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Big Builders Baffled

Thursday, 14 Feb 2008 | 5:50 PM ET
NAHB
NAHB

I’m not often shocked on this beat, but I am today. I just got a call from a source at one of the big public home builders regarding my blog yesterday about the National Association of Home Builders cutting off PAC money to members of Congress.

The source claims that the big builders had no idea the NAHB was going to make that move (one Hill newspaper, Roll Call, referred to the NAHB’s move as “an astonishing slap”). I surmised, in yesterday’s blog, that the NAHB did it because the big public builders were so mad they didn’t get a tax provision in the stimulus bill that would have allowed them to carry back all their massive losses. Apparently, according to this source, I was dead wrong.

The source says that the big builders are respectful of the process on the Hill and appreciative of the access. In other words, my words, they did not expect a quid pro quo. While disappointed, the source says, they hope to continue working forward constructively with members of Congress, in order to work through the current difficulties. The source says some of the big builders are confused as to why the Association did what it did.

I know that the NAHB is comprised of a large array of smaller private builders, and perhaps I was wrong to think that the big public builders wield all the influence. They clearly don’t. But I do know that the big builders donate a lot of that PAC money, some more than others, some not at all, so I have to wonder how they could be so out of the loop on this.

The Chairman of the Federal Reserve, speaking before Congress today, said, “The virtual shutdown of the subprime mortgage market and a widening of spreads on jumbo mortgage loans have further reduced the demand for housing, while foreclosures are adding to the already-elevated inventory of unsold homes. Further cuts in homebuilding and in related activities are likely.”

I'll let that speak for itself. I did send an email to the NAHB, to the same person who sent me the release about the PAC money, for a response to this, and I'll post it when I get it.

UPDATE RESPONSE:

Hi Diana, we are not making any comments on this issue beyond the press release we issued. Sorry we can’t help you out on this one…

Regards,
Donna Reichle
Staff Vice President, Media and Public Relations
National Association of Home Builders

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  • Diana Olick serves as CNBC's real estate correspondent as well as the editor of the Realty Check section on CNBC.com.

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