bottomed for you.
Source: Yahoo Finance
New-Home Sales Virtually Flat in May
Wednesday, June 24, 2009
Sales of newly built, single-family homes in May held virtually even with the previous month, declining less than one percentage point to a seasonally adjusted annual rate of 342,000 units, according to data released by the U.S. Commerce Department today.
"In the midst of the prime home buying season, builders report that a number of factors are limiting new-home sales. These include consumer concerns about job security, potential buyers' inability to sell their existing homes, and problems with appraisals coming in too low," said Joe Robson, chairman of the National Association of Home Builders (NAHB) and a home builder from Tulsa, Okla. "The latter issue is directly related to the use of distressed properties (foreclosures and short sales) as comps, which disproportionately impacts assessed values of nearby homes."
"Today's report provides further evidence that the recovery is going to be a slow one as the housing market continues to bump along, trying to find a bottom," added NAHB Chief Economist David Crowe. "The good news is that, even as the sales pace leveled in May, inventories of unsold new homes continued to shrink for a 25th consecutive month - a trend that is helping bring supply and demand into better alignment and thereby setting the stage for an eventual market recovery."
New-home sales declined 0.6 percent to a seasonally adjusted annual
pace of 342,000 units in May. Meanwhile, the number of new homes for
sale fell 2.3 percent to 292,000, which is a 10.2-month supply at the
current sales pace.
Regionally, the decline in new-home sales was entirely
focused on the South, where sales fell 8.5 percent for the month. Meanwhile,
sales of
new homes gained 1.3 percent in the West and posted double-digit gains
of 28.6 percent and 18.6 percent in the Northeast and Midwest, respectively.
Source: NAHB
Durable Goods Orders Up in May; New Home Sales Dip
Wednesday June 24, 2009
Orders to U.S. factories for manufactured goods from
computers to aircraft surged in May for a second straight month. And
a gauge of business investment rose last month by the most in nearly
five years.
Together, the data Wednesday signal that the recession could be at
or near a bottom.
Yet new-home sales fell unexpectedly last month. It was a reminder that
any recovery in the housing market will be long and slow.
Even so, investors focused on the positive news on durable-good orders
and business investment, before Federal Reserve policymakers announce
their decision on interest rates Wednesday afternoon.
The Dow Jones industrial average added about 80 points in midmorning
trading. Broader stock averages also surged more than 1 percent.
The Commerce Department said demand for durable goods rose 1.8 percent
last month, far better than the 0.6 percent decline that economists expected.
It matched the rise in April, with both months posting the best performance
since December 2007, when the recession began.
Orders for non-defense capital goods, a proxy for business investment
plans, jumped 4.8 percent, the biggest increase since September 2004.
That could signal that businesses have stopped trimming their investment
spending.
The back-to-back monthly gains in orders for durable goods -- items expected
to last at least three years -- were further evidence that a dismal stretch
for U.S. manufacturers may be nearing an end. But analysts say any sustained
rebound is months away.
"
This is a pretty good report and welcome news in the hard-pressed (capital
expenditure) sector," M. Cary Leahey, an economist at New York-based
consulting firm Decision Economics, wrote in a research note.
Still, new new-home sales dropped 0.6 percent in May to a seasonally
adjusted annual rate of 342,000, from a downwardly revised April rate
of 344,000.
Economists had expected a sales pace of 360,000 last month, according
to Thomson Reuters. Sales were down nearly 33 percent from May last year.
The median sales price, $221,600, was down 3.4 percent from a year earlier
but up 4.2 percent from April.
American companies have been forced to trim millions of workers as they
struggle with the longest U.S. recession since World War II. U.S. businesses
also have suffered from a sharp drop in exports as many overseas markets
struggle with their own downturns.
Source: Associated Press
Home Sales Rise - While Prices Fall 17%
Tuesday, June 23, 2009
Existing home sales rose in May, as increasingly
affordable home prices and a first-time tax credit attracted hesitant
buyers.
The National Association of Realtors reported that existing home sales
ticked up 2.4% last month to a seasonally adjusted annual rate of 4.77
million million units compared to the downwardly-revised rate of 4.66
million in April.
The sales missed expert forecasts of 4.82 million annual units, according
to a consensus estimate of analysts compiled by Briefing.com, and are
off 3.6% from the 4.95 million-unit pace 12 months ago.
The median price of homes sold in May was just $173,000, a 16.8% year-over-year
drop.
Low mortgage rates and affordable home prices helped draw in hesitant
buyers, said Lawrence Yun, NAR chief economist, in a prepared statement.
Yun said another likely boost was the $8,000 tax credit, which the
Obama administration made available for qualified first-time home buyers.
The slight sales increase helped reduced some of the supply of homes
on the market. Total housing inventory fell 3.5% to 3.8 million existing
homes for sale. That's a 9.6-month supply, down from a 10.1-month supply
in April.
Source: CNN/Money
Where Housing Will Be in 2012
Friday, June 19, 2009
Home prices are likely to fall for the next year, then stabilize, with
a rebound in 2012 as the overall economy takes off again.
Americans have not seen a boring housing market since the last millennium.
You know -- the average, ordinary kind of market where supply just about
matches demand, prices are steady, and real estate ceases to be a topic
of daily conversation. Instead, we've had six years of upside craziness
followed by three years of downside terror. Now we're in a tug-of-war
between those who think we've finally found a bottom and those who are
convinced that the overhang of unsold homes is going to push prices considerably
lower.
By 2012 we may finally get back to blissful boredom. With any luck, three
years should be long enough for the U.S. economy to recover and for the
nation's housing inventory to shrink to more normal levels. At that point,
housing will return to its old ways, with prices governed not by national
mood swings and global credit crises but by local issues ranging from
zoning to immigration to job growth.
Prices? While they're likely to keep falling a while longer under the
weight of foreclosures, the market is definitely closer to the bottom
than the top. "We expect prices to drop for another year and then
stabilize before starting to rise with incomes," says Standard & Poor's
Chief Economist David Wyss. Moody's Economy.com predicts the S&P/Case-Shiller
U.S. National Home Price Index, maintained by data specialist Fiserv,
will fall about 16% this year before regaining ground. Based on the National
Association of Realtors national median home price of $180,000 for the
fourth quarter of 2008, that would mean a median of $152,000 at the end
of 2009 and then a rebound to $179,000 by the end of 2012.
The economy should be growing briskly again by 2012, according to Moody's
Economy.com. In May the firm predicted gross domestic product would shrink
3% this year before growing 1.4% in 2010, 4.7% in 2011, and a robust
5.8% in 2012. It's also looking for home buying and building to return
to their pre-bubble paces -- no higher and no lower -- by 2012.
Even if the economy performs as projected, there's still plenty that
could go wrong in the housing market. Because conditions have been so
unusual, "it's very hard for the model to extrapolate, based on
past experiences, what's going to happen this time," says Moody's
Economy.com Senior Economist Celia Chen. In a study of global real estate
markets, economists Kenneth Rogoff of Harvard University and Carmen Reinhart
of the University of Maryland found that home prices fall for an average
of six years after a major financial crisis. That would put the U.S.
bottom in 2012, or later.
Another risk is that potential buyers will stay out of the housing market,
no longer trusting in home appreciation to do their saving for them.
Writes David Rosenberg, the former Merrill Lynch economist who is now
chief economist at Toronto-based asset management firm Gluskin Sheff & Associates: "Baby
boomers are still in the discovery process on oversized real estate being
more of a ball and chain than a viable retirement investment asset." Rosenberg
also is concerned that an aging population won't need the kind of big
houses erected during the boom. "The high end of the market will
be in a bear phase," Rosenberg says in an interview.
So much has gone wrong with housing lately that it's easy to imagine
worst-case scenarios. But in the more likely case, the market will fall
some more, bounce off its lows, then gradually start growing.
Source: Business Week
Jobless
Rate Rises in Nearly All States
Friday, June 19, 2009
Forty-eight states and the District of Columbia
recorded unemployment rate increases in May, the government reported
Friday. One state registered a rate decrease, and one state had no rate
change.
Over the year, jobless rates were higher in all 50 states and the District
of Columbia.
Michigan once again led the nation with a 14.1% jobless rate, up from
12.9% a month earlier, followed again by Oregon at 12.4%, up from 12%
in April. Thirteen states have rates above 10%.
Vermont recorded no change in its rate, while Nebraska's rate declined
by 0.1 percentage point to 4.4%.
Nebraska and North Dakota tied for the
lowest unemployment rates in the nation.
The national unemployment rate rose to a 26-year high of 9.4% in May.
Nonfarm payroll employment decreased in 39 states and increased in 11
states and the District of Columbia in May. The largest over-the-month
decrease in jobs occurred in California, followed by Florida, Texas,
and Michigan.
The spike comes a month after the unemployment rate declined in 21 states
in April.
Source: CNN/Money
Mortgage Rates Decline
Thursday, June 18, 2009
Thirty-year fixed-rate mortgages (FRMs) averaged 5.38% for the week
ending June 18, down from last week's average of 5.59%, according
to Freddie
Mac. Last year at this time, the 30-year FRM averaged 6.42%. The
15-year FRM averaged 4.89% this week, down from last week's average
of 5.06%.
A year ago at this time, the 15-year FRM averaged 6.02%. One-year
adjustable-rate mortgages (ARMs) averaged 4.95% this week, down from
last week's average
of 5.04%. At this time last year, the one-year ARM averaged 5.19%.
Mortgage Applications Continue to Decline
Wednesday, June 17, 2009
The Mortgage Bankers Association's Index of Mortgage Applications was at a reading of 514 for the week ending June 12, a decrease of 15.8% from the previous week. The refinance component of the index decreased 23.3%, while the purchase component decreased 3.5%. The refinance share of mortgage activity decreased to 54.1% of total applications, from 59.4% the previous week.
Consumer
Prices Rise Less Than Expected in May
Wednesday, June 17, 2009
Consumer prices rose less than expected in May and
posted the steepest annual drop in 59 years, according to government
data released Wednesday, fresh evidence that the recession is keeping
inflation in check.
Low prices will make it easier for the Federal Reserve at its meeting
next week to keep a key short-term interest rate near zero, where it
has been since December. Bond prices ticked up earlier this month on
concerns that signs of an improving economy would force the Fed to raise
rates later this year.
But most economists consider a rate increase unlikely until next year.
Still, as higher government spending pushes this year's deficit toward
a record of nearly $1.85 trillion, many economists warn that inflation
could be a threat in two to three years.
"
Inflation may be coming, but it's not here yet and likely won't be for
some time," Richard Moody, chief economist at Forward Capital,
wrote in a note to clients.
Source: Associated Press
BMHC Files for Chapter 11
Tuesday,
June 16, 2009
Boise, Idaho-based BMHC announced early Tuesday morning that
it filed a plan of reorganization under Chapter 11 of the U.S. Bankruptcy
Code. BMHC will reduce its outstanding funded debt, establish a new revolving
credit facility and lower annual interest expenses once the plan kicks
in.
In a statement released this morning, the company said it "plans
to continue to operate as usual while it restructures its balance sheet
and will honor all of its commitments to customers. All of the company's
locations are open today and are continuing to serve customers in the
normal course."
The move punctuates a difficult period for the pro dealer that seemed
to rise and fall with the fate of the biggest builders. In the first
quarter of 2009, the company posted a net loss of $45.2 million, compared
with a $33.9 million loss in the same quarter of 2008. For all of last
year, the company reported a net loss of $215 million.
The company, which ranked fifth on the 2008 Home Channel News Pro Dealer
Scoreboard, closed 42 outlets and consolidated 15 locations last year.
In fiscal 2008, BMHC had sales of $1.3 billion.
BMHC pointed to commitments for $80 million in debtor-in-possession financing.
The agreement with lenders, plus "the fact that our new financing
is coming from existing lenders, is a sign that our business partners
have confidence in our strength as a company and our long-term potential," said
chairman and CEO Robert Mellor.
Source: Home Channel News
Stock to Exit Chapter 11
Tuesday,
June 16, 2009
Stock Building Supply has announced the confirmation of its
Chapter 11 reorganization plan by the U.S.
Bankruptcy Court for the
District of Delaware. The court order paves the way for the Raleigh,
N.C.-based company to emerge from bankruptcy protection in the coming
weeks, the announcement said.
The post-Chapter 11 firm will be a joint venture between The Gores Group
(owning 51%) and former parent company Wolseley (a 49% stake). As part
of the transaction, Gores has committed to invest $75 million in Stock
and provide a $125 million revolving credit bridge facility. Stock has
also arranged $100 million debtor-in-possession financing from Wolseley,
but to date, this credit line has not been drawn upon.
Since Stock’s Chapter 11 filing and joint venture agreement on
May 5, the company has closed more than 80 locations across the country.
According to court papers, many of these involved broken leases or facilities
that are now up for sale. The company has reportedly pulled out of Colorado,
Wyoming, Idaho, Utah, Montana, Minnesota and Wisconsin.
“
The court’s confirmation of our plan is a major milestone in the
recapitalization of our business,” said Joe Appelmann, Stock’s
president and CEO. “We have taken a very hard look at our business,
taking proactive steps to reshape the company and realign it with the
current market reality.”
Source: Home Channel News
U.S. Housing Starts Soared in May
Tuesday, June 16, 2009
U.S. builders broke ground on more houses than forecast in May, offering a sign that the industry's slump, now in its fourth year, may be approaching an end.
The 17 percent increase in housing starts to an annual rate of 532,000 followed a 454,000 pace the prior month, the Commerce Department said today in Washington. Building permits, an indicator of future construction, also rose more than estimated.
