Editor’s note: This column was pubished in the most recent edition of Oklahoma Builder magazine
By Kirt Dinnes
NAHB State Representative
As your State Representative to NAHB, I was privileged once again to attend the recent NAHB Fall Board of Directors meeting in Dallas.
While our industry is still facing some significant challenges, I am including NAHB Chief Economist David Crowe’s outlook along with a key advocacy victory and news of the long-awaited Health Insurance Program offered to members though the NAHB Affinity Program.
Looking forward, there are signs that conditions in the housing market should show continued improvement:
While the economic recovery has been uneven, it continues to add jobs, a key driver for housing market recovery.
Low interest rates and post-bubble house prices that have settled back to normal in most of the country.
Five years of sub-normal household formation rates have created pent-up demand that will help reduce some of the excess housing inventory.
NAHB/Wells Fargo Housing Market Index
The index, which measures builder confidence in the market for newly built single-family homes, rose one point to 62 in September from an August reading of 61. Any number over 50 indicates that more builders view sales conditions as good than poor.
Crowe’s analysis: “Our latest builder surveys show that single-family housing is making solid progress and we continue to hear from our members that more serious home buyers are returning to the market.
"Though builders are gradually adding inventory to meet demand, they are reporting concerns with lots and labor availability.
"Barring any unexpected jolts, we expect the housing market should continue to move forward at a modest but more persistent pace throughout the rest of the year.”
So, things are looking up on a nationwide perspective. But as my title to this article alludes, things are not quite so rosy here in Oklahoma right now.
I am playing off the title to a recent economic report from Ted C Jones, PhD, the chief economist from Stewart Title.
Dr. Jones shares the decrease in the price of oil is affecting our economy, but not to the extent is has in the past. That’s good news. It means as members of this great association we need to be smart and wise.
Now, with one national economist giving a broad report, another giving a more focused report, I decided to balance it with a laser-focused report from the chief economist for the Oklahoma City Federal Reserve chapter.
Chad Wilkerson recently shared that he expects Oklahoma to see very slow growth for the next 12-18 months.
The diversification we have seen in Oklahoma has helped us absorb some of the slack in the energy sector. But if prices stay depressed longer than 2017, it could begin to affect us even more.
Anecdotally, my personal business is a reflection of what Dr. Jones’ shared. I am blessed to have projects in the pipeline but clients seem to be moving cautiously.
That means for me I need to be not only their builder but also their sounding board on being wise during the building process.
Advocacy: Waters of the United States
NAHB's long and difficult fight to bring common sense to the Environmental Protection Agency's new Clean Water Act definitions achieved an important victory recently. The U.S. Court of Appeals for the 6th circuit ordered a nationwide stay on the agency's new definitions, which had dramatically expanded federal jurisdiction over our nations wetlands. The court agreed that new definitions finalized earlier this fall "dramatically alter the existing balance of federal-state collaboration in restoring and maintaining the integrity of the nations waters," as the states contesting new rules had changed.
So while the federal courts figure this out, the agencies will have to use their previous definitions. For the time being, EPA and the Army Corps of Engineers must prove that a water is jurisdictional before automatically sweeping it into their regulatory nets.
Our members want to protect our nation's waters. But we need clear rules. The October court decision is a huge step in the right direction.
The NAHB Executive Board approved a new Health Insurance Service for members through the Affinity Program.
The large insurance consulting and brokerage firm of Marsh and McLennan will be administering the program with the states that choose to be a part of the plan. Both Individual and group plans will be offered. For States such as ours that currently do not have a statewide health insurance offering, this is a welcome much-needed benefit to our members. Although the annual open enrollment period ends Nov. 1 each year, those who are interested in taking advantage of the new Affinity health insurance program can start making plans now.
My hope is you find this information both beneficial and useful, allowing you to plan wisely. To me, the benefits of this information and the sharing of knowledge among members is a tremendous value of being a part of this great association.
As always, if I can be of any help as your NAHB State Representative please contact me, I would enjoy hearing from you.