Podcast: Is the Economy Stuck?

In the latest episode of NAHB’s podcast, Housing Developments, CEO Jim Tobin and COO Paul Lopez dive into the latest economic data, and what it means for the housing market and midterms.

How Attractive is the Market to Prospective Buyers?

NAHB released the NAHB/Wells Fargo Housing Market Index (HMI) earlier this week, and although builder confidence inched up one point to 35, August marks the 16th consecutive month with the HMI hitting below 40.

Breaking down that metric further, the index measuring current sales conditions increased two points to 39, while the indices for future sales expectations and prospective buyer traffic held steady at 43 and 23, respectively.

“There’s so much noise out there,” he added. “Put yourself in a potential home buyer’s shoes: Why would you do it right now? You’re priced out from the home price. Mortgage rates are high as it is. Maybe you’re going to do some renovation instead. It’s just a weird time.”

“The run of the next five to seven years is still strong,” he added. “We’ve just got out of our way in the short term to unlock that potential.”

Can Washington Help Move the Needle?

Although the recent passage of the 21st Century ROAD to Housing Act is significant, it will take time to implement and require collaboration across all levels of government.

“Hopefully, with the ROAD to Housing as members of Congress go home to run on it as a campaign issue and as our members embrace those members of Congress and talk about it in the press, those local governments, those county governments, they start saying, ‘Hey DC is going to look to us to solve the housing crisis and the affordability and attainability crisis. Let’s get a head of this. Maybe we should do more instead of waiting for Washington to tell us what to do,’” Tobin noted.

“That may be wishful thinking,” he added, “but that’s one way I can see it moving a little bit faster than the pace of regulation.”

All of this, including the uncertainty of the market, will play a role in the midterms, which NAHB will analyze in future episodes.

What’s the key factor to unlocking the market? Listen below for Tobin’s answer.