Lower prices and tax incentives are attracting buyers, potentially laying
the groundwork for housing to rebound and reduce its drag on the economy.
Still, rising unemployment is causing many Americans to hold off on big
purchases and foreclosures continue to mount, so a sustained homebuilding
recovery may take longer to emerge, analysts say.
Its fair to say that we have found a bottom in housing, though the concern
is that the bottom is at a very low level, said Zach Pandl, an economist
at Nomura Securities International Inc. in New York. We have a long
way to go to reach more normal levels of activity.
Housing starts were projected to rise to a 485,000 annual pace, after a previously reported 458,000 the prior month, according to the median forecast of 71 economists surveyed by Bloomberg News. Estimates ranged from 450,000 to 600,000. Permits rose 4 percent to a 518,000 pace from a 498,000 rate the previous month. They were forecast to increase to a 508,000 annual rate.
Construction of single-family homes rose 7.5 percent to a 401,000 rate,
the third straight monthly gain. Work on multifamily homes, such as townhouses
and apartment buildings, jumped 62 percent to an annual rate of 131,000.
Source:
Bloomberg News
FHA Issues Condo Project Approval Guidance
Monday
June 15, 2009
New regulatory guidance designed to streamline
the Federal Housing Administration's approval process for condominiums
nationwide is expected to have an immediate impact in the state of
Michigan, where single-family projects are frequently developed under
a condominium structure, according to the National Association of Home
Builders (NAHB).
While most of the new rules announced on June 12 by the U.S. Department of Housing and Urban Development will not take effect until October 1, a provision that eliminates the need for FHA approval of "site condominiums" that are prevalent in Michigan, but may also exist in other states, will take effect immediately, opening the door for thousands of home buyers to use low-downpayment FHA financing to purchase new single-family homes.
"With FHA loans becoming an increasingly significant share of the market, this new rule will help home builders in Michigan and other areas to sell more new homes to buyers who are having difficulty obtaining conventional financing," said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. "We are hopeful this will provide a much-needed boost to struggling housing markets such as Michigan's."
In addition, HUD's Mortgagee Letter 2009-19 authorizes certain FHA-approved lenders to review and approve condo projects internally. It also streamlines the environmental review requirement for condo projects while setting presale and owner-occupancy requirements at 50 percent.
With the economic downturn and an acute shortage of low-downpayment
mortgage money, FHA has become increasingly popular among young buyers.
Under the FHA program, consumers can put down as little as 3.5 percent
on the purchase of their home
Source: NAHB
Builder Caution Reflects Fragile Housing Market in June
Monday June 15, 2009
Indicating that single-family home builders remain
cautious and concerned about the fragile state of today's economy and
housing market, the National Association of Home Builders/Wells Fargo
Housing Market Index (HMI) declined one point to 15 in June.
"
The outlook for home sales has improved somewhat in recent months, due
largely to implementation of the first-time home buyer tax credit and
gains in housing affordability," said NAHB Chairman Joe Robson,
a home builder from Tulsa, Okla. "However, looking forward, home
builders are facing a few headwinds, including expiration of the tax
credit at the end of November; a recent upturn in interest rates; and
especially the continuing lack of credit for housing production loans."
"As expected, the housing market continues to bump along trying to find a bottom," said NAHB Chief Economist David Crowe. "Meanwhile, builders are taking their cue from consumers, who remain uncertain about the economy and their own situation. Builders are also finding it difficult to complete a sale because customers cannot sell their existing homes."
Source: NAHBEndowment Grand Will Help Students Enter Workforce with Professional Designations
Friday, June 12, 2009
The National Housing Endowment (NHE) has awarded
an $82,784 grant to the National Association of Home Builders (NAHB)
and the Home Builders Institute (HBI) to create a program that will
provide professional designations to students graduating with residential
construction management degrees.
"Through grants such as this, the National Housing Endowment works to help the residential construction industry develop more effective approaches to home building and to ensure there is an ample and well-trained supply of future workers and leaders," said Endowment Chairman F. Gary Garczynski, 2002 NAHB president and a home builder from Woodbridge, Va.
The programs will be modeled after a 2008 joint effort with Purdue University that was created through an NHE Homebuilding Education Leadership Program (HELP) grant. NAHB and HBI worked with the university's residential construction management program faculty to integrate NAHB/ HBI course content into existing university curriculum that would then qualify participating students to earn a Certified Green Professional (CGP), Certified Aging-in-Place Specialist (CAPS), or a Residential Construction Superintendent (RCS) designation upon graduation. Eight Purdue University students are slated to earn a professional designation in 2009.
M. M. "Mike" Weiss, GMR, GMB, CAPS, ARCS, chairman of HBI and a home builder from Carmel, Ind., said, "By enabling graduates to enter the workforce with an NAHB professional designation, we are nurturing the future of our industry and providing these students with a competitive advantage for highly sought-after jobs in the housing sector."
The grant funds will be used to create a similar program at universities that offer housing industry-related degrees and maintain an active NAHB Student Chapter. They will help cover a portion of the fees for students enrolling in the program and expenses for faculty to participate in NAHB's Train the Trainer course.
"These students will improve their skills through on-the-job experience
and build relationships with local home building industry professionals
prior to entering the workforce," said Benjamin Graham, GMB, chair
of NAHB's education committee and a home builder from Middleburg, Va. "Potential
employers will also recognize their commitment to a career in the industry
and to continued professional growth."
Source: NAHB
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Green Act the Right Approach for Affordable, Sustainable Homes, Says NAHB
Thursday, June 11, 2009
In testimony before Congress today, the National Association of Home Builders (NAHB) praised H.R. 2336, the GREEN Act of 2009, which sets new green building and sustainability benchmarks for properties that get financial assistance from the federal Department of Housing and Urban Development.
But NAHB President Jerry Howard also left members with a warning: H.R. 2454, the other major piece of climate change legislation now before Congress, includes requirements that conflict with H.R. 2336 - making the GREEN Act obsolete before it's even signed.
"I am hopeful that this Subcommittee will be able to restore the balance necessary to truly incentivize green building and preserve affordability as the debate over climate change continues," Howard said. "It would be terribly disappointing to see the good faith effort and collaborative work on the GREEN Act displaced with unworkable federal mandates as envisioned in H.R. 2454."
Howard told lawmakers on the House Subcommittee on Housing and Community Opportunity that the association's members agree with the bill's approach, which will ensure cost-effective energy-efficiency improvements to HUD-financed homes.
In accompanying written testimony, Howard detailed the strides NAHB members have made toward the creation of more sustainable housing stock and the education, certification and training programs the association has launched to further that growth.
"We have a major role to play in the manner in which energy efficiency and sustainable technologies are introduced into the housing stock," Howard said. "Despite the downturn, NAHB has not wavered in its commitment to promoting green building and energy efficiency in a manner that is affordable and effective, and legitimately improves energy efficiency for the next generation of housing."
Howard asked Congress to rework some sections of GREEN Act's text: It is unclear in the current draft whether new efficiency requirements apply to Federal Housing Authority-financed home purchases as well as to direct subsidy programs or competitive grants.
"The scope of the GREEN Act and the new programs that it creates
is ambitious, but the intent is thoughtful and NAHB hopes that the resources
will ultimately be available to develop the programs into effective tools
to promote sustainable principles," he said.
Source: NAHB
Statement from NAHB Chairmant Joe Robson on Enhancing the Home Buyer Tax Credit
Thursday, June 11, 2009
The following statement was issued by Joe Robson, chairman of the National Association of Home Builders (NAHB), in regard to enhancing the home buyer tax credit:
"The National Association of Home Builders supports the Business Roundtable's efforts to promote policies that will stimulate housing demand. NAHB looks forward to working with all interested parties in the business community, on Capitol Hill and in the Obama Administration to foster new ideas and policies that will help to get housing and the economy back on track, particularly at a time when the recovery is facing a number of significant challenges.
"Due to expire at the end of November, the current $8,000 first-time home buyer tax credit has proved to be an effective policy targeted toward a specific demographic group that is showing tangible results. Enhancing this credit would help to stoke the economic engine at a key point in our recovery.
"When the debate
begins in earnest, we look forward to working with Congress to consider
all appropriate tax measures to restore the
health of housing and the nation's economy."
Source: NAHB
Material Stops 2,000-Degree Fires -- But Not in California
Thursday, June 11, 2009
An eco-friendly building material might have saved some of the 80 homes
destroyed in a recent wildfire in Southern California. But it can't be
used there.
The masonry material, called autoclaved aerated concrete or AAC, can
withstand a 2,000-degree fire for four hours, according to Underwriters
Laboratories' test results.
"
I just think the material's awesome. There's nothing like it," said
Doug Edwards, an architect whose Edwards Design Group designs and builds
green homes in the Scottsdale, Arizona, area. "It's the best building
material in the world."
AAC is a mixture of sand, water, lime, portland cement and aluminum powder
that is formed into blocks and cured in an autoclave, a sort of industrial
pressure cooker. It has been used in Europe, where it was invented, for
more than 70 years.
Besides being fire-resistant, AAC also deadens sound, is energy efficient,
is impervious to termites, is bulletproof and waterproof, generates no
waste in its creation, and can be recycled, its fans say.
A sort of concrete bread, it's full of tiny air pockets, making it one-fifth
the weight of traditional concrete, which means more can be transported
with less use of fuel. Workers can cut it and shape it with hand tools,
and its thermal qualities significantly lower energy use, experts say.
Exton Quinn, an architect who fled her Santa Barbara, California, home
as wildfires approached in early May, learned about the material at a
green building seminar.
It's a natural insulator, it's completely nontoxic, it's just absolutely
fabulous," she said. "And with our homes going up here, we
should be building with this. ... The idea that we can't build with a
fireproof material, I think, is insane."
But in California, wildfires aren't the only concern. Small earthquakes
are part of daily life in many areas, and stronger ones occur fairly
frequently. And that's the regulators' problem with AAC.
"
Autoclaved aerated concrete cannot be used to resist seismic forces because
it has not been seismically tested," said David Walls, executive
director of the California Building Standards Commission in Sacramento.
The restriction is based on guidelines from the National Earthquake Hazards
Reduction Program, he said.
The next International Building Code, slated to take effect in 2011,
will permit use of AAC in more places that have minimal seismic activity,
Walls said. But even under those somewhat relaxed standards, most of
California would not qualify, he added.
Advocates for the product say California's qualms are baseless -- and
political.
"
We've done all the testing, and the testing showed the material works
fine in any seismic area," said Felipe Babbitt, a Mesa, Arizona,
engineer who helped develop code standards for AAC block. "It has
not been approved by California not because it can't perform, but because
they have not done a thorough review of the testing data and are not
convinced that it performs."
California's standards are no different from those of other states, Walls
insisted.
"
We base ours off the national model code. For the most part, for private
buildings in California, we do not add any extra stuff," he said. "So
it would be strictly based on what is the national standard."
That's not entirely true, Babbitt said.
California is the only state that adopted the 2006 International Building
Code without the companion housing code that includes acceptance of AAC
in seismic areas, he said. The two documents were meant to be applied
in tandem, he said.
"
A lot of it's politics," Babbitt said. "Everybody's protecting
their own interests. You've got the wood industry protecting theirs,
you've got the steel protecting theirs, and the AAC is just going up
against all these people."
The AAC industry hasn't been around long enough yet to earn its place
in the code, he said. Wood, on the other hand, faces no challenge despite
its obvious vulnerability to wind, fire, flood, pests, mold and earthquakes,
he said.
"
Each state has different code adoption laws and processes," Walls
responded by e-mail. "I cannot explain what or why any other state
makes their choices. I can tell you that California has never adopted
a residential code."
Source: CNN
Statement from NAHB Chairman Joe Robson on Enhancing the Home Buyer
Tax Credit
Thursday, June 11, 2009
The following statement was issued by Joe Robson,
chairman of the National Association of Home Builders (NAHB), in regard
to enhancing the home buyer tax credit:
"The National Association of Home Builders supports the Business Roundtable's efforts to promote policies that will stimulate housing demand. NAHB looks forward to working with all interested parties in the business community, on Capitol Hill and in the Obama Administration to foster new ideas and policies that will help to get housing and the economy back on track, particularly at a time when the recovery is facing a number of significant challenges.
"Due to expire at the end of November, the current $8,000 first-time home buyer tax credit has proved to be an effective policy targeted toward a specific demographic group that is showing tangible results. Enhancing this credit would help to stoke the economic engine at a key point in our recovery.
"When the debate begins in earnest, we look forward to working with Congress to consider all appropriate tax measures to restore the health of housing and the nation's economy."
Source: NAHB
Green Act the Right Approach for Affordable. Sustainable Homes, Says NAHB
Thursday, June 11, 2009
In testimony before Congress today, the National
Association of Home Builders (NAHB) praised H.R. 2336, the GREEN Act
of 2009, which sets new green building and sustainability benchmarks
for properties that get financial assistance from the federal Department
of Housing and Urban Development.
But NAHB President Jerry Howard also left members with a warning: H.R. 2454, the other major piece of climate change legislation now before Congress, includes requirements that conflict with H.R. 2336 - making the GREEN Act obsolete before it's even signed.
"I am hopeful that this Subcommittee will be able to restore the balance necessary to truly incentivize green building and preserve affordability as the debate over climate change continues," Howard said. "It would be terribly disappointing to see the good faith effort and collaborative work on the GREEN Act displaced with unworkable federal mandates as envisioned in H.R. 2454."
Howard told lawmakers on the House Subcommittee on Housing and Community Opportunity that the association's members agree with the bill's approach, which will ensure cost-effective energy-efficiency improvements to HUD-financed homes.
