Showing posts with label credit. Show all posts
Showing posts with label credit. Show all posts
Wednesday, February 8, 2012
Home Builders Applaud Menendez Bill to Restore the Flow of Credit for Home Building
ORLANDO, Feb. 8 - The National Association of Home Builders (NAHB) today commended Sen. Robert Menendez (D-N.J.) for introducing the Home Building Lending Improvement Act of 2012, legislation to help restore the flow of credit for new housing production in order to create jobs, meet rising housing demand and bolster the economic expansion.
"We applaud Rep. Menendez for sponsoring this bill and leading the effort in the Senate to end the severe credit crunch for home building that is needlessly idling residential construction workers and hampering the housing and economic recovery," NAHB Chairman Bob Nielsen, a home builder from Reno, Nev., said while attending the International Builders' Show in Orlando.
With new housing inventories at or near record lows in many parts of the country, builders should be gearing up to produce homes to meet sizable demand from pent-up household formations and the growing list of metro areas on the NAHB/First American Improving Markets Index whose economies are recovering.
Unfortunately, banks have largely cut off home builders from the credit they need to finance new projects or complete those still underway.
Resolving this situation will enable home builders to start rebuilding the economy. Constructing 100 average single-family homes creates more than 300 jobs, $23.1 million in wages and business income and $8.9 million in taxes and revenue for local, state and federal government. And there is a considerable economic ripple effect from there. New home building contributes to the local tax base, which supports schools, police, firefighters and road construction in municipalities across the land, and most of the products used in home construction are manufactured here in the United States.
Similar legislation to resolve the ongoing credit problems for home builders was introduced in the House last year by Reps. Gary Miller (R-Calif.) and Brad Miller (D-N.C.). H.R. 1755, the Home Construction Lending Regulatory Improvement Act, currently has 87 House cosponsors.
"Without access to financing, small home builders cannot keep their doors open, let alone meet the rising demand that is emerging in scores of markets across the nation," said Nielsen. "The Menendez bill will help address the housing production credit crisis and establish an effective foundation to help housing regain its health, contribute to job growth and strengthen the economic expansion."
Wednesday, December 7, 2011
Persistent Tight Lending Conditions for Home Builders Threaten Economic Recovery
WASHINGTON, Dec. 6 -- The commercial banks on which home builders and developers largely rely to finance their projects continued in this year's third quarter to hold tight reins on acquisition, development and construction loans (AD&C), according to the most recent quarterly survey by NAHB's Economics and Housing Policy Group on the availability of credit to the housing industry.
"Restoring the flow of credit to housing is critical for the industry to rebound, provide jobs and boost the economy," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev.
More than half of the single-family builders and developers surveyed by NAHB indicated they had decided to put any new construction or land activity on hold until the financing climate improves.
This has broad repercussions for housing and the economy. With inventories of new homes nearly depleted in many markets, builders should be gearing up to meet demand, create new jobs and keep the expansion moving forward. Unfortunately, production remains stymied because builders in these locations cannot get credit from lending institutions to begin work on new homes.
In normal times, housing accounts for more than 17 percent of the nation's gross domestic product. Constructing 100 new-homes generates more than 300 full-time jobs and $8.9 million in local, state and federal tax revenue that supports local schools and communities across the land.
"There can be no economic recovery without a housing recovery," said Nielsen. "While NAHB's Improving Market Index shows several housing markets around the nation are slowly starting to mend, a full-fledged revival will not take hold until we resolve the ongoing credit problems for home builders."
NAHB has been working to obtain a legislative solution on Capitol Hill.
On May 5, Reps. Gary Miller (R-Calif.) and Brad Miller (D-N.C.) introduced H.R. 1755, the Home Construction Lending Regulatory Improvement Act of 2011, to address specific regulatory impediments to the flow of credit needed by home builders. That measure currently has 80 cosponsors, and NAHB is seeking a companion bill in the Senate.
Of the minority of builders who sought AD&C loans in the third quarter, few saw improvement in the lending climate over the previous quarter and a significant share saw conditions continue to deteriorate.
Forty-eight percent of those polled said they had looked for financing for single-family construction in the third quarter.
Only 8 percent said the availability of financing for single-family projects was getting better (compared to the previous quarter), 61 percent said it was unchanged and 31 percent reported it had worsened.
Survey respondents who indicated that lenders were clamping down further on credit availability in the third quarter noted several ways in which the tightening was occurring:
· 77 percent said lenders were reducing the amount they were willing to lend.
· 75 percent reported seeing the allowable loan-to-value ratio being lowered.
· 66 percent found lenders who were not making any new real estate loans.
· 63 percent said they encountered lenders who were requiring personal guarantees or collateral not related to the project.
Lenders most often told builders they were tightening on loans because the regulators were forcing them to do so.
Sixty-eight percent of those surveyed said they were given this reason for restrictions on new AD&C loans and 52 percent heard it was the reason for tightening on outstanding loans.
"Restoring the flow of credit to housing is critical for the industry to rebound, provide jobs and boost the economy," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev.
More than half of the single-family builders and developers surveyed by NAHB indicated they had decided to put any new construction or land activity on hold until the financing climate improves.
This has broad repercussions for housing and the economy. With inventories of new homes nearly depleted in many markets, builders should be gearing up to meet demand, create new jobs and keep the expansion moving forward. Unfortunately, production remains stymied because builders in these locations cannot get credit from lending institutions to begin work on new homes.
In normal times, housing accounts for more than 17 percent of the nation's gross domestic product. Constructing 100 new-homes generates more than 300 full-time jobs and $8.9 million in local, state and federal tax revenue that supports local schools and communities across the land.
"There can be no economic recovery without a housing recovery," said Nielsen. "While NAHB's Improving Market Index shows several housing markets around the nation are slowly starting to mend, a full-fledged revival will not take hold until we resolve the ongoing credit problems for home builders."
NAHB has been working to obtain a legislative solution on Capitol Hill.
On May 5, Reps. Gary Miller (R-Calif.) and Brad Miller (D-N.C.) introduced H.R. 1755, the Home Construction Lending Regulatory Improvement Act of 2011, to address specific regulatory impediments to the flow of credit needed by home builders. That measure currently has 80 cosponsors, and NAHB is seeking a companion bill in the Senate.
Of the minority of builders who sought AD&C loans in the third quarter, few saw improvement in the lending climate over the previous quarter and a significant share saw conditions continue to deteriorate.
Forty-eight percent of those polled said they had looked for financing for single-family construction in the third quarter.
Only 8 percent said the availability of financing for single-family projects was getting better (compared to the previous quarter), 61 percent said it was unchanged and 31 percent reported it had worsened.
Survey respondents who indicated that lenders were clamping down further on credit availability in the third quarter noted several ways in which the tightening was occurring:
· 77 percent said lenders were reducing the amount they were willing to lend.
· 75 percent reported seeing the allowable loan-to-value ratio being lowered.
· 66 percent found lenders who were not making any new real estate loans.
· 63 percent said they encountered lenders who were requiring personal guarantees or collateral not related to the project.
Lenders most often told builders they were tightening on loans because the regulators were forcing them to do so.
Sixty-eight percent of those surveyed said they were given this reason for restrictions on new AD&C loans and 52 percent heard it was the reason for tightening on outstanding loans.
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