NAHB's Cloudy Crystal Ball

The National Association of Home Builders (NAHB) has recently come out with their year-end forecast, and I'm a bit disappointed because it's mostly more of the same rehashed news we've all been reading for at least a couple of months. A clear crystal ball it is not:

Placing the blame for the housing recession squarely at the feet of the mortgage market meltdown, NAHB CEO Jerry Howard and chief economist David Seiders warned of another bleak year for housing in 2008, during the NAHB's year-end Housing Forecast call on Thursday.

Exacerbating the situation is the slowdown in the overall United States economy, as housing and mortgage problems have spilled over and tightened credit conditions economy-wide.

Over the past couple of years, I've found NAHB's forecasts to be a little behind the eight ball on their housing forecasts, and it seems a bit convenient to lay the blame on the housing recession "squarely at the feet of the mortgage market meltdown," as if no one at Mr. Seiders and Co. had any clue that home prices were far outpacing incomes in many markets and that there was a serious risk of overbuilding when measured against most reasonable demand forecasts. And, because association groups such as NAHB and NAR likely historically felt compelled to appease their members with continuously optimistic forecasts, housing bears such as Chris Thornberg (formerly of UCLA, now of Beacon Economics) and Mark Zandi (Economy.com) have been able to drive their trucks through the resulting breach and make big names for themselves because they're being proven right.

I tried discussing this and other subjects when I met Mr. Seiders at a reception during the last Builder 100 conference in Carlsbad, but found his professorial demeanor tough to penetrate. Perhaps I should have raised my hand?