In accompanying written testimony, Howard detailed the strides NAHB members have made toward the creation of more sustainable housing stock and the education, certification and training programs the association has launched to further that growth.
"We have a major role to play in the manner in which energy efficiency and sustainable technologies are introduced into the housing stock," Howard said. "Despite the downturn, NAHB has not wavered in its commitment to promoting green building and energy efficiency in a manner that is affordable and effective, and legitimately improves energy efficiency for the next generation of housing."
Howard asked Congress to rework some sections of GREEN Act's text: It is unclear in the current draft whether new efficiency requirements apply to Federal Housing Authority-financed home purchases as well as to direct subsidy programs or competitive grants.
"The scope of the GREEN Act and the new programs that it creates is ambitious, but the intent is thoughtful and NAHB hopes that the resources will ultimately be available to develop the programs into effective tools to promote sustainable principles," he said.
Source: NAHB
FHA
Tax Credit Monetization Helps Home Buyers With Upfront Costs
Tuesday June 9, 2009
First-time home buyers who would otherwise qualify
for the $8,000 tax credit, but don't have the money for a down payment
or closing fees, may now be able to get a loan to help cover those
upfront costs.
The U.S. Department of Housing and Urban Development (HUD) announced on May 29 that the Federal Housing Administration (FHA) will allow state housing finance agencies to provide second mortgages "monetizing" the tax credit so that borrowers can use the funds toward their down payments and closing costs for the purchase of homes with FHA-insured mortgage loans.
"This is great news for thousands of families who want to take advantage of today's low interest rates, competitive prices, great selection and the federal tax credit that is only available until Nov. 30, but could not save enough money for a down payment and closing costs," said National Association of Home Builders Chairman Joe Robson, a home builder from Tulsa, Okla.
HUD also announced that FHA-approved lenders may purchase the tax credit from the home buyer in advance, so that the home buyer can use the funds for closing costs or to make a down payment in addition to the 3.5 percent minimum. Home buyers who go directly to FHA-approved lenders will still need to come up with the 3.5 percent minimum down payment that is required for an FHA-insured loan.
Home buyers previously would be able to use the funds from the tax credit only after filing their federal tax returns and had to come up with the pre-purchase costs on their own.
NAHB estimates that 40,000 more homes will be purchased due to the new
FHA monetization program, in addition to the 160,000 sales already expected
as a result of the tax credit.
Source: NAHB
Builders Serving Active Adult Home Buyer Market See More Consumer Interest
Thursday, June 4, 2009
Builders of single-family housing for the active adult home buyer market reported an increase in traffic of prospective buyers during the first quarter of this year, according to the 55+ Housing Market Index (55+ HMI) released today by the National Association of Home Builders (NAHB). The component measuring traffic rose to 14, up from nine in the last quarter. The reported sales component, however, dropped five index points to 12 from the previous quarter's 17. The drop in the reported sales component pushed the overall 55+ HMI down from 16 to 14.
"A strong and growing number of retirees and empty-nest households are interested in either downsizing or moving to a more user-friendly home - especially if it's near their existing community," said David Crowe, NAHB's chief economist. "But the current market still presents significant obstacles to homeowners who need to sell an existing home before buying a more appropriate one. That situation is holding many mature consumers back from moving."
Source: NAHB
Job Losses Slow Dramatically
Friday, June 5, 2009
Job losses slowed dramatically in May, according
to the latest government reading on the battered labor market, even as
the unemployment rate rose to a 26-year high. But some experts cautioned
that the job market remains weak.
Employers cut 345,000 jobs from their payrolls in the month, down from
the revised decline of 504,000 jobs in April.
This was the fewest jobs lost in a month since last September, when the
bankruptcy of Lehman Brothers caused a crisis in U.S. financial markets
and choked off credit for many businesses. Economists surveyed by Briefing.com
had forecast a loss of 520,000 jobs in May.
There were still widespread job losses, as most sectors of the economy,
including manufacturing, construction, retail, and business and professional
services posted declines in jobs.
But there were also some signs of growth, notably in education and health
services, as well as the leisure and hospitality sector. Nearly one third
of industries added jobs during the month, the highest level of gains
since last October.
Still, the unemployment rate rose to 9.4% from 8.9% in April. Economists
expected unemployment would increase to 9.2%.
Strangely enough, economists said the rise in unemployment is partly
a sign of an improved jobs outlook. That's because people who had stopped
looking for work started looking once again, and thus were classified
as unemployed rather than "not in the labor force" - which
is how the Labor Department counts most discouraged workers.
"
As conditions improve more people flock to the labor market," said
Robert Brusca of FAO Economics. He believes the economy is poised to
start adding jobs before the end of this year.
"
Jobs are doing what they do at the end of recessions and in early recoveries," he
said. "No one can be optimistic enough to catch the turn when it
comes."
But other economists cautioned that even though it was a better-than-expected
jobs report, there are still signs of weakness.
Kurt Karl, chief economist at Swiss Re, said he doesn't expect a monthly
gain in jobs until at least the middle of 2010. With employers still
cutting jobs and hours, he said consumers won't have enough money to
spur an economic recovery in the near term.
"
I think things are turning for the better. But it's a disappointingly
slow turn," he said. "Consumers can't consume more with this
kind of picture."
Karl pointed out that the loss of 345,000 jobs in a month was worse
than any one-month drop in the previous three recessions. There have
now been
6 million jobs lost since the start of 2008, with nearly half of them
occurring in the first five months of this year.
"
That 345,000, while an improvement, is still a lot of jobs," he
said. "We're not out of the woods yet."
Source: CNN/Money
Bolstering GSE's Key to Future of Nation's Housing Finance System
Thursday, June 4, 2009
In contemplating the future status of housing government
sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, the National
Association of Home Builders (NAHB) yesterday told Congress it is critical
for the federal government to provide a backstop to the housing finance
system to ensure a reliable and adequate flow of affordable housing
credit.
Testifying before the House Subcommittee on Capital Markets, Insurance and Government-Sponsored Enterprises, NAHB Chairman Joe Robson, a home builder from Tulsa, Okla., said that NAHB supports changes to the structure and operations of Fannie Mae and Freddie Mac to enable them to support mortgage market liquidity and address affordable housing finance needs without creating excessive taxpayer risk.
"NAHB believes that the federal backstop must be a permanent fixture in order to ensure a consistent supply of mortgage liquidity, as well as to allow rapid and effective responses to market dislocations and crises. It has been clearly demonstrated that the private sector, unaided, is not capable of consistently fulfilling this role," said Robson.
"Fannie Mae and Freddie Mac should be recast, retaining federal backing but limited primarily to providing credit enhancement of mortgage-backed securities," he added. "Limited portfolio capacity should be permitted to accommodate mortgages and housing-related investments that do not have a secondary market outlet, although Fannie Mae and Freddie Mac should have the flexibility to support the mortgage market in times of crisis, such as the conditions we are currently experiencing."
NAHB outlined several principles for federal government support and structure of the housing finance system:
- The federal government must provide a permanent backstop to the housing finance system in order to ensure available and affordable mortgage credit in all geographic areas and under all economic circumstances.
- Secondary market entities (Fannie Mae, Freddie Mac and the Federal Home Loan Banks) should retain sufficient federal backing to allow them to reduce mortgage rates and fees.
- Fannie Mae and Freddie Mac should focus on the core business of securitizing mortgages and limited portfolio capacity should be permitted to accommodate mortgage and housing-related investments that do not have a secondary market outlet, including acquisition, development and construction (AD&C) loans.
- Fannie Mae and Freddie Mac must have the authority and ability to provide reliable liquidity to the mortgage markets during times of stress, which requires flexibility in terms of portfolio composition and size over the mortgage credit cycle, or with changing conditions in the secondary mortgage markets.
- Secondary market entities must be adequately capitalized.
- The secondary market must have a private sector component with risk shared by participants/shareholders, with governance by a board that includes public interest, housing industry and shareholder representatives.
- Flexibility in pursuing new mortgage programs and products should
be balanced with accountability and safety and soundness.
Robson stressed that these changes should not proceed until the current
financial turmoil passes and the markets return to more normal conditions.
Source: NAHB
Pending Home Sales Rise 6.7 Percent in April
Tuesday,
June 2, 2009
The number of U.S. homebuyers who agreed to purchase
a previously occupied home in April posted the largest monthly jump
in nearly eight years, a sign that sales are finally coming to life
after a long and painful slump.
The National Association of Realtors said Tuesday its seasonally
adjusted index of sales contracts signed in April surged 6.7 percent
to 90.3,
far exceeding analysts' forecasts. It was the biggest monthly jump
since October 2001, when pending sales rose 9.2 percent.
Economists were encouraged by the report, and stock indexes advanced
modestly.
"
This is yet another positive indication that the bottoming process is
forming," Jennifer Lee, an economist at BMO Capital Markets, wrote
in a note to clients. "Now if only prices would stabilize."
Economists surveyed by Thomson Reuters expected the index would edge
up to 85 from a reading of 84.6 in March. Typically there is a one-
to two-month lag between a contract and a done deal, so the index is
a barometer
for future existing home sales.
In early trading, the Dow Jones industrial average added about 20 points
to 8,741, and at times traded above 8,776.39, its finish for 2008.
Still, some economists wonder whether rising mortgage rates will dampen
home sales. Nationwide average rates for 30-year-fixed rate mortgages
are around 5.3 percent this week compared with about 5 percent a week
earlier, according to Bankrate.com.
And analysts cautioned prices will take longer to stabilize, because
of the glut of unsold properties on the market.
"
Even if sales volumes rebound, home prices will keep falling under the
weight of the massive inventory overhang," wrote Ian Shepherdson,
chief U.S. economist at High Frequency Economics.
The Realtors' index was 3.2 percent above last year's levels and has
risen for three straight months after hitting a record low in January.
A nearly 33 percent sales increase in the Northeast and a 9.8 percent
jump in the Midwest led the overall surge. Sales contracts rose 1.8
percent in April from a month earlier in the West, but fell 0.2 percent
in the
South.
The big boost likely reflects the impact of a new $8,000 tax credit
for first-time homebuyers that was included in the economic stimulus
bill
signed by President Barack Obama in February. Since buyers need to
finish their purchases by Nov. 30 to claim the credit, "we expect greater
activity in the months ahead," Lawrence Yun, the Realtors' chief
economist, said in a statement.
Source: Associated Press
US Consumer Spending Dips; Savings Rate Surges
Monday, June 1, 2009
Frugal U.S.
consumers trimmed spending in April -- although by less than expected
-- as rising unemployment kept pocketbooks in check and motivated Americans
to save.
With income growth far outpacing spending, Americans' personal savings rate
zoomed to 5.7 percent, the highest since February 1995, the Commerce Department
reported Monday.
Consumer spending dipped 0.1 percent in April. That was slightly less than
the 0.2 percent reduction economists were expecting, although it marked the
second straight month that consumers cut back. The pullback came after a burst
of buying at the start of the year as shoppers took advantage of deeply discounted
merchandise and other promotion.
Americans' incomes -- the fuel for future spending -- jumped by 0.5 percent,
following two straight months of declines. The improvement in April was due
to tax cuts and benefit payments flowing from President Barack Obama's stimulus
package, the government noted. Wages and salaries, however, were flat in April.
Source: Associated Press
Hud Secretary Donovan Unveils Details of Plan to Monetize Home Buyer Tax Credit
Friday, May 29, 2009
In a speech before the National Association of Home
Builders (NAHB) Board of Directors, HUD Secretary Shaun Donovan today
unveiled new rules that will help spur the housing market by allowing
consumers to use the $8,000 first-time home buyer tax credit to help
cover the costs of closing on an FHA-insured home.
"We believe this is a real win for everyone," said Donovan. "Today,
the Obama Administration is taking another important step toward accelerating
the recovery of the nation's housing market. Families will now be able
to apply their anticipated tax credit toward their home purchase right
away."
"
With the spring home buying season in full bloom, Secretary Donovan's
move to enable buyers to access the tax credit at the time of closing
could not have come at a better time," said NAHB Chairman Joe
Robson, a home builder from Tulsa, Okla. "This new rule will further
encourage state housing finance agencies to develop programs to monetize
the tax credit."
Source: NAHB
April New
US Home Sales Inch Upward
Thursday May 28, 2009
Sales of newly built U.S. homes were flat in April,
but are now 7 percent above the rock-bottom lows of January, another
indication the three-year housing downturn could be ending.
The Commerce Department said Thursday that sales rose 0.3 percent in
April to a seasonally adjusted annual rate of 352,000. But the increase
came from a downwardly revised rate of 351,000 in March.
"
It's still tough to be a builder," wrote economist Joel Naroff of
Naroff Economic Advisors. "New home sales remain near
the bottom."
The median sales price fell to $209,700, down almost 15 percent drop
from a year earlier, but up nearly 4 percent from March. Prices are
likely to remain weak for months as builders try to price their stock
of unsold
homes against bargain-priced foreclosures.
There were 297,000 new homes for sale at the end of April, down 4 percent
from 310,000 in March and the lowest number of properties on the market
in nearly eight years. At the current sluggish sales pace, it would
take more than 10 months to exhaust the supply of new homes on the
market.
"
We aren't seeing a huge upswing in market conditions, but we aren't seeing
things fall apart again, either," wrote Mike Larson, real
estate analyst at Weiss Research.
But the competition from foreclosures continues unabated.
A record 12 percent of homeowners with a mortgage are behind on their
payments or in foreclosure as the housing crisis spreads to borrowers
with good credit, the Mortgage Bankers Association said Thursday.
