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    May 23, 2018

    Sales of newly built, single-family homes edged down 1.5 percent in April to a seasonally adjusted annual rate of 662,000 units after a downwardly revised March report, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

    “Even with this minor dip, new home sales continue to trend upward and reflect builders’ overall confidence in the market,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “Builders are optimistic that more prospective buyers will enter the market in the months ahead.”

    A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the April reading of 662,000 units is the number of homes that would sell if this pace continued for the next 12 months.

    “With job growth, rising incomes and overall economic strengthening, we can expect housing demand to continue to grow, particularly among millennials and other newcomers to the market,” said NAHB Senior Economist Michael Neal. “However, builders need to manage rising construction costs as well as regulatory hurdles to keep their homes competitively priced.”

    Regionally, new home sales rose 11.1 percent in the Northeast and 0.3 percent in the South. Sales remained unchanged in the Midwest and dropped 7.9 percent in the West after a very strong March reading.

    The inventory of new home sales for sale was 300,000 in April, which is a 5.4-month supply at the current sales pace. The median sales price of new houses sold was $312,400.
    May 24, 2018

    Confidence in the multifamily housing market remained positive in the first quarter of 2018, according to the Multifamily Production Index (MPI) and the Multifamily Vacancy Index (MVI) released today by the National Association of Home Builders (NAHB). The MPI remained unchanged from last quarter, coming in at a reading of 53, while the MVI remained essentially unchanged at 42.

    The MPI measures builder and developer sentiment about current conditions in the apartment and condo market on a scale of 0 to 100. The index and all of its components are scaled so that a number above 50 indicates that more respondents report conditions are improving than report conditions are getting worse.

    The MPI is a weighted average of three key elements of the multifamily housing market: construction of low-rent units—apartments that are supported by low-income tax credits or other government subsidy programs; market-rate rental units—apartments that are built to be rented at the price the market will hold; and for-sale units—condominiums. The component measuring low-rent units edged down two points to 54, while the component measuring market rate rental units increased two points to 56 and the component measuring for-sale units remained even at 49.

    The Multifamily Vacancy Index (MVI), which measures the multifamily housing industry's perception of vacancies, remained essentially unchanged with an increase of one point to 42. The MVI is a weighted average of current occupancy indexes for class A, B, and C multifamily units, and can vary from 0 to 100, where any number over 50 indicates more property managers report more vacant apartments. A reading of 42 is seen as a healthy number for the multifamily market.

    “Multifamily builders and developers are reporting solid demand around the country, as shown in the vacancy rate for the first quarter,” said Steve Lawson, president of The Lawson Companies in Virginia Beach, Va., and
    May 24, 2018

    Randy Noel, chairman of the National Association of Home Builders (NAHB) and a custom home builder from LaPlace, La., issued the following statement after President Trump signed the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) into law.

    “NAHB commends President Trump for working with the House and Senate to advance bipartisan banking reform legislation through Congress. S. 2155 will improve credit availability by providing much-needed relief for community banks, which are the most common source of lending for home construction and are key providers of home mortgage loans. In turn, this will support a stronger, more robust recovery of the housing and mortgage markets.”
    Virtually all residential construction must adhere to comprehensive building codes and standards governed by local and state laws. Because of the cost and complexity of developing and maintaining such codes, state and local governments typically adopt nationally recognized model codes, often amending them to reflect local construction practices, climate and geography. Most U.S. communities adopt the International Code Council’s I-Codes for this purpose.

    The I-Codes address all aspects of single- and two-family as well as multifamily construction, including structural elements and the electrical, plumbing, heating, ventilation and air conditioning systems, and energy conservation requirements.

    The requirements established by national code bodies, the modifications made by state and local governments, and the standards set by national organizations that are used in developing the model codes can significantly affect the construction, configuration and cost of new residential buildings as well as remodeling or additions to existing ones.

