1. STATE OF THE HOUSING INDUSTRY PRESENTATION (TEMPLATE)
Presentation should be limited to 10 minutes.
This suggested format is merely an attempt to encourage each country to include core housing market information for each country.
We encourage the creative use of graphics to enhance each report.
IHA Secretariat

2. STATE OF THE HOUSING INDUSTRY PRESENTATION TEMPLATE…. CONT.
COUNTRY: USA NAME OF ORGANIZATION: NAHB National Association of Home Builders 1- ORGANIZATION OVERVIEW: A federation of more than 700 state and local associations, NAHB represents more than 140,000 members who construct 80% of the new homes built in the United States, both single-family and multifamily. About one-third of NAHB members are home builders and remodelers.

3. STATE OF THE HOUSING INDUSTRY PRESENTATION TEMPLATE…. CONT.
2- HOUSING ECONOMIC STATISTICS:
Starts:
Percentages:
Numbers:
- Single Family (SAAR)
783,000 (Sept 2016)
- Multifamily (SAAR)
264,000 (Sept 2016)
Gross Domestic Product (GDP)
$16,570 Billion
GDP Growth
2.9% (Q3 2016)
GDP Per Capita
$51,065
House Price Index
7.6% annual increase
(Aug 2016)
Consumer Price Index
1.5%
(Sept 2016)
Unemployment
5.0%
Home Mortgage Interest Rate
3.6%
Freddie 30YR FRM
Home Ownership Rate
63.5%
(Q3 2016)
Population Growth/Net
0.77%
2,471,000 (Aug ‘15-’16)
Multifamily 395,000 in 2016; GDP 1.1% in Q2; Case Shiller 4.9 in July, more in line with L-T trend, near 2006 peak; HO 63.0 in Q2, 2004 peak 69+%, millennials34%

4. STATE OF THE HOUSING INDUSTRY PRESENTATION TEMPLATE…. CONT.
The IHA defines social housing as housing subsidized by governments that is made available to those who would otherwise be unable to afford to obtain suitable and adequate housing in the private market.
HOW IS SOCIAL HOUSING ADDRESSED IN YOUR COUNTRY?
The following questions are designed to assist you in defining Social Housing in your country: What is the status of social housing? (i.e.; what is the social housing share of total housing units in your country, and how rapidly is the social housing stock growing each year? are new innovations being considered?, etc.)
124,600,000 Households
Public Housing: million families.
Project-based Section 8: 1.2 million families.
(Households at 50% of area median income, no more than 30% of income to rent.)
Housing Choice Voucher Program: 2.2 million low-income families.
(75% of households below 30% of median area income, fair market rents)
The one source of increasing social housing stock is the Low Income Housing Tax Credit.
1934, LHAs,80%/50%/30% median area income, elderly, disabled, SF $60K – CA $30, NYC, stained reputation, all funds to maintenance; 1970s demand side

5. STATE OF THE HOUSING INDUSTRY PRESENTATION TEMPLATE…. CONT.
2. How is social housing being delivered (public/private/combination)? (i.e., what are the current incentives for private developers to produce social housing; what is the role of non-profit government organizations and non-profits in producing and maintaining social housing? are the funding requirements met by the government?, etc.) The Low Income Housing Tax Credit Incentivizes Investors with Federal Tax Credit 2.8 million units since ,470 projects and 107,000 units annually 96,000 jobs annually 133 million housing units 1.5 million housing units were lost from 2011 to 2013
Depreciation, State HFAs, land use, courts-avoid low-income residential density; 470 demolition/disasters, 212 condemned, 202 to nonres, 98 merged. Half had incomes 30% of median area or lower.

6. Real GDP Growth Growth lower than 3% since the recession
Annual Growth
LT avg (‘58-’07) % % %
2016f %
2017f %
2018f %
Post recession

7. US Payroll Employment Total jobs reached the trend
Millions 0%
However, payroll growth solid. Total jobs above pre-recession peak, nearing prior trend line.

8. Target Federal Funds Rate Signs of life?
Low unemployment risks inflation, so fed must increase short-term. First in Dec 2015, almost assuredly in Dec Will it ever reach 4-5% again?

9. Mortgage Rates Expected to rise
Higher fed funds rate will increase mortgage rates, but historically low. Challenge is accumulation of downpayment, not rate. NAHB’s goal, dashed by abuse.