The foreclosure rate on prime fixed-rate loans doubled in the last
year, and now represents the largest share of new foreclosures.
The pain, however, is spreading throughout the U.S. as job losses take
their toll. The number of newly laid off people requesting jobless
benefits fell last week, the government said Thursday, but the number
of people
receiving unemployment benefits was the highest on record. These borrowers
are harder for lenders to help with loan modifications.
Source: Associated Press
New-Home Inventories Continue Shrinking in April
Thursday
May 28, 2009
The number of newly built single-family homes
on the market shrank to 297,000 units in April, thinning supplies
to their
lowest level since May 2001, according to government figures released
today. The report noted that the pace of new-home sales held virtually
even with the previous month, at a seasonally adjusted annual rate
of 352,000 units.
"The fact that the new-homes inventory is now below the 300,000 mark shows that builders have made substantial progress in winnowing down their backlogs to a much more comfortable level," noted Joe Robson, chairman of the National Association of Home Builders (NAHB) and a home builder from Tulsa, Okla. April's results mark two consecutive years of monthly declines in the number of unsold new homes.
"This continued reduction in the new-homes inventory helps bring supply in line with demand, which is an important step toward the market's recovery. We can expect the pace of new home sales to bounce along the bottom a bit before picking back up towards the end of this quarter," noted NAHB Chief Economist David Crowe.
Sales of newly built, single-family homes recorded a marginal 0.3 percent gain to 352,000 units in April from a downwardly revised pace in March. Meanwhile, the inventory of new homes for sale declined 4.2 percent to 297,000 units, which is a 10.1-month supply at the current sales pace.
Regionally, the pace of new home sales was mixed in April. No change was recorded in the Northeast or Midwest, while the South posted a nearly 2 percent increase and the West a 3.8 percent decline.
Source: NAHB
Evidence Mounts That Recession May Be Ending
Thursday
May 28, 2009
The economy is throwing off signals that it may be bumping along
the bottom, and the ride is likely to be rough.
Some of recent green lights include: a rise in demand for big-ticket
items like major appliances, a decline in applications for unemployment
benefits and a housing market that is no longer in free-fall.
The data lend weight to the growing notion, supported by more than
90 percent of economists in a recent survey, that the deepest recession
since the 1930s may be drawing to a close.
"
The developing trend signals this recession — the longest and deepest
of the postwar era — is losing momentum," Wachovia economic
analyst Tim Quinlan said in a note to clients.
But the economic picture is still a bit blurry.
For example, the Commerce Department reported Thursday that orders
for durable goods like appliances, heavy machinery and aircraft posted
their
biggest one-month gain in 16 months, up 1.9 percent from March. But
March orders were revised downward to a decline of 2.1 percent, leaving
the
two-month total at nearly a wash.
Still, the key indicator has risen in two of the past three months
after having recorded six straight declines. Analysts believe this
could be
signaling that the deep recession in manufacturing may be bottoming
out. But they believe a sustained rebound is still some distance away.
Other positive signs this week have come from the housing sector. Sales
of new homes rose a tiny 0.3 percent in April to a seasonally adjusted
annual rate of 352,000 from a downwardly revised rate of 351,000 in
March.
Although the direction was positive, the result was short of expectations
of economists surveyed by Thomson Reuters, who expected a sales pace
of 360,000 units. (Nearly 1.3 million new homes were sold at the height
of the boom in 2005.)
"
The new home sales numbers seem to confirm what the single-family housing
starts and permits numbers imply — that the market for new single-family
homes is flattening, indeed, that it may have hit bottom in January — and
that the recovery will be a slow one," IHS Global Insight economist
Patrick Newport said in a note.
Sales of existing homes, a far larger part of the market, were up 2.9
percent in April, a trade group reported Wednesday. But prices are
still showing steep year-over-year declines for both new and existing
homes.
Source: Associated Press
Initial
Jobless Claims Drop Unexpectedly
Thursday May 28, 2009
The tally of newly laid-off people requesting
jobless benefits fell last week, the government said Thursday, a
sign that companies
are cutting fewer workers.
But the number of people continuing to receive unemployment benefits
rose to 6.78 million -- the largest total on records dating back to
1967 and the 17th straight record week. The figures for continuing
claims
lag behind initial claims by one week.
The Labor Department said the number of initial claims for unemployment
insurance dropped to a seasonally adjusted 623,000, from a revised
figure of 636,000 in the previous week. It was below analysts' estimates
of
635,000.
The government also said new U.S. home sales were almost flat last
month, indicating the housing market's recovery will likely be slow
and gradual.
And an industry report said a record 12 percent of homeowners with
a mortgage were behind on their payments or in foreclosure.
Stocks gave up early gains after the two disappointing housing reports.
The Dow Jones industrial average fell about 35 points.
The four-week average of initial jobless claims, which smooths out
fluctuations, dropped slightly to 626,750. That figure is about 30,000
below the peak
for the recession reached in early April. Some economists say the drop
is a sign the recession is bottoming out. Jobless claims reflect the
number of job cuts by companies.
Still, claims remain far above levels in a healthier economy. Weekly
initial claims were 378,000 a year ago.
And the relentless rise in continuing claims for jobless benefit means
the unemployment rate, which reached 8.9 percent in April, will rise
in May, economists said. Many economists expect the rate to approach
10 percent by the end of this year.
Even if layoffs are slowing, jobs remain scarce. A net total of more
than 5.7 million jobs have been lost since the recession -- the longest
since World War II -- began in December 2007.
Among the states, California reported the largest increase in claims
of 5,447, which it attributed to layoffs in the construction, trade,
and service industries. State data also lags initial claims data by
a week.
The next largest increases were in North Carolina, Georgia, Washington
and Florida.
Michigan reported the largest decrease in claims, a drop of 9,758,
which it said was due to fewer layoffs in the auto industry. The next
largest
decreases were in Kentucky, Illinois, Indiana and Ohio.
Source: Associated Press
12
pct.Are Behind on Mortgage or in Roreclosure
Thursday May 28, 2009
A record 12 percent of homeowners with a mortgage are
behind on their payments or in foreclosure as the housing crisis spreads
to borrowers with good credit. And the wave of foreclosures isn't expected
to crest until the end of next year, the Mortgage Bankers Association
said Thursday.
The foreclosure rate on prime fixed-rate loans doubled in the last year,
and now represents the largest share of new foreclosures. Nearly 6 percent
of fixed-rate mortgages to borrowers with good credit were in the foreclosure
process.
At the same time, almost half of all adjustable-rate loans made to borrowers
with shaky credit were past due or in foreclosure.
The worst of the trouble continues to be centered in California, Nevada,
Arizona and Florida, which accounted for 46 percent of new foreclosures
in the country. There were no signs of improvement.
The pain, however, is spreading throughout the country as job losses
take their toll. The number of newly laid off people requesting jobless
benefits fell last week, the government said Thursday, but the number
of people receiving unemployment benefits was the highest on record.
These borrowers are harder for lenders to help with loan modifications.
President Barack Obama's recent loan modification and refinancing plan
might stem some foreclosures, but not enough to significantly alter the
crisis.
"
It may be too much to say that numbers will fall because of the plan.
It's more correct to say that the numbers won't be as high," said
Jay Brinkmann, chief economist for the Mortgage Bankers Association.
Source: Associated Press
Economists: Recession to end in 2009
Wednesday,
May 27, 2009
The end of the recession is in sight, according
to a new survey of leading economists.
While the economy is showing signs of stabilizing, the recovery will
be more moderate than is typical following a severe downturn, said the
National Association for Business Economics Outlook in a report released
Wednesday.
The panel of 45 economists said it expects economic growth will rebound
in the second half of 2009. However, the group still expects to see a
decline in second-quarter economic activity.
"
The good news is that the NABE panel expects economic growth to turn
positive in the second half of this year, with the pace of job losses
narrowing sharply over the remainder of this year and employment turning
up in early 2010," said NABE president Chris Varvares in a written
statement.
Almost three out of four survey respondents expect the recession will
end by the third quarter of 2009, the report said.
But 19% predicted that a turnaround won't come until the fourth quarter,
and 7% said it may not come until early 2010. None of the panelists expected
the recession to continue past the first quarter of next year.
Source: CNN/Money
April existing home sales rise by 2.9 percent
Wednesday, May 27, 2009
Sales of previously occupied homes rose modestly from
March to April as buyers who were brave enough to dive into the market
took advantage of prices that were 15.4 percent below year-ago levels.
The National Association of Realtors said Wednesday that home sales rose
2.9 percent to an annual rate of 4.68 million last month, from a downwardly
revised pace of 4.55 million in March.
The results slightly beat economists' forecasts. Sales had been expected
to rise to an annual pace of 4.66 million units, according to Thomson
Reuters.
The median sales price plunged to $170,200, down from $201,300 in the
same month last year.
That was the second-largest price drop on record
after January, when prices fell 17.5 percent.
The number of unsold homes on the market at the end of April rose almost
9 percent from a month earlier to nearly 4 million. That's a 10-month
supply at the current sales pace.
"
We still need a continuing and consistent rise in home sales to get the
inventory down," said Lawrence Yun, the group's chief economist.
Only then, economists say, will prices stabilize and eventually recover.
Another big problem, Yun noted, is the lack of activity at the higher-end
of the housing market, among properties priced at $750,000 or higher.
Interest rates are much higher for loans above $730,000 that cannot be
purchased by Fannie Mae or Freddie Mac. And that's sapping demand for
expensive properties.
"
It's just stalled. completely stalled," Yun said. The Realtors group
is pushing for the Federal Reserve to start buying up those loans, even
if they are not backed by Fannie and Freddie. It also wants the higher
loan limits to apply to the whole country, not just expensive areas like
California and New York.
Source: Reuters
Homes:
Almost 20% Cheaper
Tuesday, May 26, 2009
The home price slide accelerated during the
first three months of 2009, according to a report issued Tuesday.
The S&P/Case-Shiller National Home Price index, a bellwether
of real-estate market direction, plunged a record 19.1% during
the quarter compared
with the first three months of 2008. That followed an 18.2%
drop last quarter.
The Case-Shiller 20-city index dropped 18.7% year-over-year, also a record.
It fell 18.5% during the last three months of 2008. This index has plummeted
32.2% from its July 2006 peak and has fallen 32 straight months.
The national index covers almost all homes sold throughout the United
States and is reported quarterly, while the 20-city index reports sales
in 20 major metro areas and represents a cross section of the national
market. The 20-city index comes out every month.
"
Declines in residential real estate continued at a steady pace into March," said
David Blitzer, chairman of the Index Committee at Standard & Poor's
in a prepared statement. "All 20 metro areas are still
showing negative annual rates of change in average home prices
with nine of the metro
areas having record annual declines."
The ugly report was somewhat unexpected, according to Mike Larson, a
real estate analyst for Weiss Research.
"
The market was anticipating better results," he said. "There
had been some signs of increased sales in post-bubble markets."
But that sales increase has not translated into higher prices. Bargain
hunting - bottom fishing really - for foreclosures and other distressed
properties has driven sales volume up while further depressing prices.
The foreclosure sales, which many appraisers used to ignore when they
evaluated home prices because they represented outliers rather than typical
sales, now have to be accounted for.
"
These used to be anomalies," said Larson. "Now, when
sales are dominated by foreclosures, where they represent 50%
or more of [transactions],
they are the market."
The market plague has burst far beyond its Sun Belt epicenter, as the
latest month's data reveals. In March, Minneapolis recorded the largest
monthly price loss of any metro area in the 20-city index, losing 6.1%
compared with February. That is the biggest single-month decline for
a city in index history.
Sun-Belt cities still had the largest year-over-year declines in March,
with Phoenix prices down 36%, Las Vegas off 31.2% and San Francisco dropping
30.1%.
Two cities have now have fallen more than 50% from their peak prices:
Phoenix is down 53% since June 2006 and Las Vegas is off 50.4% from its
August 2006 high. Dallas prices suffered the smallest loss from peak,
just 11.1% since June 2007.
Source: CNNMoney.com
Multifamily Builder Confidence Up From Record Lows
Tuesday,
May 26, 2009
Recent hints of optimism in the housing industry
appear to have spread to the multifamily sector, according to the latest
results of Multifamily Rental Market Index (MRMI) and the Multifamily
Condo Market Index (MCMI), released today by the National Association
of Home Builders (NAHB).
"Multifamily builders are beginning to see slight improvement in the current market for new rental and for-sale units, and anticipate even better times in the next six months," said David Crowe, NAHB's chief economist. "The components of the index measuring customer interest rose significantly; the index level of calls from prospective renters rose 14 points, to 50.9, and the index reflecting traffic in prospective condo buyers jumped 25 points."
The indexes gauging current production conditions remain low, but two of them - low-rent units and for-sale units - increased from the fourth quarter 2008. The index for production of low-rent units increased nearly four points to 26.3. The for-sale sector, after two quarters of index levels in the single digits, now shows starts for condo developments at an index level of 14.5, down only slightly from last year's first quarter.
NAHB's Multifamily Market Indexes are derived from quarterly surveys of multifamily builders and developers, in which they rank their perceptions of the current conditions and expectations for the new future as "good," "fair," or "poor." The responses are used to create a scale of 0 to 100, with a rating of 50 generally indicating that the number of positive responses is about the same as the number of negative responses.
The near future appears more promising to builders than any time since the first quarter of 2008. Builder expectations for starts of affordable rentals six months from now hit 38.1; market rate rentals were at 31.1, and for-sale units rose nearly 13 points to hit 25.4.