    The original purpose of codes was to protect public health and safety, but government agencies have increasingly turned to codes to implement other policies, such as energy efficiency, resilience, sustainability, and property protection. Worse yet, some agencies advocate for energy code changes benefiting specific product manufacturers and against providing code users options and flexibility.

    BuilderBooks: Codes and Regulations
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    Why It Matters
    Building codes can have a profound impact on the comfort and safety of residents as well as the cost of construction and the cost of operating the home. NAHB can help its members work toward cost-effective and safe codes. Contact your staff liaison to learn more.

    The model codes are typically updated every three years. When changes are proposed, NAHB analyzes their impact on new home construction and existing residential buildings. It also works to ensure that all prop
    American home builders need reasonably priced lumber to build homes that average working families can afford.

    U.S. domestic production is not sufficient to meet demand. NAHB is working with the Forest Service and the Bureau of Land Management to clear the regulatory hurdles that constrain domestic lumber production.

    In 2016, the U.S. consumed 47.1 billion board feet of softwood lumber while producing 32.8 billion board feet. That’s a shortfall of 14.3 billion board feet. More than one-third of the lumber consumed in the U.S. last year was imported, and more than 95% of the imports came from Canada. Annual domestic production has not met demand even once during the last 50 years.

    Why It Matters
    The lumber supply problem is made worse by the Commerce Department decision to impose duties averaging 26.75% on Canadian lumber shipments into the U.S. The tariffs are acting as a tax on American home builders and home buyers, making housing less affordable for American families and forcing builders to look overseas to Germany and Russia in order to meet demand.

    The fact that America cannot meet the nation’s demand for lumber is all the more reason to move forward on an equitable U.S.-Canada trade agreement that will provide a reliable and affordable supply of lumber and meet the housing needs of American consumers.

    Solutions
    America cannot meet the nation’s demand for softwood lumber, which will only continue to grow as the housing recovery picks up steam. Therefore, NAHB believes the following steps should be taken:

    Rescind the lumber duties, which will be finalized on Nov. 18, and negotiate a settlement to address American home builder concerns regarding price and availability of lumber. NAHB is meeting with representatives of the Trump administration and Congress, as well as Canadian federal and provincial officials, to achieve this goal.
    Boost domestic production by seeking higher targets for timber sales from publicly-owned lands a
    The landmark tax reform legislation took effect for the tax year starting Jan. 1, 2018. After significant improvements made during the legislative process, and due to the robust engagement efforts of NAHB and its membership, NAHB supports this final tax legislation.

    The changes made to the tax code will help middle-class families, maintain the nation’s commitment to affordable housing and ensure that small businesses are treated fairly relative to large corporations.
    Access NAHB Highlights: Tax Reform Victories for Housing
    Members-only resource: Tax Reform Tools
    Watch video highlights of NAHB’s influence during the tax reform debate.

    Screenshot for video highlights of NAHB’s influence during the tax reform debate.

    HIGHLIGHTS OF TAX REFORM LEGISLATION
    Supports Middle-Class Families
    The legislation supports the American Dream of homeownership and strengthens opportunities for Main Street home builders to add much-needed housing inventory to the market.

    Retains the mortgage interest deduction and the deduction for second homes, but reduces the mortgage interest cap from $1 million to $750,000.
    Allows taxpayers to deduct up to $10,000 of state and local taxes, including property taxes and the choice of income or sales taxes.
    Maintains existing law that allows home owners to exclude up to $250,000 (or $500,000 for married couples) in capital gains on the profit from the sale of a home if they have lived in the house for two of the last five years.
    Retains seven tax brackets, with rates ranging from 10% to 37%. This will provide tax relief for individuals and small businesses and represents a tax cut for most taxpayers.

    Protects Affordable Housing Options
    The new tax law retains private activity bonds (PABs), which will enable the Low-Income Housing Tax Credit to maintain its effectiveness as the most indispensable tool for the production of affordable housing. Without PABs, we would face the loss of more than 788,000 affordable