State of the Union Views

When President Trump took the stage for his State of the Union Address in February, the nation’s builders waited to see how he would weigh in on the state of housing.

National Association of Home Builders first vice chairperson Greg Ugalde commended the President for highlighting the need for large-scale investment in infrastructure that is vital to building additional housing. Ugalde also pointed out the biggest impediments to doing so—including affordability.

Policymakers can start by taking the following steps: Eliminate unnecessary regulations that raise housing costs; enact housing finance reform that enables creditworthy borrowers to obtain home loans; and promote job training programs in home building to help address the severe labor shortage that is putting upward pressure on home prices,” says Ugalde.

Multi-Family Holds up Housing

Overall housing starts rose to 3.2 percent in November, bringing the seasonally adjusted annual rate (according to the National Association of Home Builders) to 1.26 million units. A closer look at the data shows that the multifamily segment is currently propping up slower starts among single-family residences. Single-family starts fell 4.6 percent to 824,000, dropping for the third straight month, while multifamily starts rose 22.4 percent to 432,000.

First Steps

In December 2018, President Trump signed the First Step Act into law, which could, perhaps, provide some relief to the industry’s hiring woes.The bipartisan bill reforms the criminal justice system and promotes vocational training for prisoners.

Remodeling Holds Strong

The latest Remodeling Market Index, published by the National Association of Homebuilders (NAHB) posted a reading of 57 for the fourth quarter of 2018—one point lower than the previous quarter. The RMI has been consistently above 50 since the second quarter of 2013, NAHB reports, indicating that more remodeling contractors report market activity that is higher rather than lower than prior quarters.

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DWM Magazine

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