While rental vacancy rates remain high - dropping slightly from last quarter's 8.7 percent to 8.5 percent - both numbers are lower than last year's first quarter number - 10.3 percent. And the index numbers for calls from prospective renters was up to 50.9, after two quarters in the high 30s. Condo traffic index numbers shot up from the mid-teens in the last two quarters to 39.3, approximating the 40.2 level of the first quarter of 2008 - possibly in response to the $8,000 first-time buyer tax credit included in the stimulus package.
According to Crowe, "The stock of existing homes for rent and for sale is greater than the consumer demand right now, and is in direct competition with new supply. As that inventory is absorbed, and as new households form during the economic recovery, the demand for multifamily rentals will rise, and production will return to a more 'normal' level."
Source: NAHB
First Remodeled Home Certified to the National Green Building Standard
Thursday, May 21, 2009
A recently completed remodeling project in Munster, Ind. is the first home remodel to earn certification under the National Green Building Standard, the National Association of Home Builders (NAHB) announced today.
The 1,100-square-foot ranch home built in 1974 was renovated by Lyng Builders, a Franklin, Ill., custom home building and remodeling company, after floodwaters filled the basement as well as two feet of the first floor.
Working within a tight budget to repair substantial structural damage, Lyng Builders also persuaded the home owner to make improvements that can help save on utility bills by decreasing energy and water consumption and to obtain national green certification through the NAHB Research Center, which trains and accredits third-party inspectors.
For projects to be certified, remodelers must address a range of factors, including energy, resource and water efficiency and indoor environmental quality in the newly renovated home.
"With 111 million existing homes, remodeling these energy and water
guzzlers must be a top priority to achieve a more efficient housing stock," said
NAHB Chairman Joe Robson, a builder and developer in Tulsa, Okla. "NAHB
leads the housing industry by helping professionals take advantage of
the first and only national standard to certify green remodeled homes."
Source:
NAHB
States: It's taxes, taxes and more taxes
Wednesday. May 20, 2009
Facing mounting budget deficits and seeing few areas left to cut spending,
states increasingly are turning to the only option they have left: raising
taxes.
Though public officials are loath to do this, particularly during a recession,
many governors are increasing personal income taxes, raising corporate
income taxes, hiking cigarette and gas taxes, or broadening sales taxes.
Already, 16 states have taken this unpopular step this fiscal year, and
another 17 have proposed tax hikes for the coming year, according to
the Center on Budget and Policy Priorities, a policy group. In many cases,
they are making small increases in specific taxes, rather than imposing
a broad rate hike.
"
The question isn't whether to raise taxes, it's which taxes to raise," said
Linda Bilmes, professor of public finance at Harvard's Kennedy School
of Government.
Source: CNN/Money
Single-Family Starts and Permits Edge Higher in April
Tuesday, May 19, 2009
Production of single-family homes edged upward in
April as builders responded to improving conditions for new-home buyers,
according to newly released figures by the U.S. Commerce Department.
While overall starts fell 12.8 percent to a record-low seasonally adjusted
annual pace of 458,000 units, the decline was entirely confined to
the multifamily sector, where production fell 46 percent to a 90,000-unit
pace for the month, while single-family starts posted a 2.8 percent
gain to 368,000 units.
"With some of the best home-buying conditions of a lifetime now in place - including historically low mortgage rates, affordable prices and a first-time home buyer tax credit - single-family builders are starting to see the light on the horizon as more consumers realize they can now obtain the home of their dreams," said NAHB Chairman Joe Robson. "Meanwhile, the extreme difficulty that builders are encountering in obtaining financing for new multifamily structures has ground production in that sector almost to a halt."
"A severe credit crunch for acquisition, development and construction
financing and a lack of investor interest in Low Income Housing Tax Credits
are the main factors that are keeping apartment builders from moving
ahead with new projects, along with the competition from excess inventory
that's on the market," noted NAHB Chief Economist David Crowe. "Ultimately,
the logjam in builder financing must be broken in order for housing construction
to provide the boost that the national economy needs to get back on track."
Source: NAHB
Builder Confidence Continues to Rise in May
Monday, May 18, 2009
Builder confidence in the market for newly built,
single-family homes improved for a second consecutive month in May
to the highest level since September of 2008, according to the National
Association of Home Builders/Wells Fargo Housing Market Index (HMI),
released today. The HMI rose two points to 16 this month.
"Builders are responding to what they perceive to be some of the best home buying conditions of a lifetime," said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. "You're not likely to get a better deal in terms of mortgage rates than what's available right now. Combine that with the affordable prices, multitude of home choices and $8,000 tax credit for first-time buyers that are now available, and you have a very appealing set of reasons to make a move."
"The fact that the May HMI continued to tick up from April's five-point increase provides confirming evidence that the improved confidence level was no fluke," added NAHB Chief Economist David Crowe. "This continued increase indicates that home builders feel we're at or near the bottom of the market and that positive signs lie ahead for builders and potential home buyers, provided that builder access to production credit significantly improves."
Crowe also noted that recent announcements by the Department of Housing and Urban Development that would enable home buyers to use the new $8,000 tax credit at the closing table are especially encouraging. "We appreciate Secretary Donovan's efforts to make the tax credit more useful to buyers by addressing the biggest hurdle to first-time purchasers - having enough cash for a suitable down payment," he said.
Source: NAHB
Remodeling
Market Shows Signs of Recovery
Thursday, May 14, 2009
The residential remodeling market showed signs of
improvement during the first quarter of 2009 with significant growth
in all indicators, according to the latest National Association of
Home Builders' (NAHB) Remodeling Market Index (RMI). The current
market conditions measure rose to 34.5 from 25.5 in the fourth quarter
of
2008. Future expectations jumped to 30 from a historic low of 18.6
the previous quarter.
The RMI measures remodeler perceptions of market demand for current and future residential remodeling projects. Any number over 50 indicates that the majority of remodelers view market conditions as improving. The RMI has been running below 50 since the final quarter of 2005, following decreasing remodeling expenditures since that time.
"Remodelers are starting to receive more calls for bids and requests for proposals, although getting customers to sign for a job continues to remain a challenge," said NAHB Remodelers Chairman Greg Miedema, CGR, CGB, CAPS, CGP, a remodeler from Tucson, Ariz. "While the size of the jobs is smaller, remodelers are optimistic about this uptick in market activity."
The index component for national market conditions for major additions and alterations increased to 32.7 from 19.4 in the fourth quarter of 2008, while minor additions improved to 39.1 from 31.5. Maintenance and repair remained also climbed, to 30.4 from 23.6.
Measures for future expectations showed healthy growth during the first quarter, with the component for calls for bids rising to 34.2 from 20.6. The backlog of remodeling jobs component climbed to 28.5 from 18.4, and appointments for proposals jumped to 35.3 from 19.1. Finally, the component that measures the amount of work committed for the next three months rose to 21.8 from 16.4.
"Remodelers say things are looking up from the doldrums of the
fourth quarter," said NAHB Chief Economist David Crowe. "While
conditions remain below average and are down slightly from this time
last year, the gains over the last quarter, and improvement in market
expectations suggest a spark to the start of recovery in the remodeling
market."
Source: NAHB
HUD
Action Allows Home Buyers to Use $8,000 Tax Credit for Down Payments
on FHA-Insured Loans
Wednesday, May 13, 2009
HUD Secretary Shaun Donovan's decision to allow
consumers to use the $8,000 first-time home buyer tax credit to help
cover their downpayment and closing costs on FHA-insured mortgages
will be a big boost to the housing market, according to the National
Association of Home Builders (NAHB).
"
The biggest obstacle for first-time buyers is coming up with a downpayment," said
NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. "We commend
Secretary Donovan for acting decisively to enable buyers to access the
tax credit at the time of closing. This will help to stimulate home sales,
stabilize housing and get the economy back on track."
The measures announced by HUD would allow FHA-approved lenders; federal, state and local government agencies; and FHA-approved non-profit organizations to supply home buyers short-term or "bridge loans" up to the amount of the $8,000 first-time home buyer tax credit.
Longer term loans secured by second liens can also be used by government
agencies and FHA-approved non-profit organizations to facilitate home
sales. Several state housing finance agencies have introduced such programs
and a number of agencies are considering that possibility.
Source: NAHB
Home Prices Slide 14%
Tuesday, May 12, 2009
The steep slide in home price accelerated
at a record pace during the first three months of 2009, according to
an industry report issued Tuesday.
The national median home price of single family homes sold during the
first quarter fell 13.8% to $169,000 year over year, and 6.2% compared
with the last quarter 2008, according to the National Association of
Realtors (NAR). That was the largest year-over-year decline in the 30-year
history of the report.
NAR attributed much of the loss to two factors: First-time homebuyers,
who are often entry-level buyers, accounted for about half of all purchases
during the quarter. And many buyers took advantage of the deeply discounted
prices of foreclosed properties and short sales. These "distressed
properties" typically sell for 20% less than traditional homes,
according to NAR. These homes also accounted for about half of all transactions.
"
Traditional homes in good condition have held their value much better,
so owners shouldn't be overly concerned about median prices," said
NAR president Charles McMillan, in a prepared statement.
Sales volume was weak as well. Homes sold at a 4.59 million annualized
rate during the quarter, off 3.2% from the last three months of 2008
and down 6.8% from first quarter 2008.
NAR's chief economist, Lawrence Yun, characterized it as a lull before
an upturn. "Housing affordability conditions are at record high
levels, " he said, "and we expect a measurable increase in
home sales during the second half of the year, which would help stabilize
prices in most areas."
Pat Newport, a real estate analyst with IHS Global Insight found NAR's
state sales volume statistics especially telling - and far from positive. "That
tells me the market is still not healthy," he said.
Year-over-year sales volume increased substantially in only a few states,
mostly one-time boom areas. Sales were way up in Nevada (116.8%), California
(80.6%), Arizona (50.2%) and Florida (25%), as well as Virginia (12.2%)
and Minnesota (11.9%). Everywhere else they were down for the year.
"
Where prices are down the sharpest, sales volume is up the most," said
Mike Larson, a real estate analyst for Weiss Research. "In the post-bubble
markets, we've seen more rationality come in."
"
Middle income workers can now actually buy a home without having to stretch
or get themselves into some crazy mortgage," he added. "Declining
prices are not part of the problem, they're part of the solution."
Source: CNN/Money
NAHB Honors the Year's Best in Green Home Building
Monday, May 11, 2009
Home building industry leaders honored the best in
green residential design and outstanding advocacy efforts at the National
Association of Home Builders (NAHB) National Green Building Awards.
The awards dinner on May 8 kicked off the 11th annual NAHB National Green Building Conference, which was held in Dallas last weekend. Don Ferrier of Ferrier Custom Homes in Fort Worth, honored as the 2007 Green Builder Advocate of the Year, served as master of ceremonies.
In a trying year for the home building industry, when housing starts dropped to record lows in a sputtering economy, green homes represent "hope and the future, and the future is green home building," Ferrier said. "The ladies and gentlemen we honor this evening understand that. These awards honor their leadership and their practical example to others in the industry."
The winners were:
Concept Home of the Year: CVH Inc., for a home in Coupeville ,Wash. Tight insulation and other energy-efficient features meant homeowners spent $76 on electricity in the first month they lived there - and that was before the builder installed photovoltaic panels on the rooftop and the monthly bill became a credit, rather than a debit, Ferrier said.
Affordable Home of the Year: Imagine Homes, San Antonio, Texas. The company noted for its cost-effective techniques to attract first-time buyers was honored for the second year in a row.
Luxury Home of the Year: Solaire Homebuilders of Bend, Ore. With beautiful interior finishes, this custom home was built with reclaimed and recycled materials and designed to be 60 percent more energy efficient than required by code.
Production Home of the Year. Celebrate by Del Webb, an active-adult community in Fredericksburg, Va., is taking green features to a larger scale and now certifying the homes in this new development to the National Green Building Standard.
Single-family Remodeling Project of the Year. Honors went to Red-B Construction for a Durham, N.C., home with striking design and extensive use of deconstruction techniques that improve resource efficiency.
Multifamily Remodeling Project of the Year. Hardwick G.C. Inc. of Orlando, Fla., turned an early 20th-century bungalow into a charming duplex that has a rainwater harvesting system, native landscaping and other water-efficient features.
Multifamily Rental Project of the Year. Tonti Properties' 270-unit community in Frisco, Texas, is the first Energy Star-certified development in the region. The company created an on-site tree farm during contruction to enable landscapers to replant trees moved during the building process.
Condominium Project of the Year. Onion Flats LLC of Philadelphia created an 8-unit infill project in the Northern Liberties neighborhood featuring slick, modern design, solar panels, green roofs and great city views.
Townhouse Project of the Year. Asdal Builders LLC was honored for a New Jersey rental development that caters to senior citizens and focuses on sustainable, low-maintenance design and cost-effective geothermal heating.
Development of the Year. The community of Woodlands Edge in Little Rock, Ark., developed by Rocket Properties LLC has nature trails, wildlife preservation areas and an extensive education program for its residents focused on environmental stewardship of the grounds.
Build San Antonio Green and the Missoula (Mont.) Building Industry Association were honored as the local green home building programs of the year, while the city of Chicago was named Governmental Advocate of the Year for its extensive voluntary energy-efficiency improvement programs and for encouraging green roofs on high-rise buildings.
EcoBroker International won Group Advocate of the Year honors for its green building education efforts among real estate brokers.
Donna Shirey, a longtime NAHB Remodelers leader and green-building professional from Seattle, was honored as Remodeling Advocate of the Year.
