Sep 8, 11:30 AM, Government Affairs @ BASCO

Sep13, 3:30 PM, Festival of Homes Committee Meeting, @ BASCO

back to top

back to top

On Sept. 7, NAHB will unveil a new monthly economic indicator—the NAHB Improving Markets Index (IMI)—designed to track housing markets throughout the country that are showing signs of improving economic health. I will formally unveil the index during the Fall Board of Directors meeting. Below is a description from NAHB Economics on the new Index:

The IMI is intended to draw attention to the fact that there are metropolitan areas where recovery is underway. The index measures three readily available monthly data series that are independently collected or calculated and are indicative of improving economic health.

The three indicators are employment growth (from BLS), house price growth (from Freddie Mac) and single family housing growth (from Census). Each metro area (out of roughly 360 defined MSAs) must see improvement in all three indicators at least six months after their respective troughs before being categorized as improving. The exact calculations are the product of:

the current three-month moving average in single family housing permits divided by the three-month moving average that ends with the trough in single family permits divided by the number of months since the trough (i.e., the average monthly change in the three-month moving average)

· the current number of jobs divided by the number of jobs at the trough

· the current price index divided by the index value at the trough

· If there has been no trough, then the value is zero

1. Bismarck, ND
2. Midland, TX
3. Alexandria, LA
4. Casper, WY
5. Pittsburgh, PA
6. Houma, LA
7. Bangor, ME
8. Anchorage, AK
9. New Orleans, LA
10. Waco, TX
11. Fairbanks, AK
12. Fayetteville, NC

Full tables and information related to the NAHB Improving Markets Index will be available at www.nahb.org/IMI beginning September 7. To sign up to receive NAHB’s press releases on this and other topics, please go to www.nahb.org/erelease.

The U.S. is caught up in "refi" madness.

Among the measures President Obama may unveil in his major policy speech this week is a plan to make mortgage refinancing easier, so more households can benefit from ultralow rates. Various proposals for this have been circulating for some time; last June, Morgan Stanley dubbed its version a "Slam-Dunk Stimulus."

But there is a catch. Many mortgage holders aren't able to refinance because they can't afford the fees, no longer qualify for a loan or their mortgage is more than the home is worth. As a result, refi activity has been fairly weak despite the 4.3% average rate for a 30-year, fixed-mortgage.

On Wednesday, the Mortgage Bankers Association will release its weekly mortgage application data; as of last week, its refi index was down 33% from the same period a year ago and even further below peak refi activity in 2003.
This despite the fact that more than three-quarters of borrowers with a mortgage backed by Fannie Mae or Freddie Mac had a rate of 5% or more as of June, according to one recent policy proposal.

Hence the desire for government intervention. The hope is it could benefit as many as 30 million households and free up $20 billion to $70 billion a year by reducing interest payments, according to various proposals.

But that money isn't likely to provide much of a stimulus. For one, there is no guarantee it will be spent; balance-sheet impaired households may pay down debts or boost savings. And, even if people did spend every penny, even $70 billion would still amount to less than 0.5% of the nation's $15 trillion gross domestic product.

True, shoring up household finances has benefits.
"What we're doing is restructuring household balance sheets," says Columbia Business School Professor Chris Mayer, co-author of one policy proposal.

The quicker debt burdens can be lowered, the better for the economy's long-term health.
Such a program isn't without cost, though. Banks and other investors currently holding mortgage bonds would suffer. The taxpayer, through Fannie and Freddie, would also take an up-front hit. And, should any program also include debt forgiveness, there would be significant moral hazard.
While a mass refi program may offer some economic relief, it is certainly no cure-all.

President Barack Obama and Congress are confronting a historic obstacle in their efforts to revive the stalled economy: a crippled housing market unlikely to rebound for several years.
And unless that market snaps back, any new extraordinary stimulus package to create jobs would fail, former Federal Reserve Chairman Alan Greenspan concluded.

“Until we can do that, it’s very hard for me to see how we get the unemployment down to an acceptable level,” Greenspan told a Washington audience last month.

Not every economist agrees with his assessment, yet there’s recognition that the traditional mechanisms of supply and demand have largely broken down. But the scope of the problem is unlikely to be eased by federal and state lawsuits designed to extract billions of dollars in damages from the banks involved in subprime lending.
In a speech last week that analyzed turning foreclosed homes into rental properties and other solutions, Fed governor

Elizabeth Duke acknowledged the “market is not functioning as it should.”
“We, as a nation, currently have a housing market that is so severely out of balance that it is hampering our economic recovery,” she said. “Solutions aimed at righting the wrongs of previous reckless lending in the subprime market are not sufficient to tackle the scale of current problems.”

Lately, some administration officials have anonymously floated a plan to let mortgage holders refinance at lower rates, which would be in addition to an existing program that has helped more than 790,000 delinquent borrowers modify their home loans.
“It’s not the difference between a 4 percent and 6 percent interest that’s causing people to go into foreclosure,” said Stan Humphries, chief economist for real estate services firm Zillow. “Unfortunately, the market is going to have to heal itself on that front.”

