34 Business View - December 2014
National Association of Home Builders | 9
praisal Institute, the nation’s largest profes-
sional association of real estate appraisers,
updated forms to now help analyze and cal-
culate values of energy efficient home fea-
tures. This move expanded on the Institute’s
2011 Residential Green and Energy Efficient
Addendum utilized as an optional adden-
dum to Fannie Mae Form 1004 which has
been the most widely used valuation model
used in mortgage lending practices. The new
updated addendum reflects input from the
U.S. Green Building Council as well as the
National Association of Home Builders. The
Appraisal Institute is also continuing to add
educational programming to further assist
appraisers in identifying and assessing ap-
propriate valuations for green building, and
Morrow indicates these are positive steps
that help promote clearer understanding and
opportunities in the market.
Morrow says it is essential that home-
owners contract with professionals who gen-
uinely understand what sustainability means
and have been trained to approach it in a sys-
temized manner, saying that green building
isn’t simply about energy efficiency, water
conservation, better insulation, technology
integration or any other singular nuance. As
a system, Morrow says sustainability is rep-
resented in the way all the separate pieces
work together to reduce impact on the en-
vironment, increase performance and create
greater value for a homeowner.
To learn more about the ICC 700
Green Building Standard and how to be-
come certified as a green builder, or details
on the variety of other services and programs
offered by theNational Association of Home
Builders, visit the NAHB website at www.
nahb.org.
National Association of Home Builders | 7
code-compliant home,” says Morrow.
For builders, Morr w says it has pro-
vided new means to promote craftsmanship
and expertise. “Those that do it successfully
are using green building practices to distin-
guish themselves in the market place,” he
says. In this capacity, Morrow says builders
are have done more to foster understand-
ing and acceptance of the practices, thereby
leading change in the industry more so than
consumer demand. And in many cases, the
general public is still just beginning to un-
derstand and appreciate the values in being
green. Of course, in other cases, there are
enterprises involved in the housing industry
that could benefit from a little catching-up
too. In this regard, Morrow uses an example
involving valuations of conventional cars ver-
sus hybrid models. Today, side by side price
comparisons will reflect greater value in the
hybrid model due to its fuel efficiency and
imparting of cost savings over its lifecycle.
The industry has yet to fully realize similar
premium valuations with respect to green
homes. Morrow says the NAHB continues
to provide education and work with groups
such as those within multiple listing services
so they might better understand the value of
high performance homes. That work appears
to be paying off too. Earlier this year, the Ap-
| National Association of Home Builders
anager for Green Building Kevin Morrow
ys there have been more than 24,000 hous-
g projects whi h have achieved cert fica-
n since the standard was introduced, yet
ore than 55,000 projects “are in the pro-
ss” of being certified.
Morrow says based on feedback the
AHB has gleaned frommember surveys, it
ticipated that by 2016, more than a third
new housing construction will potential-
conform to the NAHB’s green standard.
orrow says builders, as well as homeown-
s, are increasingly seeking means to better
derstand the benefits of green building,
ich makes sense because sustainability
has come to mean much more than it did in
years past when it was viewed as simply be-
ing environmentally f iendly.
Tod y, Morr w says sustainability
speaks not only to eco-sensitivity, but also
the way a house performs. “Green, in terms
of the lower environmental impact, isn’t al-
ways the goal... the goal is performance,”
says Morrow. For homeowners, improved
performance has proven to provide greater
durability, greater quality and greater eco-
nomic benefits born from lower utility costs
achieved from the conservation of energy
and water. “There’s real premium associated
with a green home versus a conventional
“The MVI, the vacancy
index, has been holding
steady at a healthy level of
37 to 38 since late 2013,”
~
David Crowe,
NAHB Chief Economist
Regionally, new-home sales fell 30.8 percent in the
Northeast, 8.8 percent in the Midwest and 15.2 percent
in the West. Sales were up 8.1 p rcent in he South, the
country’s largest egion.
The inventory of new homes for sale increased to
205,000 units in July. This is a 6.0-month supply at the
current sales pace.
Build r confiden in the market for ewly b lt, single-
family homes rose two points to 55 on the NAHB/
Wells Fargo Housing Market Index for August. The third
consecutive monthly gain brings the index to its highest level
since January.
“As the employment picture brightens, builders are seeing
a noticeable increase in the number of serious buyers
entering the market,” Kelly said. “However, builders still face
a number of challenges, including tight credit conditions for
borrowers and shortages of finished lots and labor.”
Derived from a monthly survey that NAHB has been
conducting for 30 years, the NAHB/Wells Fargo Housing
Market Index gauges builder perceptions of current single-
family home sales and sales expectations for the next six
months as “good,” “fair” or “poor.” The survey also asks
builders to rate traffic of prospective buyers as “high to very
high,” “average” or “low to very low.” Scores from each
component are then used to calculate a seasonally adjusted
index where any number over 50 indicates that more
builders view conditions as good than poor.
All three HMI components posted gains in August. The
indices gauging current sales conditions and expectations for
futur sales each rose two points to 58 and 65, respectively.
The index gauging traffic of prospective buyers increased
three points to 42.
“Each of the three components of the HMI registered
consecutive gains for the past three months, which is
a positive sign that builder confidence appears to be
firming following an uneven spring,” Crowe said. “Factors
contributing to this rise include sustained j b growth,
hist rically low mortgage rates and affordable home prices,
which are helping to unleash pent-up demand.”
Every region saw a gain in its three-month moving average
HMI score in August. The Midwest posted a seven-point
increase to 55 and the West registered a four-point gain to
56. The Northeast posted a two-point gain to 38 and the
South was up one point to 52.
The NAHB/Wells Fargo Housing Market Index is strictly
the product of NAHB Economics, and is not seen or
influenced by any outside party prior to being released to
the public.
CONSTRUCTION