Architect Michelle Kaufmann, known for her groundbreaking green and modular design, was named Individual Advocate of the Year.
John Freer, a longtime Missoula BIA leader and founder of the association's green building council, was honored as NAHB Green Builder Advocate of the Year.
Source: NAHB
Green Scholarship Established by NAHB's National Housing Endowment
Monday, May 11, 2009
A new National Housing Endowment scholarship will
help pay for students to attend the National Association of Home Builders
National Green Building Conference. The scholarship was announced at
a dinner honoring winners of the NAHB National Green Building Awards.
Founding contributor Tommy Ford Construction endowed the scholarship in honor of Texas entrepreneur T. Boone Pickens, who gave the keynote speech at the awards dinner in Dallas on May 8.
"The construction management students and the young men and women just getting started in this business need the information, the education and the networking that the NAHB National Green Building Conference provides," said Conference Working Group Chair and Mount Pleasant, Mich., builder Joanne Theunissen at the awards dinner.
The new scholarship fund will provide support to students in a two-year or four-year design and construction education and training program. The National Housing Endowment will manage the fund.
The NAHB Green Building Subcommittee will determine eligibility requirements and recommend recipients for the scholarship.
"Tommy Ford Construction is a green building leader in the Dallas area, and with this contribution, the company is establishing itself as a green building benefactor as well," said Subcommittee Chair Eric Borsting.
"This is a wonderful gift from Tommy Ford Construction. The education, training and other events at the NAHB National Green Building Conference represent a valuable experience for these students," Borsting said.
"With the help of generous contributions like this, the National Housing Endowment continues to invest in the future of the home building industry by recognizing the demand for green building education. Tommy Ford Construction's contribution to the National Housing Endowment will make a difference in students' careers and lives by giving them access to the most advanced green building technologies found at the NAHB Green Building Conference," said Endowment Board of Trustees Chair F. Gary Garczynski.
Source: NAHB
Jobs: A Little Less Bleak
Friday,
May 8, 2009
The unemployment rate hit a 25-year high in
April, but there were signs of hope as the monthly job loss total fell
to the lowest level in six months.
The Labor Department reported Friday that employers cut 539,000 jobs
from payrolls in the month. That's an improvement from the revised reading
of 699,000 that were lost in March, and the best reading since October,
when the economy shed 380,000 jobs.
Still, that brings job losses since the start of 2008 to 5.7 million.
And even some economists who believe that economic growth and an end
to the recession are close at hand project that job losses could continue
through the end of the year or into 2010.
Economists had forecast a loss of 600,000 jobs in April, but there had
been signs in recent days that the job losses might not be as bad as
expected. A reading on private sector employment by payroll services
firm ADP showed a big drop in job losses in April, and there has been
a steady decline in recent weeks in people filing for first-time unemployment
benefits.
"
The massive hemorrhaging in the job market over the past four months
has slowed and the worst is behind us," said Sung Won Sohn, economics
professor at Cal State University, Channel Islands. "The improving
trend in initial claims, a good leading indicator of the employment trend,
points to further improvements in the future."
But other experts cautioned against expecting the economy to start adding
jobs again in the near term.
Tig Gilliam, chief executive of Adecco Group North America, a unit of
the world's largest employment staffing firm, said he wouldn't be surprised
to see job losses of 500,000 or more again in the May report.
"
The good news is the rate of job losses is slowing," he said. "But
it's too soon to say the market has turned around. If we can get back
to zero job losses by December, that would be good."
Source: CNN/Money
Spring
Thaw in Prices and Rates,Plus Incentives Draw Home Buyers
Wednesday, May 6, 2009
The frozen housing market appears to be thawing as
more buyers are finding the current historically low interest rates,
stabilizing prices and tax credit refund incentives irresistible.
"Today's market offers an incredible opportunity with the unprecedented combination of a 40-year low in interest rates, prices returning to normal levels in many markets, and limited-time tax incentives," said Joe Robson, chairman of the National Association of Home Builders and a home builder from Tulsa, Okla.
The number of homes under contract increased in March, according to the National Association of Realtors' Pending Home Sales Index, which increased 3.2 percent from February to March.
Optimism about the housing market is on the rise as well, an April 16 Gallup Poll found that 71 percent of Americans said that now is a "good time" to buy a house, an 18 point increase from one year ago and the highest level in four years.
Natasha Smith had been monitoring interest rates and home prices, but decided to take the plunge when the $8,000 first-time home buyer tax credit was enacted in February. The 25-year-old closed on a condominium in the Washington, D.C., suburb of Hyattsville, Md., in April.
"I wasn't in a rush as I continued to watch prices fall, but when I heard about the $8,000 tax credit, I knew it was the perfect time to buy," she said. "Combined with the low home prices and interest rates, the tax credit was the extra push I needed to get out of the family home and into a home of my own."
Source: NAHB
20% of Homeowners 'Underwater'
Wednesday, May 6, 2009
More than 20% of American homeowners owe more
on their mortgage debt than they can sell their homes for, according
to an industry report released Wednesday.
The real estate Web site Zillow.com reported that 21.8% of all U.S. homes,
representing more than 20 million residences, were in a "negative
equity" or "underwater" position after prices dropped
more than 14% nationally in the year ended March 31.
"
A combination of falling prices and low down payments has left many borrowers
underwater," said Stan Humphries, Zillow's vice president in charge
of data and analytics. "In some markets, more than half of all homes
are in negative equity."
Those markets include Las Vegas, where a whopping 67.2% of homeowners
would have to bring cash to the table if they sold their homes. Other
markets are Stockton, Calif., where 51.1% of homes are underwater, and
Modesto, Calif., where 50.8% of homes are in that position.
"
That's really important, because homeowners in negative equity have fewer
options if they take financial shocks such as divorce, job loss or medical
bills, making foreclosure more likely," said Humphries.
Zillow.com based its estimate of negative equity using its own home price
estimates. It obtains these by collecting sales records and applying
the price trends it finds to other homes in the community. It then compares
its home price estimates to the initial loan balances to determine if
borrowers have fallen underwater.
The analysis is based on the mortgage balance at the time of purchase
and the price changes that have occurred since. It does not take into
account that some homeowners may have paid down principal along the way.
Humphries believes it's a conservative approach because the trend has
been for people to strip value from their homes in the form of home equity
loans and lines of credit, than to add value by paying down their mortgages.
"
I think our number is either right on or negative equity may be even
a little worse," he said.
Source: CNN/Money
Professional Remodelers Key to Earning Energy-Efficiency Tax Credits
Tuesday, May 5, 2009
Homeowners now can claim up to $1,500 in expanded
energy-efficiency tax credits for remodeling their principal residence
to reduce energy consumption. Available until the end of 2010, the
revamped Existing Home Retrofit Tax Credit (25C) tax credit helps consumers
save two ways: on their costs and on their ultilty bills.
"Remodelers can help find the best methods of saving energy in your home with an assessment, like a home energy audit," explained NAHB Remodelers Chairman Greg Miedema, CGR, CGB, CAPS, CGP, a remodeler from Tucson, Ariz. "Tightening the house to reduce air leakage by adding insulation, fixing ducts, and installing a more efficient heating and air conditioning system can help save on energy bills today while also reducing next year's tax bill."
The expanded federal tax credit refunds 30 percent of the product replacement cost up to a total of $1,500. It can be used not only for HVAC systems, insulation and water heaters but also for windows and doors and insulation as long as the new products meet IRS qualifications. In some cases, installation costs may also be used to claim the tax credit.
Home energy audits can cost as little as $500, which remodelers say is an expense that pays for itself--and more--with savings from efficiency upgrades. And homeowners may be able to combine federal tax credits with local and regional incentives to maximize savings.
Here's one example: Insulation improvements may be one of the easiest and most affordable ways to save on energy costs. Upgrading inefficient insulation (from R-19 to R-38) in the attic of a two-story, 2,000-square-foot Chicago home might cost around $1,000, but the tax credit brings that down to $700. Add that to Chicago's MidAmerican Energy residential energy efficiency rebate program, which can return up to $600 spent on insulation or other energy-efficiency upgrades, and the cost drops to $100 - meaning a two-year payback period for the $51 estimated annual utility savings for this project.
Inspecting the ductwork, caulking and heating and cooling systems for possible upgrades or enhancements also help to provide additional energy savings, Miedema said.
Homeowners also can use the tax credit for heating and cooling components. For example, upgrading a standard 10-year old air conditioner to today's federal minimum 13-SEER (Seasonal Energy Efficiency Ratio) model may cost about $5,500 in Phoenix, but does not qualify for the tax credit. Spending as little as $2,000 more for a higher-efficiency air-conditioner (such as 16-SEER) earns the homeowner the $1,500 energy-efficiency federal tax credit. Plus, the local power company provides a rebate starting at $425. With the tax credit and utility rebate, the cost difference can be paid back in a couple of years, while the homeowner may enjoy utility bills savings for years to come.
With the credit, tankless water heaters are comparable in cost to traditional gas water heaters, but last as long as 20 years and are 30 percent more efficient, according to Eugene Lamana, residential business manager at Rinnai, a manufacturer of tankless water heaters and other gas appliances based in Peachtree City, Ga. Savings depend on local energy prices, but home owners may also save with less frequent replacements. When the credit is included, homeowners can save $100 per year on their water heating expenses, he added.
"These are just some examples of how the energy-efficiency tax
credit helps consumers save money in making home improvements and cutting
down utility bills," said Miedema. "Homeowners should contact
a professional remodeler near them for advice on installing tax credit-qualified
improvements in their home."
Source: NAHB
Bernanke: Economy to Turn Up in '09
Tuesday, May 5, 2009
Federal Reserve Chairman Ben Bernanke
said Tuesday that the U.S. economy is stabilizing and will begin to rebound
later this year, but the recovery will be slow and cautious.
At a hearing of the Joint Economic Committee of Congress, Bernanke said
consumer sentiment, the housing market and spending have begun to show
signs of life.
But he expects the economy will continue to shed jobs and credit will
remain tight for some time. He said the recent frugality trend will continue
due to deflated household wealth, and business spending will be slow
to bounce back as well.
"
We continue to expect economic activity to bottom out, then to turn up
later this year," said Bernanke in prepared testimony. "Even
after a recovery gets under way ... we expect that the recovery will
only gradually gain momentum and that economic slack will diminish slowly."
Bernanke said the recent gross domestic product report, which showed
the economy contracted by 6.1% in the first quarter, was disappointing.
But he said the economic contraction will "moderate considerably
in the near term and recover later this year," as businesses look
to replace their liquidated inventories.
The Fed chief said he was encouraged by the recent rally in bank stocks,
led higher by some positive earnings in the first quarter, but "substantial
concerns about the banking industry remain."
Source: CNN/Money
U.S. Construction
Spending up in March
Monday, May 4, 2009
U.S. construction
spending rose in March for the first time in six months, edging up
0.3 percent, according to government
data on Monday.
The gain contrasted with analysts' forecasts of a 1.5 percent drop in
spending, but there were signs of weakness in the Commerce Department's
report, which showed spending reached $970 billion at an annual rate
in March.
February spending was revised downward to a 1.0 percent drop from the
0.9 percent decrease originally reported. March's spending rate was 11.1
percent below that in March 2008.
Private construction slipped 0.1 percent, mostly from a 4.2 percent decrease
in residential building, which makes up more than one-third of the category.
The spending rate of $258 billion was the lowest in nearly 12 years.
However, public construction, which had tapered off in winter, increased
1.1 percent in March and 1.3 percent in February. Most of the boost came
from state and local governments where spending rose 1.3 percent in March.
The economic recovery bill passed in February included billions of dollars
for capital projects, and this could be the first indication some of
the funding has reached the U.S. economy.
The $309 billion rate of public construction spending was 2.6 percent
higher than in March 2008.
Source: Reuters
Pending
Home Sales Jump 3.2%
Monday, May 4, 2009
Is the housing meltdown ending?
Pending home sales rose in March for the second consecutive month and
are up year over year. The Pending Home Sales Index from the National
Association of Realtors showed a 3.2% gain to 84.6 from February, when
it was 82. The index stands 1.6% higher than a year ago.
The consensus forecast of industry experts polled by Briefing.com had
predicted no increase in the index.
It may still take a while before the market gains enough momentum to
firmly state that the downturn has been reversed, according to Lawrence
Yun, NAR's chief economist. And, the upturn may have been boosted by
the first-time homebuyers tax credit, a temporary measure that will
lapse in December.
Source: CNN/Money
How Long Can a Half-Built House Sit?
Friday, May 1, 2009
All over the U.S., blocks, streets and entire subdivisions of homes are
sitting half-finished because their builders ran out of money or went
bankrupt. In 25 (mostly coastal) metro areas surveyed by research firm
Hanley Wood Market Intelligence, 52,295 housing units are completed
and sitting empty, with 6,097 of those located in projects where work
has been halted or canceled.
For engineer and construction expert David Carlysle, business is booming.
He is often called on to evaluate half-built construction: Banks want
to know if projects they've inherited through foreclosure can be salvaged.
Builders need help calculating the cost of completing a job. City inspectors
often won't issue a building permit to restart a stalled job without
an expert assessment of damage.
"
Most of the time what we have seen is the builder ultimately goes bankrupt
and the bank winds up looking for someone to finish it for them," says
Carlysle, president of the National Academy of Building Inspection Engineers
and owner of Criterium-Carlysle Engineers, in Birmingham, Ala. Banks
either hire a builder to complete the job or try to sell an unfinished
project to a builder who will complete the homes and put them on the
market. But as demand for new homes has dried up, so have bank loans
that would enable a new builder to step in and complete the job. And
these abandoned homes can sit empty month after month after month.
