The two presidential candidates agree that the middle class needs to be rebuilt, but no one seems to be focusing on the dramatic fall in home ownership. by James Sterngold
FORTUNE — One of the few things Mitt Romney and Barack Obama seem to agree on in this acid election season is that they want to rebuild the middle class. It has long been Washington policy dogma that one of the surest gateways to securing that dream is home ownership. But that may have to change. The bursting of the housing bubble wiped out many working class families that had thrown their savings into home purchases, pushing ownership rates to the lowest level in fifteen years.

Worse, the rate appears likely to continue dropping to levels not seen since the 1960s, in part because both parties, no matter how divided on other policies, advocate cutting government mortgage support to remove the risk of more bailouts, and possibly eliminating the mortgage interest tax deduction. That raises a thorny question: Can the government expand the middle class without more lawns to mow?

For some, the costs from the housing meltdown outweigh the idea that the government should support this ownership bridge into the middle class, at least as much as in the past. Some characterize the old policy as having turned into a trap that stripped working families of what little savings they had and ruined their credit.

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“We destroyed the wealth of millions of households,” says David Stevens, who headed the Federal Housing Administration for the Obama administration and is now the president of the Mortgage Bankers Association, a trade group. “We over-promoted home ownership.” He says he does not believe there should be an ownership rate target but that people should just get used to entry being more restrictive.

That is already happening. After a decades-long rise in the ownership rate, from 62.9% in 1965 to 69% in 2005, according to the US Census Bureau, it dropped to 65.5% in the second quarter of this year.

Laurie Goodman, a senior managing director at Amherst Securities Group, says the figure should really be discounted even further; if you remove the 2.8 million borrowers who have not made a mortgage payment for over a year, meaning they are likely to lose their homes, the ownership rate is actually 63.3%, she says.

A closer look sheds an even harsher light on the decline and the policy implications. Hardest hit have been the types of households many politicians have most wanted to usher into the middle class, families with children and minority households.

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The ownership rate for married couples with children plunged 5.1 percentage points from its peak, according to an annual survey by Harvard’s Joint Center for Housing Studies, compared with a 1.3 percentage point drop for married couples without children.

Minority families are finding this “gateway” pinched and perilous. In the second quarter of this year the home ownership rate for whites was 73.5%; for African Americans it stood at 43.8%, and 46.5% for Hispanics, according to the Census Bureau.

The rates for minorities would have tumbled even further had it not been for extraordinary government support. In 2004, 78% of black home buyers received conventional, private sector loans; the figure in 2010 was 19%, with the rest mostly relying on FHA or other government-guaranteed mortgages, Stevens says.

“I consider that unsustainable,” he says.

Officials of both parties have said they want to wind down and possibly eliminate the government-supported mortgage giants, Fannie Mae and Freddie Mac. Already, borrowers are required to have higher credit scores and records, one reason why extraordinarily low interest rates have not spurred much new buying.

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Reducing the federal subsidies would attract more private capital in theory, but it would also likely set even stricter lending standards, reducing mortgage availability, or at least making it more expensive and putting this traditional means of wealth building out of the reach of more families.

The demographic trends suggest that the ownership decline could be a long downward spiral. About two-thirds of net new household formation from 2007 to 2011 was among minorities, groups that have traditionally had much lower home ownership levels. The “echo boom” generation is also burdened with student loans, according to Goodman, which will postpone or eliminate ownership for many, and on top of that real incomes are flat, which is likely to prevent accumulating the savings required for down payments.

“People haven’t looked at the reality here,” Goodman says. “It will go lower.”

The ripples go beyond individual families and their class aspirations. People who own homes tend to not just have more money to draw on for their retirements, they rely less on federal programs, like Medicare, thus easing the fiscal pressure on the government, says Christopher Mayer, a Columbia Business School professor. “The point is, home ownership helps the taxpayer, not just the retirees.”

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Robert Edelstein, a professor at Berkeley’s Haas School of Business, warns that any hasty reduction of the government’s support could not only remove one of the rungs of the financial ladder for aspiring low income families, it could send a fragile economy back into recession by sending prices down again. He insisted that the country does benefit from prudent policies that help lower income families buy homes. The trick, he says, is to focus on needy households and deny the subsidies to the wealthy.

“You can argue that the wealthy don’t need it, but this is a real way that lower income families can accumulate wealth and move up,” he says. “Don’t get rid of the policy, just focus it.”

Home builders are finding iPads to be business game changers. By Teresa Burney
Like kudzu, computer tablets are quickly spreading over the home building landscape, eliminating fax machines, hard-wired telephone lines, office space, file cabinets, and the ubiquitous milk crates on the front seat of superintendents’ pickup trucks. Unlike kudzu, they are beneficial, cutting costs and build time, increasing efficiency, and even helping to sell homes and options. In this second part of our series, we will look at a number of home builder case studies to explore how the devices are changing businesses.

As Vintage Homes began issuing iPads to its building superintendents, the milk crates began to disappear from the front seats of their pickup trucks.

