Podcast: Advocating for Housing in a Difficult Environment
In the latest episode of NAHB’s podcast, Housing Developments, hosts CEO Jim Tobin and COO Paul Lopez kick off their discussion with the latest data from the NAHB/Wells Fargo Housing Market Index (HMI) that was released Wednesday, which dropped for the first time since November 2023.
“Not surprising, as we continue to see inflation stay stubbornly high and the Fed really signaling they’re not going to have any meaningful rate cuts this year,” Tobin noted. “I absolutely think our members are more pessimistic than they were the last couple of months as this inflationary environment and high rate environment just wears on.”
“The biggest frustrations — and we see that in the commentary — is the fact that there’s demand,” Lopez added. “We’re not in 2008. This is truly a need to build more homes, and people can’t do it either because the AD&C lending is tighter, or people are less qualified or can’t afford to take out that mortgage.”
Tobin and Lopez also delve further into the Biden administration’s mandate for new homes purchased under certain mortgage programs to be built to the 2021 International Energy Conservation Code (IECC), following an earlier podcast episode. This move — which will add $30,000 to the cost of a new home in most states and impact housing availability and affordability — came only seven weeks after President Biden made a call to increase the supply of housing during his State of the Union address.
“If you’re an FHA borrower out there, you’re not going to be able to afford a new home in 44 states because it’s going to cost $30,000 more,” Tobin stated. “So what does that do? It pushes all of those buyers into older, less efficient, less resilient housing. And that’s not a great message for a president that’s leaned in on climate change.”
“It doesn’t make any sense,” he added. “And at a time when you’re calling for more production and housing affordability, to slap a $30,000 price tag on new homes is absurd.”
To help solve the housing affordability crisis, NAHB has put forth a 10-point blueprint. Tobin, Lopez, NAHB Chairman Carl Harris and NAHB Chief Economist Dr. Robert Dietz recently discussed the plan with an editorial board at The Washington Post to help educate the media on the issues surrounding housing affordability, especially as constituents become more pessimistic on housing affordability and are continuing to raise this issue with policymakers.
NAHB will take these and other issues to Capitol Hill on June 12 during the 2024 Legislative Conference, taking place during the Spring Leadership Meeting in Washington, D.C.
Listen the full episode below and subscribe to Housing Development through your favorite podcast provider or watch all the episodes on YouTube.
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Latest Economic News
The U.S. labor market rebounded in October, with nonfarm payroll employment increasing by 165,000 jobs and the unemployment rate declining to 4.1%. However, the improvement in overall employment contrasts with continued weakness in residential construction, where employment fell by 16,400 jobs, the largest monthly decline since March 2021.
New multifamily housing confidence weakened year-over-year in the third quarter, according to the Multifamily Market Survey (MMS) by the National Association of Home Builders (NAHB). The MMS produces two separate indices. The Multifamily Production Index (MPI) had a reading of 41, down five points year-over-year, while the Multifamily Occupancy Index (MOI) had a reading of 69, also down five points year-over-year.
Mortgage application activity declined in October as the 30-year fixed mortgage rate rose sharply again. The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, fell 14.1% month-over-month in October on a seasonally adjusted basis. Compared to a year ago, total mortgage applications were 39.8% lower.