Exposure to the elements is a big risk, but not the only worry. Builders
under financial pressure sometimes cut corners before finally walking
away, Carlysle says. He tells of a 3,500-square-foot home — "the
kind of house that would wow a buyer" — that was nearly finished
when the original builder went bankrupt. Tipped off by a sagging wall,
Carlysle found that crucial support beams were missing in several places.
The original builder hid the shoddy work behind finished walls, skipping
a city inspection that would have exposed the negligence.
Access http://realestate.msn.com/article.aspx?cp-documentid=19423888&page=0 to
read complete article.
Source: MSN
Economy Gripped Tight in Recession's Talons
Wednesday April 29, 2009
The economy shrank at a worse-than-expected 6.1 percent
pace at the start of this year as sharp cutbacks by businesses and the
biggest drop in U.S. exports in 40 years overwhelmed a rebound in consumer
spending.
The Commerce Department's report, released Wednesday, dashed hopes that
the recession's grip on the country loosened in the first quarter. Economists
surveyed by Thomson Reuters expected a 5 percent annualized decline.
Instead, the economy ended up performing nearly as bad as it had in the
final three months of last year when it logged the worst slide in a quarter-century,
contracting at a 6.3 percent pace. Nervous consumers played a prominent
role in that dismal showing as they ratcheted back spending in the face
of rising unemployment, falling home values and shrinking nest eggs.
In the January-March quarter consumers came back to life, boosting their
spending after two straight quarters of reductions. The 2.2 percent growth
rate was the strongest in two years.
Still, the consumer rebound was swamped by heavy spending cuts in virtually
every other area.
Businesses cut spending on home building, commercial construction, equipment
and software, and inventories of goods. Sales of U.S. goods to foreign
buyers plunged as they retrenched in the face of economic troubles in
their own countries. Even the government trimmed spending. It was the
first time that happened since the end of 2005.
The sharp cuts underscore the toll the housing, credit and
financial crises — the worst since the 1930s — are
having on the country. The recession, which began in December
2007, has
taken a
big bite out
of national economic activity and snatched 5.1 million jobs.
Source: Associated Press
Wall Street Rises as Inventory Drop Spurs Optimism
Wednesday April 29, 2009
Stocks extended gains on Wednesday on better-than-expected earnings and
government data that suggested companies may start to rebuild inventories,
even as the economy shrank more than expected in the first quarter.
On the earnings front, Time Warner Inc and Qwest Communications International
Inc provided a lift after reporting better-than-expected results.
Government data showed gross domestic product dropped more than expected,
but a decline in inventories was good news as it suggested manufacturers
and retailers had reduced the stock of unsold merchandise, which could
be key in pulling the economy out of recession.
"
What everybody is hanging their hat on is this inventory draw, and the
expectation that inventories are that far down that the next thing that's
going to happen is that you're going to have to build inventories and
we're going to have start manufacturing," said Paul Nolte at Hinsdale
Associates in Hinsdale Illinois.
" The expectation is this is the worst and things get better from here
because we will start to rebuild inventories."
Investors are also awaiting comments from the U.S. Federal Reserve on
the state of the economy and are hopeful for signs the recession is abating.
Analysts said worries about the impact of the spread of swine flu on
the economy were easing, even as a baby in Texas who died of the new
flu strain was the first confirmed death outside Mexico. A Houston health
official said the 23-month-old was Mexican and was in the United States
for medical treatment.
Source: Reuter
GDP Contracts at 6.1% Rate
Wednesday April 29, 2009
A first look at gross domestic product in the first quarter seemed pretty
grim: The GDP contracted at a 6.1% annualized rate, much worse than the
expected contraction of 4.9% and only slightly better than the negative
6.3% rate seen in the fourth quarter.
But "the underlying details hold somewhat more encouraging implications
for the near term outlook than we had expected to be evident in the data," David
Resler, the chief economist at Nomura Securities, wrote in a note to
clients this morning.
In fact, consumer spending rose 2.2% in the quarter, which was the biggest
increase in two years and a huge jump from the negative 4.3% in the fourth
quarter.
"
If consumer spending stabilizes, a stabilization in capital spending
would further improve the near term outlook," Resler wrote.
Stocks were moving higher despite the first confirmed U.S. death related
to the swine flu, helped in part by a rally in financials after the first
upgrade of the sector by Fox-Pitt, Kelton in five years.
Source: MSN Money
Fed Seen Holding Rates, Policy Steady
Wednesday April 29, 2009
With some hints the U.S. economy's deep swoon is easing, Federal Reserve
policy-makers are expected to hold off on new measures to flood the economy
with money when they conclude a two-day meeting on Wednesday.
The Fed's interest-rate setting Federal Open Market Committee resumed
its meeting at around 9 a.m. EDT, a spokesperson for the U.S. central
bank said. The Fed will issue a statement assessing the health of the
world's largest economy and outlining its policy prescriptions at about
2:15 p.m. EDT.
"
With things going according to plan for once, the FOMC has no need to
conjure up some new liquidity tool to show that it is on the job," economists
at Wrightson ICAP in Jersey City, New Jersey wrote in a note to clients.
The U.S. central bank chopped the benchmark overnight federal funds rate
to a zero to 0.25 percent range in December and appears certain to hold
it there again on Wednesday.
It also is likely to restate its commitment to keeping rates exceptionally
low for an extended period, and to use all available tools in its campaign
to combat the painful recession and paralyzing credit crunch.
Source: Reuters
New Housing Trends Study: Most Baby Boomers Prefer to Age in Place, But Growing Numbers Head to Age-Restricted Communities, Say NAHB and Metlife Mature Market Institute
Tuesday, April 28, 2009
Most Baby Boomers, like their parents, are choosing
to "age in place," but a large and growing number - more
than 1.2 million households - are choosing to move to communities designed
to meet their needs, according to a study released today by the National
Association of Home Builders (NAHB) and the MetLife Mature Market Institute
(MMI). The data is significant because by 2010 the Boomers will represent
one quarter of the U.S. population - a group that will greatly impact
the choices available in the housing market.
"The Baby Boomers' influence on housing choices has been profound, and will have a huge impact on trends in housing for the mature market as that age group continues to move toward retirement," said Sandra Timmerman, director of the MetLife Mature Market Institute. "Some findings, such as the tendency for buyers in 55+ communities to continue to work in greater numbers and for longer periods of time, show us that this group is redefining the traditional notion of retirement to suit their lifestyle choices."
The multi-phased study, "Housing for the 55+ Market: Trends and Insights on Boomers and Beyond," examines a number of trends and behaviors of the important boomer segment and the population in general. The research, released during NAHB's Building for Boomers & Beyond: 50+ Housing Symposium in Philadelphia, includes an in-depth profile of the 55+ market, based on figures from the U.S. Census Bureau's American Housing Survey from 2001 through 2007. The study showed that the new homes offered to 55+ buyers and renters grew in size from an average of about 1,800 square feet to about 2,300 during that time period - likely still a downsize for many, since almost no one reported that a desire for a larger home was among their reasons to move. Those who moved from their existing homes did so primarily for reasons relating to their families, but the design and look of the community, and the quality of the home, as well as the design and layout of the new residence, were the factors most often considered by those who chose to move.
"NAHB has tracked the 55+ population and its share of the housing market for decades," said David Crowe, NAHB's chief economist. "But this new data gives us our first look at specific consumer behaviors and preferences - what they look for in a home, the reasons why they move, the characteristics of the communities they choose - over an extended period of time. By examining emerging trends, we have a clearer picture of what the mature market wants in homes and communities, which gives builders the tools to build housing that will meet those needs."
Source: NAHB
Recovery in Sight
Friday, April 24, 2009
A group of the nation’s leading economists gave a mostly upbeat forecast for the housing market at an NAHB conference in Washington, D.C.
A gust of
positive news arose from the National Association of Home Builders'
(NAHB's)
spring conference in Washington, D.C., compliments
of Mark Zandi of Moody’s Economy.com. The April 23 presentation,
one of several forecasts from leading economists from Freddie Mac, Fannie
Mae, Harvard University’s Joint Center and Karl Case of the Case-Shiller
Index, made a strong case for a bottoming of the housing market in the
current quarter -- Q2 of 2009 -- followed by declines in unemployment
and rises in home prices.
“
[Housing starts] are bottoming around now. By the end of this year, things
should begin turning around,” said Zandi, the chief economist and
forecaster for Moody’s Economy.com. The former advisor to both
John McCain and Barack Obama based his predictions on a number of factors,
among them the current oversupply of housing inventory; improved housing
affordability; and the current administration’s mortgage rescue
and financial stimulus plans.
Bernard Markstein, director of forecasting for the NAHB, agreed that “[housing
starts] are bottoming now and, by the end of the year, things should
begin turning around.” Some areas of the country, such as the upper
Midwest and the Great Lakes region, are “still feeling the pain” and
may continue to do so for some time to come, Markstein warned.
The housing market should return to normal in 2011 or 2012 -- normal
being defined as the average number of housing starts in the 2000 to
2003 time frame, according to Markstein, when the starts rate hovered
around the 1.6 million mark.
Eric Belsky, executive director of the Harvard Joint Center for Housing
Studies, struck a more sober note when he warned that unemployment will
take a long time to recede. Until then, it will exert downward pressure
on housing demand. The reduced access to mortgages -- wealth and down
payments are two current “constraints," he said -- will also
affect sales.
“
While interest rates are lower, there’s sharply less credit available,” Belsky
said. “A lot of people are not going to have the availability to
buy homes.”
Source: NAHB
National
Green Building Standard Picks up Momentum
Thursday, April 23, 2009
As demand
for authentic, verifiable green home construction practices continues
its ascent, the National Green Building
Standard [tm] is back on the presses for a second printing.
The standard is the first green rating system for new homes, remodeling projects and residential communities to be approved by the American National Standards Institute (ANSI). The first printing was released by BuilderBooks, the publishing arm for the National Association of Home Builders (NAHB), in March - and has already sold out.
More than 1,000 home building and remodeling projects are in the process of being "scored" for points accumulated toward energy, water and resource efficiency; lot and site development; indoor environmental quality and home operation and maintenance - the hallmarks of green building. An online scoring tool is available at www.nahbgreen.org, where builders and remodelers can also find NAHB Research Center-accredited verifiers to inspect their green projects.
The standard's four construction thresholds -- Bronze, Silver, Gold and Emerald -- provide builders with a means to green at any level from above-code efficiencies that save water up to the highest level of sustainable green building including energy savings of 60 percent - the minimum required for Emerald - and even higher. Subdivisions and developments can be rated from one to four stars, depending on the environmental challenges of the site.
The first single-family home - in Tucson, Ariz. -- was certified under the standard in January. The first development - in Burns Harbor, Ind. -- was certified in March.
The standard is also applicable to apartments and condominiums, hotels and motels and other residential spaces. Its flexibility encourages home builders and home buyers to make green choices based on climate and geography as well as style preferences and budget. It can be used for individual projects or be the basis for a voluntary green building program: 90 state and local home building associations include the standard as a rating system choice as affiliates of the NAHB National Green Building Program.
Source: NAHBFirst-Time Home Buyers Who Want New Construction, Tax Credit Must Act Now
Wednesday, April 22, 2009
The National Association of Home Builders (NAHB) is urging first-time home buyers who want to build a new home and also take advantage of the $8,000 first-time home buyer tax credit to act immediately.
"We have received many inquiries from potential home buyers asking if a sales contract on a new home by the November 30 deadline will be sufficient to receive the first-time home buyer tax credit," said Joe Robson, chairman of the NAHB and a home builder from Tulsa, Okla. "They have been surprised to find out that they must move into the new home before they are qualified."
Home buyers may qualify for the tax credit if they purchase the home on or after Jan. 1 but before Dec. 1, 2009. In the case of new construction, the date the home buyer takes occupancy of the house is considered the purchase date, not when the sales contract is signed.
Mike Dishberger of Sandcastle Homes, Inc., in Houston, Texas, said that building a home from scratch can take anywhere from four to six months depending on the floor plan and location.
"Builders are ready and willing to work with potential home buyers to get them into the new home of their dreams, but time is running out to make those dreams a reality while also benefiting from the $8,000 tax credit."
"Buyers also need to keep in mind that it takes time on the front end to select a community, a builder, a floor plan and the options they want in the home before the first shovel hits the dirt," said Kevin Enyeart of Gale Home Builders in Kansas City, Mo. "Often it can take up to a month to complete this process in order to ensure the customer is satisfied with the home they will be living in many years down the road."
It is important that home buyers understand the time requirements and get the process started with a home builder today if they want their new home completed in time to claim the tax credit.
In addition to the November 30 deadline, home buyers must also have not owned a home in the three years prior to the purchase and have a modified adjusted gross income (MAGI) less than $95,000 for single tax payers or $170,000 for married filers in order to qualify for the tax credit.
Source: NAHB
Single-Family
Housing Starts Unchanged in March
Thursday, April 16, 2009
Characteristic volatility in the multifamily sector
pushed nationwide housing starts down 10.8 percent in March as production
of single-family homes remained unchanged, according to numbers released
today by the U.S. Commerce Department. Overall starts fell to a seasonally
adjusted annual rate of 510,000 units, due entirely to a 29 percent
reduction on the multifamily side that largely offset a big gain in
apartment and condo building in the previous month.
"While improving interest among potential home buyers has builders more optimistic these days, we don't want to ramp up production until sales of new homes pick up," noted NAHB Chairman Joe Robson. "A cautious attitude about new building is definitely what's called for here, and that's what most builders have wisely adopted for the time being."