10. Household Formation Average yearly growth of household formations has doubled
Thousands
Avg: 1.4 million
(12% renters)
Avg: 1.0 million
(109% renters)
Avg: 0.5 million
(130% renters )
HH formation recovered to 1million annual additions from half million after recession. Increases for sale/multi demand. 109%: movers from HO to renters.

11. Low Housing Inventory Existing home inventory flat
Demand improving, existing inventory flat. Need more new homes, but production modest. New: 4.8 month supply, 235K. Existing: 4.5 month supply 1.8M.

12. Constraints on Building Growth The Three L’s
Why? Supply constraints.

13. Labor Unfilled construction jobs rising
Number of unfilled construction sector jobs rising as labor shortages persist. 2000s labor infrastructure gone, immigration.
AGC 48% of builders train, 47% assign overtime, 39% use more subs, 21% use labor saving equipment, 13% use off-site prefab, 7% BIM

14. Lots Housing Starts (Area) and Low/Very Low Lot Supply (bars)
Despite starts level half of 2005 peak. 2/3 of builders reporting shortages.

15. Lending - AD&C Access
Better Worse
Was tight, but now in easing territory and easing. Builder loans. Afternoon session.
Source: Senior Loan Officer Opinion Survey (SLOOS), The Federal Reserve Board.

16. Regulatory burdens are rising for home builders. Up 29
Regulatory burdens are rising for home builders Up 29.8% over the last 5 years Building codes Environmental Labor Zoning NAHB research finds that 24% final cost of a home due to direct and indirect regulatory costs 3/5 of that total is associated with land use
And don’t forget rising regulatory burdens. Regulatory costs due to land use are primarily local (zoning, local building codes, impact fees).

17. Home Prices of New and Existing Homes Prices began to diverge in 2008, gap widened more post 2012
Difference
: $21,800
Since 2009: $63,300
Since 2012: $71,900
Supply side constraints plus rising reg costs have shifted the new market to higher prices. Beginning in 2007, new home prices increasingly accelerated above existing home prices. Labor, materials, lot shortages, credit, higher income HH demand.

18. Home Size Market Shift – Over?
And shifted to larger homes – although shift has ended and more entry-level construction.

19. Forecasts

20. Residential Remodeling
Remodeling will expand, but limited by only small gains for existing home sales (due to tight inventory.
National Bureau of Economic Research, NAHB

21. Multifamily Housing Starts Leveling off
331,000
 “Normal”
2013
308,000
2014
355,000
15%
2015
395,000
12%
2016 0%
2017
393,000
-1%
2018
376,000
-4%
2016Q2:
122% of
“Normal”
Trough to Current:
4th Q 09 = 82,000
2nd Q 16 = 404,700
+340%

22. NAHB/Wells Fargo Housing Market Index The song remains the same
Single-Family Starts
HMI
Signature. Moves markets. Changes in builder sentiment occur at a higher octane that starts at turning points. Builders more optimistic than economists at beginning of cycle.

23. Single-Family Starts Growing trend
1,343,000
 “Normal”
2013
620,000
2014
647,000 4%
2015
713,000
10%
2016
769,000 8%
2017
863,000
12%
2018
992,000
15%
2018Q4:
77% of “Normal”
2016Q2:
56% of “Normal”
Trough to Current:
Mar 09 = 353,000
Aug 16 = 722,000
+105%

24. The Long Road Back to Normal
Rank Q4 2017
Bottom 20%
20% to 40%
40% to 60%
60% to 80%
Top 20%
Relative
to Normal
< 65%
65% - 77%
78% - 85%
86% - 102%
102% <
By the end of 2017, the top 20% will be back to 102% or more of normal production levels.
The bottom 20% will be below 65% of normal production.

25. Residential Construction
Room for Growth
and
Economic Impact

26. Home Building – Economic Growth Potential

27. Residential Fixed Investment Housing is a bright spot

28. Rising Population Entering Housing Demand Years
Millions
Headship rates increase from 15% to 45%
Born 1980 or later
Born
Born
Born 1947 or earlier
Source: U.S. Census Bureau, 2015 National Population Estimates.

29. THANK YOU.
IHA Secretariat