Fed policy has pushed mortgage interest rates to an astoundingly low 4.22 percent. But a stream of buyers has yet to materialize — even as nationwide prices have collapsed to 2003 levels, according to the S&P/Case-Shiller Indices.
In short, several economists suggest plunging home prices have fed a vicious cycle: Stuck with less valuable homes, families have pulled back spending. And that, in turn, has stunted hiring, which prevents people from buying homes.
A typical consumer spent almost $100 a day three years ago, according to the pollster Gallup. Now, such spending hovers around $68.

U.S. Chamber of Commerce chief economist Martin Regalia said an increase in consumer spending depends on a housing recovery.
“We’ve lost a ton of net worth, and where we have to make that back is in the assets where we lost it,” he said. “There’s no other asset that’s going to step up and take over for the house, the home, in the average American portfolio.”
Unlike previous recoveries going back several decades, the financial crisis triggered in 2008 by the implosion of the housing bubble indicates the government cannot solely engineer a recovery through real estate, said David Crowe, chief economist at the National Association of Home Builders.

“Government can do some good,” he suggested, “but time and an improving economy will be the primary solution.”
While foreclosures have produced a glut of housing, Crowe explained that demand is also a major part of the problem. The downturn has prevented the formation of about 2 million new households over the past four years, he said.
People “stayed with roommates or their parents because they didn’t have the money to live independently,” Crowe said. “If that began to release, you would absorb the excess inventory and the pace of foreclosures wouldn’t be the focus that it is.”
Humphries expects the housing market to hit its trough sometime from 2014 to 2016, though he cautioned his estimate is based on “middling” job projections that now seem hopeful with unemployment stalled above 9 percent.
The housing recovery would not resemble a V-shape, where prices shoot back up, Humphries said. Instead, it would look like an L-shape with prices fluttering around the bottom for some time.

“It’s not getting back to the go-go years where you’re seeing appreciation of 5 [percent] to 10 percent a year,” he predicted.
The interconnection of housing, consumer spending and employment complicates attempts to revive the economy on an electoral timeline.

Regalia said the best government policy would involve allowing a painful but cathartic chain of foreclosures to proceed so the market can bottom out.

There are 10.9 million borrowers with homes worth less than their mortgages, according to Treasury Department records.
The current pace of foreclosure filings — about 212,000 in July — has only delayed an inevitable and painful reckoning, Regalia said.

“Negative equity situations are almost impossible to address without somebody taking a loss,” he explained. “The government has to take a loss to make good on these things, in which case we add to the deficit significantly. Or the individuals that hold those loans, namely the banking system, will take the loss.”

“Nobody is anxious to take a loss,” he added, “so everybody kind of drags their feet.”

back to top

MEMBER ADVANTAGE

back to top

As a member of the National Association of Home Builders you will receive an additional 20% off the “Best Available Rate” at participating locations every time you travel wiht the Wyndham Hotel Group.

Give agent your special NAHB discount ID number 20090 at time of booking to receive discount, or use the direct links below.

Frequently Asked Questions

Whether you are looking for an upscale hotel, an all-inclusive resort or something more cost-effective, we have the right hotel for you… and at the right price. So start saving now.

Call our special member benefits hotline 1-877-670-7088 or click on one of the links below to reserve your room today at one of these fine hotels:

• Wyndham Hotels and Resorts®
• Wingate By Wyndham®
• Hawthorn Suites®
• Ramada Worldwide®
• Days Inn® Super 8®
• Baymont Inns and Suites®
• Microtel Inns and Suites®
• Howard Johnson®
• Travelodge® Knights Inn®

“Best Available Rate” is defined as the best, non-qualified, publicly available rate on the Internet for the hotel, date and accommodations requested. Certain restrictions apply. To redeem this offer, call 1-877-670-7088 or visit the links above and give ID 20090 at the time of reservation. Offer not valid if hotel is called directly, caller must use toll free numbers listed above. Advanced reservations are required. Offer is subject to availability at participating locations and some blackout dates may apply. Offer cannot be combined with any other discounts, offers, or special promotions. Discounts vary by location and time of year. Offer is void where prohibited by law and has no cash value.

For more information about this item, please contact Christy Ronaldson at 800-368-5242 x8273 or via email at cronaldson@nahb.org.

Sept. 27-28, 2011
Reed Center, Midwest City Sooner Rd & I-40

Registration is now open for the 3rd Annual Green Building Summit! Back by popular demand is nationally renowned speaker Joe Lstiburek. Joe is well recognized as an expert in building science.

This is your opportunity to come and learn about the science behind the "green" phenomena. There is also opportunity to visit with peers and other experts about best practices - what works, what doesn't.

Keynote Speaker: Joseph Lstiburek
Day 1: Residential Building
Day 2: Commercial Building

COST:
1 day $50,
Both days $75

Register now at okgreenbuildingsummit.com
Applying for Continuing Education for Realtors Architects / Appraisers Professional Engineers Master Builders

back to top

BASCO has a new recruiting incentive for EVERYONE!

Recruit a NEW member and BASCO will give YOU $100!!

Click here for membership application and membership benefits

RECRUIT FOR CASH!!!!