"Today's numbers are right on target with NAHB's forecast, which anticipates that housing starts will bottom out in the second quarter, after new-home sales have stabilized," said NAHB Chief Economist David Crowe. "Single-family starts remained virtually unchanged over the past three months, indicating that we are closing in on a bottom. Multifamily starts - which tend to bounce around from month to month - were responsible for the decline in total starts as they readjusted following a substantial gain in February."
Crowe noted that while builders have been seeing more sales office traffic and fielding more calls in recent weeks as consumers respond to historically affordable home buying conditions, many continue to grapple with a severe credit crunch for acquisition, development and construction financing (AD&C). "A substantial recovery in housing of the kind that's required to help get the national economy back on its feet will not happen until the logjam in AD&C lending has been broken," he cautioned.
While total housing starts declined 10.8 percent to a seasonally adjusted annual rate of 510,000 units in March, single-family housing starts remained exactly on par with the previous month, at a 358,000-unit rate. Multifamily starts declined 29 percent in the month to a 152,000-unit rate, erasing a large portion of the gain posted by that sector in the previous month.
Housing starts were down in three out of four regions in March. The only region posting a gain was the Midwest, which was up nearly 16 percent. Meanwhile, the Northeast posted a 25.4 percent decline, the South a 16.8 percent decline and the West a 26.3 percent decline.
Building permits, which can be an indicator of future building activity, also fell in March. Total permit issuance declined 9 percent to a seasonally adjusted annual rate of 513,000 units, with single-family permits down 7.4 percent to 361,000 units and multifamily permits down 12.6 percent to 152,000 units.
Permit issuance declined across every region except the West in March. While that region posted no change from February, the Northeast posted a 24.3 percent decline, the Midwest a 2.3 percent decline and the South a 10.3 percent decline.
Source: NAHB
Home Builder Confidence Posts Biggest Gain in Five Years
Wednesday, April 15, 2009
Builder confidence in the market for newly built, single-family homes rose five points in April to the highest level since October 2008, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. This gain was the largest one-month increase recorded since May of 2003, and brings the HMI out of single-digit territory for the first time in six months - to 14. Every component of the HMI reflected the boost, with the biggest gain recorded for sales expectations in the next six months.
"If you're a potential buyer who's been sitting on the fence waiting for a sign that now is the time to act, this is it," said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. "Some of the most favorable buying conditions in a lifetime are now in place, and they are drawing more consumers back to the market."
"This is a very encouraging sign that we are at or near the bottom of the current housing depression," said NAHB Chief Economist David Crowe. "With the prime home buying season now underway, builders report that more buyers are responding to the pull of much-improved affordability measures, including low home prices, extremely favorable mortgage rates and the introduction of the $8,000 first-time home buyer tax credit."
Crowe cautioned, however, that a key issue that still must be addressed is the ongoing lockdown on builder acquisition, development and construction (AD&C) financing. "Restoring health to our nation's economy will require a substantial housing recovery, and that recovery is contingent on breaking the logjam in AD&C lending that presents an ever-increasing obstacle for home builders," he said.
Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations in the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
Each of the HMI's component indexes recorded substantial gains in April. The largest of these gains was a 10-point surge in the component gauging builder sales expectations for the next six months, which brought that index to 25. The component gauging current sales conditions and the component gauging traffic of prospective buyers each rose five points, to 13 and 14, respectively.
The HMI also rose in every region in April, with an eight-point gain to 16 in the Northeast, a six-point gain to 14 in the Midwest, a five-point gain to 17 in the South and a 4-point gain to 9 in the West.
Source: NAHB
Obama Tempers Optimism with Reality on Economy
Tuesday, April 14, 2009
Aiming
to assert control over the nation's economic debate, President Barack
Obama on Tuesday warned Americans
eager for
good news that "by no means are we out of the woods" and argued
his broad domestic agenda is the path to recovery.
In a speech at Georgetown University, Obama aimed to juggle his recent
glass-half-full takes on the economy with a determination to not be stamped
as naive or overly rosy in the face of stubborn problems that linger.
He wrapped a summary of actions his administration has taken to steady
the limping economy around a fresh overview of his domestic goals.
Key Obama aides said in advance of his talk that it would not bring major
new announcements. The speech came as Obama nears his symbolic 100-day
mark in office, important because that has become a traditional marker
by which to judge new administrations.
"
There is no doubt that times are still tough," Obama said. "But
from where we stand, for the very first time, we are beginning to see
glimmers of hope. And beyond that, way off in the distance, we can see
a vision of an America's future that is far different than our troubled
economic past."
Obama's message was enveloped in contradictory signals about economic
health but buttressed by Federal Reserve Chairman Ben Bernanke's suggestion
that the recession may at last be bottoming out.
It was hard to tell from the economic indicators released by the government
Tuesday; retail sales fell unexpectedly in March, decreasing by 1.1 percent.
At the same time, wholesale prices dropped sharply as the cost of gasoline
and other energy plummeted, fresh evidence that inflation appears to
pose little threat to the economy.
In a speech prepared for students and faculty at Morehouse College in
Atlanta, Bernanke, like Obama, talked of flickering signs of improvement,
citing recent data on home and auto sales, home building and consumer
spending.
But the broader message that a full turnaround might be a long time coming
may not be welcome to a weary U.S. public.
Obama said a complete recovery depends on two things: building a new
foundation for the U.S. economy and making changes in the political landscape.
Source: Associated Press
Mortgage Rate May Fall to 4.2% By End of Year: Economists
Wednesday, April 8, 2009
The 30-year mortgage rate could fall to nearly 4 percent by the end of
the year as both the economy and housing market make a slow recovery,
Bank of America-Merrill Lynch said.
Efforts to ease monetary policy combined with a general weakening of
the economy will combine to send rates lower, the firm said in a research
note to clients.
"
We expect that disinflationary forces combined with overt quantitative
easing from the Federal Reserve will push the 30-year fixed rate mortgage
down from the current 4.85% rate to 4.2% by year-end," the
firm said in a note from Bank of America-Merrill Lynch economists
Gary
Bigg and David A. Rosenberg.
A bottoming in housing still remains elusive, and unemployment rates
in excess of 10 percent could hamper a recovery.
But the firm said the decrease in rates is likely to outweigh somewhat
the rise in jobless claims, meaning that housing sales are likely to
show improvement in the second half of 2009.
The analysts used trends on the Merrill Lynch Proprietary Housing Market
Index to draw their conclusions .
"
The expected fall in the mortgage rate offsets the expected increase
in continuing claims, suggesting that the environment for home sales
will improve over the remainder of the year," the analysts said. "However,
sales are expected to remain sluggish and may not be sufficient
to absorb the inflow of the supply of foreclosures..."
Housing has shown some modest signs of recovery lately, though foreclosures
remain high and prices continue to drop.
Mortgage applications rose 4.7 percent last week because of a jump in
new purchases. Many of the recent surges in home loan applications have
been due to refinancing efforts.
Pulte and Centex to Merge Creating America's Largest Homebuilding Company
Wednesday, April 8, 2009
Pulte Homes, Inc. PHM and Centex Corporation CTX announced today that
their respective boards of directors have unanimously approved a definitive
merger agreement under which Pulte and Centex will combine in a stock-for-stock
transaction valued at $3.1 billion, including $1.8 billion of net debt.
In calendar year 2008, Pulte and Centex delivered more than 39,000 closings
with combined pro forma revenues of $11.6 billion. The combined company
will have the strongest liquidity position among its peer group with
more than $3.4 billion of cash as of March 31, 2009. Pulte and Centex
ended March with approximately $1.7 billion of cash each.
Under the terms of the agreement, Centex shareholders will receive 0.975
shares of Pulte common stock for each share of Centex they own. Based
on the closing price of Pulte stock on April 7, 2009, the transaction
has a value of $10.50 per Centex share, representing a premium of 32.6%
to the 20-day volume weighted average trading price of Centex's shares.
The combined company currently would have an equity market capitalization
of $4.1 billion and an enterprise value of $7.2 billion. Upon closing
of the transaction, Pulte shareholders will own approximately 68% of
the combined company, and Centex shareholders will own approximately
32%.
"
Combining these two industry leaders with proud legacies into one company
puts us in an excellent position to navigate through the current housing
downturn, poised to accelerate our return to profitability," said
Pulte President and Chief Executive Officer Richard J. Dugas, Jr.
" Centex's
significant presence in the entry level and move-up categories is complemented
by Pulte's strength in both the move-up and active adult segments, the
latter through our popular Del Webb brand. Together we will have considerable
presence in more than 59 markets across America. In addition, both organizations
share an unwavering focus on delivering unparalleled customer satisfaction,
maximizing the influence of strong brands and setting new standards of
achievement in operational efficiency.
" The combination will also allow us to capitalize on the opportunities
presented by the addition of Centex's land positions to Pulte's, including
Centex's sizable holdings in both Texas and the Carolinas, two areas
that continue to exhibit strength in the face of today's difficult housing
market."
Centex Chairman and Chief Executive Officer Timothy Eller said, "Today
represents a significant milestone in this industry's history as two
leading companies join forces. We share common cultures and rich traditions
of delivering quality and value, doing the right thing and exceeding
the expectations of our customers. We're proud to begin writing this
next chapter together.
" We are always looking for the best way to deliver more value to all our
stakeholders and drive the company forward. We have had a high regard
for the Pulte management team and their performance during this downturn,
and I strongly believed that our organizations would complement each
other's strengths. My conversations with Richard reinforced that conviction.
" We believe this is the right combination at the right time in the business
cycle. By acting decisively now, we're creating unrivaled firepower to
capitalize on the opportunities in homebuilding that are now becoming
visible on the horizon. We will have a deeper and more expanded presence
that we are confident will allow us to begin realizing the benefits of
our combined scale immediately. Moreover, our shareholders will receive
an immediate premium for their shares as well as participate in the upside
potential of the combined company."
Source: PR Newswire
U.S. Cracks Down on Housing Scams
Monday, April 6, 2009
In the wake of an Obama administration program
to rescue troubled homeowners, several federal agencies are teaming up
to fight mortgage and foreclosure scams, Treasury Secretary Tim Geithner
said Monday.
The administration's $75 billion effort to help as many as 9 million
mortgage holders get new or refinanced loans is drawing a lot of interest
from homeowners, Treasury Department officials explained.
"
Those who would seek to prey on the most vulnerable also seek to intensify
their efforts as well," Treasury Secretary Tim Geithner said. "We
will aggressively pursue those involved in mortgage rescue scams."
Treasury, the Department of Justice, the Federal Trade Commission and
the Department of Housing and Urban Development will lead the effort
from Washington. State attorneys general will also participate.
For example, the Federal Trade Commission reviewed online and print advertising
for mortgage foreclosure companies nationwide and found "71 distinct
companies running suspicious ads," Treasury said.
The FTC has filed five civil cases against companies offering loan modification
or foreclosure services, including one against a company that spent $9
million on TV and radio ads in less than a year.
"
These companies are kicking people when they're down, charging enormous
upfront fees and sabotaging homeowners who could be getting help for
free," said FTC Chairman Jon Leibowitz.
" These companies are
giving people false hope. They are shameless, as well as opportunistic."
The initiative will bring more resources for the FBI and the Justice
Department to investigate and prosecute mortgage fraud, Housing Secretary
Shaun Donovan told a congressional panel last week.
The announcement is timely. Mortgage fraud has reached an all-time high
even as the number of home loans being issued has shrunk, according to
a report issued last month by the Mortgage Asset Research Institute and
the Mortgage Bankers Association.
The FBI is investigating more than 2,100 mortgage fraud cases, up almost
400% from five years ago, Attorney General Eric Holder said
Source: CNN/Money
2 Million Jobs Lost So Far in '09
Friday, April 3, 2009
Job losses continued to mount in March and
unemployment hit a 25-year high, according to the government's latest
reading on the battered labor market Friday.
Employers trimmed 663,000 jobs from their payrolls last month, roughly
in line with forecasts of a loss of 658,000 jobs, according to economists
surveyed by Briefing.com.
For the first three months of the year, 2 million jobs have been lost,
and 5.1 million jobs have been lost since the start of 2008.
To put the three-month loss in context, if no more jobs are lost over
the next nine months, 2009 would still be the fourth worst year for
job losses since the government started tracking the number of workers
in
1939.
March's monthly loss is up slightly from the loss of 651,000 jobs in
February, although it's less than the number of jobs lost in January.
That figure was revised up to a loss of 741,000 jobs -- which now stands
as the biggest monthly drop in 59 years.
Source: CNN/Money
A.C. Houston Acquires Sandlin Lumber
Thursday, April 2, 2009
Las Vegas-based A.C. Houston Lumber Company purchased the assets
of Sandlin Lumber Company. A.C. Houston Lumber will operate out of
both its current and its newly purchased Las Vegas locations.
On the 2008 Home Channel News Top 350 Pro Dealer Scoreboard, A.C. Houston ranked 73rd with $115 million in sales. Sandlin had been operating as a single-location family run dealer since 1981.
“This expansion reaffirms A.C. Houston Lumber’s commitment to the Southern Nevada market in which we have had the pleasure of providing quality service and products since 1948,” said Ron Mason, president. “We look forward to continuing the exceptional service Sandlin Lumber Company has provided the Las Vegas Valley during their 28 years of operation.”
The A.C. Houston Lumber Company has been a major supplier of building materials, lumber, trusses and engineered wood products to the professional builder since 1884. A.C. Houston Lumber currently operates lumber and truss manufacturing facilities in Nevada, California and Idaho.
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