Monday Morning Briefing Letter - 07/28/2008  By Sandy Dunn, NAHB President and Jerry Howard, NAHB Executive VP and CEO

House passage of crucial housing stimulus legislation came on July 23, with the Senate expected to push the bill over the goal line and straight to the President's desk in quick succession. H.R. 3221 represents a thoughtful, comprehensive approach to address the housing and economic crisis facing this country, and is the best news for home buyers and home builders in a long time. The centerpiece of the bill is a temporary, $7,500 first-time home buyer tax credit for the purchase of any home. This credit can be used for homes purchased between April 9, 2008 and July 1, 2009, and is expected to spur home sales, eliminate excess inventory and bring qualified buyers back into the market. As first drafted, the tax credit was set to expire on April 1, 2009 – but at NAHB's urging, Congress extended the expiration date through June 2009. This 90-day extension is important so that home buyers will be able to take advantage of the credit during the critical 2009 spring and early summer buying season.  Responding to the plummeting share values of Fannie Mae and Freddie Mac earlier this month, House lawmakers also added to the bill several provisions put forth by the Bush Administration that would help bolster investor confidence in those institutions. The Treasury-led proposal would temporarily expand the government's line of credit to Fannie and Freddie and permit the Treasury to purchase an equity stake in the companies. In addition, the Federal Reserve would be given a supervisory role over the two housing GSEs.   Beyond the all-important tax credit, H.R. 3221 also contains several other provisions to jump-start housing, save jobs and restore confidence. These include:

-FHA modernization measures and a permanent increase in FHA loan limits
-Authority for states to issue an additional $11 billion in mortgage revenue bonds
-GSE regulatory reform and a permanent increase in GSE conforming loan limits
-Enhancement of the Low Income Housing Tax Credit
-Foreclosure relief that could help as many as 400,000 struggling home owners
-Tax relief for home owners who don't itemize their deductions

At presstime, the bill had been kicked back to the Senate, where final approval was expected very soon. The next step will be the President's desk, where the Administration has indicated it will sign the measure into law. Read our most recent press release for additional information, and stay tuned for late-breaking updates from NAHB. Contacts: Greg Brown (x8421) and Scott Meyer (x8144)

New-home sales edged slightly downward in June from an upwardly revised pace in the previous month, according to the Commerce Department's report on July 25. A 0.6% decline brought the seasonally adjusted annual rate of new-home sales to 530,000 units. The weak sales numbers once again demonstrated the critical need for the housing and economic stimulus bill that will hopefully soon be the law of the land. The good news in Commerce's report was that the inventory of new homes for sale continued to move downward, by 5.3% to 426,000 units in June. This represents a 10-month supply at the current sales pace – still too high for comfort, but down from the 10.4-month supply in May. Regionally, sales activity rose in the Northeast and Midwest in June, but fell in the South and West. However, every region registered declines in the number of new homes for sale. See NAHB's press release or Commerce's report online. Contact Paul Lopez (x8409) for help with media inquiries. [return to top]

Underlying demand for homeownership remains healthy despite the ongoing challenges for would-be buyers in the current market, according to a new survey conducted by Harris Interactive for Move, Inc. As reported in last week's NBN Online, the survey found that about 41% of current home owners who were polled said they do plan to purchase a home again, while 80% of all renters surveyed expect to eventually become home owners. In fact, 47% of renters in the poll indicated that they plan to purchase a home within the next five years. In addition, most prospective home buyers (57%) indicated that they are willing to make sacrifices to save and earn extra income for down payments and will compromise on neighborhood features and residential amenities in order to buy a home in the current market. On the flip side, 81% of home buyers in the poll indicated that they remain nervous about the current housing market and cited significant barriers to homeownership. Even so, 44% believe the housing market will improve once a new president takes office next January. Read more on this encouraging study in NBN Online. [return to top]

An unworkable new ergonomics standard has been approved by the American National Standards Institute (ANSI) over strong opposition from industry groups including NAHB. Led by the American Society of Safety Engineers, an ANSI committee on construction safety developed the A.10 standard on "musculoskeletal problems" through a deeply divided "consensus" process that ignored the concerns of builders. The Construction Employers Coalition, which included NAHB and four other major industry representatives, opposed the standard as it was written and brought a series of unsuccessful appeals. In addition to the coalition members, 11 other firms and organizations opposed the standard. One problem is that it will not help reduce workplace injuries because it does not provide adequate workplace safety instructions. Instead, it offers only vague suggestions for employers to examine activities involving "force," "pushing" or "lifting." This lack of specificity also makes it virtually impossible for builders to demonstrate compliance with the standard. OSHA sometimes uses ANSI standards as the basis for a citation, and plaintiffs' lawyers use them as evidence in lawsuits. Going forward, NAHB will be informing our members of the array of alternatives to the standard that are available to help prevent soft-tissue injuries. For more information, see our press release or contact Rob Matuga at x8507. [return to top]

NAHB's Quick Issues Index documenting the latest advances on our top Advocacy issues was updated for the Summer Executive Board Meeting held this week in Quebec, and is now available to you online. This document is meant to give you a quick summation of issues on which there has been recent movement, as well as directions on where to go for more information. It is viewable by members only (note: you must be logged onto the NAHB Web site with your username and password) at www.nahb.org/issuesindex. Contact: Samantha Silver (x8450). [return to top]