Jerry Howard in the house..

One of many highlights from an invigorating week on the road was the opportunity to listen to Jerry Howard, CEO of the National Association of Home Builders (NAHB). What a speaker. LMC Expo 11-12-14And with more than 25 years of lobbying and association experience in Washington DC, to suggest that Howard is ‘in the loop’ is to state the obvious. It’s evident the overriding concerns surrounding polarized political views continue to plague Congress. Some takeaways from Jerry Howard’s speech at the LMC Forest Products & Building Materials EXPO in Philadelphia November 11th:

  • Adaptation is what’s kept builders alive (remodeling, light commercial) – “those who survived the recession were the most adaptable”
  • NAHB had 250,000 members prior to recession; 130,000 today
  • Large, publicly-traded home builders only account for 25-30% of housing market activity – rest of the builders account for 70%
  • Those publicly-traded companies were most concentrated in the hottest markets –  the hardest hit markets in the recession
  • Since World War II, housing has led the economy into recession and housing has led the economy out of recession – but the financial sector collapse of 2008 was unprecedented
  • Policies of the Federal Government aimed at promoting home ownership are to blame for the collapse – “banks found creative ways to get people into housing” – underwriting mortgages = “good policy taken too far”
  • Now “unbelievably restrictive to get a mortgage”.. as result there are “no first-time home buyers in the market”
  • Inability of first-time buyers to get a mortgage is what’s impeding the market
  • Production will only come back when mortgage policy is loosened – Need to search for and find compromise in face of inability of representatives of government to solve differences on issues
  • Availability of credit also big challenge for builders
  • There is pent up housing demand historically that needs to be met – “1.4-1.6 million housing starts = organic demand” – owning a home “still part of the American dream”
  • Millennials want urban living but when they have a family they still want a single family house with a backyard in a good school district
  • Biggest thing home builders want from suppliers is consistency: consistency of product availability, quality, and price
  • “Recession took us for a loop” but “business people who survived the recession will have the wherewithal to see us through”
  • Emergence of “co-located” trade shows post-recession; NAHB International Builders Show and Kitchen & Bath Industry Show combine in January
  • Forecast for “1.2 to 1.4 million” U.S. housing starts in 2015 raised a few eyebrows!

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