NAHB: Problem is Foreclosures, Not Overbuilding

We’ve been tossing around the idea of starting up a BS-Tracker here at HousingWire, and Jerry Howard, the CEO of the National Association of Home Builders, just might push us into making it happen after his remarks yesterday. The builders’ lobbying group has long been pushing for stimulus directly targeted to its ailing membership, and began its latest push yesterday as Congress reconvened on Capitol Hill, via its “Save Housing First” initiative. But what stood out in the latest push for federal dollars is a blatant attempt by the NAHB to rewrite recent history. Howard argued — presumably with a straight face — that builders aren’t the source of the bloated inventories in the nation’s housing markets. “The excess housing inventory in today’s market is the result of unprecedented foreclosures, not overbuilding,” he said Thursday. “That’s why we support Sheila Bair’s foreclosure relief plan and any common-sense proposal to alleviate the foreclosure problem.” Come again? Supporting Bair’s proposal is one thing. Suggesting in the same breath that the residential property inventory overhang isn’t the result of overbuilding by builders borders on the certifiably insane and represents dangerous logic for any public policy. The NAHB is lobbying for an expanded home buyer tax credit that the group says is needed to reduce excess inventory and encourage fence sitters to enter the market. The builders want to make the current $7,500 home buyer tax credit much bigger, eliminating its current recapture provision and making it available to all purchasers, and have called for a credit amounting to 10 percent of the home’s price, capped at 3.5 percent of local FHA loan limits. This would effectively push the tax credit into a handout of as much as $22,000 on the purchase of a new home. Which seems like a great way to lower home prices without having to actually lower home prices, doesn’t it? The group also wants Congress to enact a stimulus plan that would reduce mortgage interest rates to as low as 2.99 percent on 30-year fixed-rate conventional loans purchased between Jan. 1, 2009 and June 30, 2009; that rate would then rise to 3.99 percent for contracts that close between July 1, 2009 and Dec. 31, 2009, the NAHB said. Paying attention to lobbying efforts at the NAHB and the NAR is critical, because both are among the most powerful lobbying influences in Washington, and both routinely are in the top 10 of annual rankings in lobbyist spending — in other words, even if the proposals are short-sighted and narrowly focused on their own constituency, never underestimate the power of the dollar to bend Congressional ears. Even when the CEO of the NAHB is making statements that deserve to get laughed at. Write to Paul Jackson at [email protected].