Perhaps it is the pressure of having member companies whose stock trade on public markets. Perhaps it is a coincidental divide in politics. Whatever the explanation, the split in opinion on the impact of Republican tax reform on the housing market became even more stark this week as The National Association of Home Builders (NAHB) completed its divergence from the National Association of Realtors (NAR) and got on board with tax reform. Over the weekend, the NAHB gave its full blessing and endorsement to tax reform and even touted its reported benefits to home buyers and home owners in a brief press release titled “NAHB Supports Final Tax Bill“:
“‘NAHB fully supports the final conference report on tax reform legislation and commends the work of House-Senate conferees. This comprehensive overhaul of the nation’s tax code will help middle-class families, maintain the nation’s commitment to affordable housing and ensure that small businesses are treated fairly relative to large corporations. Lower tax rates and a fair tax code will spur economic growth and increase competitiveness, and that is good for housing. We urge the House and Senate to move quickly to pass this legislation.’”
This approval and support from the NAHB marks a 180 degree shift from its previous opposition. However, this change explains and is consistent with the distinct change in positioning communicated by Toll Brothers (TOL) in its last earnings report. TOL focused on reassuring analysts that tax reform would not change the purchase decisions of its wealthier customer base.
On the flip side, the National Association of Realtors (NAR) maintained its opposition as recently as December 12th. The NAR produced select findings from its fourth quarter Housing Opportunities and Market Experience (HOME) survey that “…clearly indicate that the proposed changes in the current House and Senate tax reform bills undercut the incentive of owning a home and would have a detrimental effect on many homeowners’ financial situation and future desire to move.” The NAR summarized its findings in the following infographic:
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