“They are able to access all the info they need without having to have the milk crates anymore,” says Cindy Christian, information and technology officer and controller for the Cordova, Tenn.–based builder, No. 186 on Builder’s 2011 top 200 home builders list with 97 home closings.
Here’s what Vintage Homes is using iPads for:
*The superintendents have access to all job information—purchase orders, plans, customers’ selections, and various construction check lists via the Builder MT’s Superintendent Portal. The company’s server is accessible directly through the Cloud.

*They pay vendors via the device after walking the job, checking off completed items using Adobe Standard for iPads, then the trades and the superintendents sign them and forward the checklist to accounts payable. “No invoices, no printed checklist, no dead trees,” says Christian.

*The company’s new-home orientation specialist (warranty) person can access Punch List Manager on his iPad to check service order status and homeowner information. He can also access the Superintendent Portal to log claims. The specialists, too, have a checklist on the iPad that they use during the several walkthroughs they have with customers, which get sent into the office and uploaded into the customer’s portal so the homeowner has a copy.

*They use the iPads to take photos of construction issues that need to be discussed with trades and of happy new homeowners moving into their houses, which are posted to Facebook.

*Sales executives are able to access Sales Simplicity software to log in leads by using the company’s website to type in lead information under the “contact us” form, the same form outside Internet leads use to leave information.

*The company’s executives were the first adaptors of the iPad, and the CEO pushed to create a system so he could use his iPad rather than laptops from wherever he was. That took a bit of doing, says Christian, but finally they were able to figure out how to use a “log me in” app that allows the executives to access their laptops via their iPads from anywhere.

The iPads have undeniably saved the company money, says Christian, though it’s difficult to quantify how much. The savings range from the concrete costs of printer toner and paper to less measurable, but perhaps even more valuable, time savings.

Vintage Homes aims to build all its houses within 40 days after they are released in the field, a schedule so tight that any delay can knock the build seriously off schedule. Because the iPads are logging information into a system that updates immediately, delays can often be eliminated or minimized, Christian says.

One example of how the devices have helped keep the schedule on time is the ability of the iPads to photograph a lumber drop and immediately send the photo to everyone so that it can be determined if the framing package is complete. An incomplete lumber package could mean that a framer has to come back a second time, rather than finishing the job in one session. That can add up to big delays if the framer goes to another job and waits until that one is complete before coming back.

Keeping build time short has translated to increased sales because it makes Vintage competitive with existing-home sales move-in times.

“Once we start we are like a machine,” says Christian. “It’s been a huge benefit for us. We are able to entice [real estate] agents to look at new homes for their clients when they can get in [the homes] in five or six weeks.”

Form And Function Meet In The Busiest Room In The House
PulteGroup Design Expert Says Kitchen is the Driving Force in Defining Decor of Overall Home

BLOOMFIELD HILLS, Mich., Aug. 29, 2012 /PRNewswire/ — As families congregate to cook, do homework and watch TV, the kitchen has become the busiest room in the house. Yet the hottest kitchen trends are everything but busy – cleaner lines, sleek two-tone appliances and innovative storage solutions.

“The kitchen is the center of activity for families,” said Janice Jones, vice president of merchandizing for national homebuilder PulteGroup. With the popularity of open floor plan designs, Jones said the kitchen – more than ever before – has evolved into the most important part of the family’s communal space. “In the past, home design was driven by practicality, but now homeowners want function and design to meet – and it starts in the kitchen.”

Jones heads a team of 20 design professionals who oversee interior merchandising and specifications for approximately 1,100 Pulte Homes, Centex and Del Webb model homes across the nation. Jones’s team will oversee the interior design and merchandising of more than 1 million square feet of model homes and amenities in 2012 alone, effectively making it one of the largest design shops in the nation.

“Most homebuilding companies don’t have an internal design voice like we do. It’s usually very construction driven,” Jones said. “We talk with homebuyers and learn what they want and where they want it to happen. We talk with our homeowners about what they love and what they would change in their current homes – and we use those ideas when designing new homes.”

Meanwhile, Jones said the kitchen as “an aesthetic impression” has evolved with clean lines, ample storage, easy to clean and uncluttered spaces. “The kitchen is now a driving force in defining the decor of the home overall.”

Seeing Is Believing: Jones said that PulteGroup’s 700-plus new home communities across the country feature fully furnished model homes because the majority of homebuyers prefer to see the design ideas “in action.” Pulte also allows homebuyers to design their dream kitchen with a click of a mouse with its new interactive Kitchen Studio. Images on www.pulte.com allow users to visualize a custom kitchen space by selecting from a variety of colors and finishes – from flooring to wall color.

“Only 20% of homebuyers have the confidence to visualize and colorize the space. Most homebuyers we talk with tell us they want help in designing their home because going through all the options themselves is a lot of work and stress,” Jones said. “This is why showing the latest trends and demonstrating what’s possible is so important.”

Kitchen Trend Highlights

Islands: New kitchen layouts and designs are open and island-centric, using multi-functional spaces that allow everything from homework, to craft and work projects to dinner and entertaining. To keep the clutter off the island, but near the kitchen, Pulte has also introduced new home designs that feature Pulte Planning Centers™ for the family. This multi-functional space is close to the kitchen – the main living area of the home – and gives families the room they need to manage their busy lives and stay organized. The designs are the result of considerable consumer research and feedback.

