This week, I had the pleasure of attending NAHB’s Spring Leadership Meeting in Washington, D.C. While there, I participated in meetings on Capitol Hill alongside 600 of our fellow NAHB members. Our general message to Congress can quickly be summarized by the title of a document that we delivered to lawmakers – “Growing Housing Affordability Crisis Threatens to Derail the Economy.”
In the 200 individual meetings we had with representatives and senators, we emphasized the importance of housing to the economy, as housing construction accounts for more than 15% of GDP, and we highlighted some of the key issues that threaten housing, including:
- The highest inflation rates we have experienced in decades,
- Interest rates that have doubled since January,
- Persistent labor shortages,
- Volatile building material prices,
- Supply chain disruptions, and
- Burdensome federal, state, and local regulations.
After thanking our lawmakers for their time and service, we asked them to help in the following ways:
- Suspend tariffs on Canadian lumber imports,
- Enter into a new softwood lumber agreement with Canada,
- Ban lumber imports from Russia (by passing the No Timber from Tyrants Act),
- Support responsible harvesting of timber from federal lands to create jobs and produce more sustainable products,
- Fund job training programs that support careers in housing, and
- Pursue immigration policies that help fill labor gaps while protecting the nation’s borders.
In addition to conducting meetings with our lawmakers, we received a market briefing from Chief Economist Dr. Robert Dietz. In short, he shared that NAHB is now forecasting a recession of some degree in our near future.
He stated that in addition to the 75 basis point increase on June 15, 2022, we can expect the Federal Reserve to increase the federal funds target rate significantly more throughout the year as they work to combat inflation. These increases could push 30-year fixed mortgage rates above 6.25%. Price appreciation will fall to more normal single digit numbers. And inventory levels versus demand remain a positive point in our favor.
Dr. Dietz concluded his briefing with a forecast for single-family starts of 0% growth for 2022, a 6% decline for 2023 and 0% growth for 2024 (nationally).
We also received an update on workforce development initiatives. The construction industry has nearly 450,000 job openings at the moment. And, while this number might fall with softening market conditions, our workforce issues will be constant and persistent into the future.
HBI and its workforce partners are hard at work for our industry; they will be opening 13 HBI academies across the nation between 2021 and 2024. The Houston area is fortunate to be the fifth recipient of one of these academies. Houston’s academy is expected to open this summer. This multi-million-dollar investment will train several hundred students initially, with the capacity to scale up over time. Personally, I am very excited that GHBA’s September board meeting will be held at this new facility so that we can learn about this great new Houston asset.
In addition to the academy, I learned about an existing HBI program for military veterans. HBI and The Home Depot Foundation launched a program in 2012 to develop specialized training programs (electrical, carpentry) located near ten of the largest military installations in the nation, including two in Texas.
After completing the HBI Transitioning Military Program, students are fully trained and certified to work in a construction trade. The program not only trains service members, veterans, their dependents, and spouses, but it places participants in quality jobs and provides the framework for a successful career including a full year of follow-up after placement.
The chairman concluded the week’s events with a call to action for all members:
- Help convey our message to lawmakers you meet with,
- Contribute any amount you can to our political action committees so that we can promote pro-housing candidates,
- Recruit new members (as there is strength in numbers),
- Mentor and network with new members, and
- Lend your voice to any of our causes you feel particularly passionate about.