Color & Appliances: Two-tone colors and contrasting colors on cabinets, counters and appliances are an emerging trend in kitchen design. PulteGroup is rolling out new Black Ice and White Ice appliances offered by national partner Whirlpool. The new appliance designs are the outcome of extensive consumer research showing kitchens are trending toward more timeless, contemporary styling.

“This is the biggest visible news in the appliance world in years,” Jones said, adding that the new look was inspired by popular cutting edge high tech gadgets like Smartphones.

Storage: The trend in homes is smarter use of space where families spend the most time. For smaller spaces, innovative storage solutions are important, such as: larger deeper drawers in lieu of cabinets on the lower surfaces; pop-up cabinets for heavier kitchen appliances like mixers; vertical pull-out drawers for large trays; shallow storage compartments in previously wasted areas under the sink or stovetop.

“Right now it’s all about style and selections meeting convenience and multi-functionality in the kitchen,” Jones said.

Additional Kitchen Trends:
Oil rubbed bronze fixtures
Tile with natural-looking materials and larger formatted designs
Glazed cream colored cabinets
Painted cabinetry in grey tones
Contrasting wood floors
Larger islands that serve as nook spaces
Space in the kitchen that allows for connectivity
Contemporary cabinet hardware
Quartz solid surface manufactured surfaces – “they are becoming favored as much as granite and are expected to continue to gain popularity”

About PulteGroup

PulteGroup, Inc. (NYSE: PHM), based in Bloomfield Hills, Mich., is one of America’s largest homebuilding companies with operations in approximately 60 markets throughout the country. Through its brand portfolio that includes Centex, Pulte Homes and Del Webb, the company is one of the industry’s most versatile homebuilders able to meet the needs of multiple buyer groups and respond to changing consumer demand. PulteGroup conducts extensive research to provide homebuyers with innovative solutions and new homes designed for the way people actually live today. As the most awarded homebuilder in customer satisfaction, PulteGroup brands have consistently ranked among top homebuilders in third-party customer satisfaction studies.

For more information about PulteGroup, Inc. and PulteGroup brands, go to pultegroupinc.com; www.pulte.com; www.centex.com; www.delwebb.com.

by Ainsworth Engineered
When you’re sheathing a structure, it’s important to create crisp cut lines in the OSB walls for your rough openings. A clean, square rough opening guarantees a good solid surface for attaching window and door flanges, as well as trim. But it’s difficult and very time-consuming to accurately pre-cut the rough openings in the sheathing ahead of time.

Most framers just place sheathing right over the rough openings, and then cut the excess sheathing out of the way. That’s the best approach, but here’s a simple tip for obtaining accurate rough openings in your sheathing every time—and all you need is a circular saw and reciprocating saw, four screws, a screw gun, and a chalk line.

1. Sheathe the structure. Leave a 1/8-inch gap along all the edges of the OSB to accommodate natural changes in the panel’s dimensions, as per APA recommendations.

2. Working from the inside of the structure, drive four screws through the four corners of the frame of the rough opening. These screws must protrude entirely through the OSB with room to spare, so use a 2-inch screw just to be safe. These four screws poking through the other side will define a shape that has the same dimensions as the rough opening you want to create. Be careful to make sure the screws are exactly in the corner of the rough opening. To do that, use an extended bit on your drill so the screws are not angled, as that would change the position of the cut lines.

3. Move to the outside of the wall and string a chalk line between the four protruding screws. Snap the chalk line by pulling the string away square to the wall, not at an angle.

4. Use a circ saw to plunge-cut your lines to within 3 or 4 inches of the corners. You don’t want to run your circular saw blade right into the corner, because at that point the saw blade would cut into the framing beneath the sheathing. Once the circular saw cuts are done, finish the cuts with a reciprocating saw loaded with a long wood blade.

Upon completion, you’ll have a rough opening cut in the OSB that’s exactly the same dimension as the frame, without having to guess where to make any of the cuts.

Home builders are finding iPads to be business game changers. By Teresa Burney
Like kudzu, computer tablets are quickly spreading over the home building landscape, eliminating fax machines, hard-wired telephone lines, office space, file cabinets, and the ubiquitous milk crates on the front seat of superintendents’ pickup trucks. Unlike kudzu, they are beneficial, cutting costs and build time, increasing efficiency, and even helping to sell homes and options. In this series, we will look at a number of home builder case studies to explore how the devices are changing businesses.

A year and a half ago Matt Graves, Midwest production manager for Drees Homes said he didn’t even know what an iPad was. “Now it seems like they are taking over the world.”

And it’s been a welcome invasion for Drees, Graves said. The devices are saving the company money and time. Because of the home building recession, Drees’ job superintendents, who it calls builders, have had to supervise construction at multiple sites. While they had laptops and Blackberries, decisions, problem resolution, and schedule updates often had to wait until they could get back to the office where they had Internet access, so they could see documents in a large enough format to figure out solutions and update schedules and fax machines so they could transmit documents.

“They had a lot of drive time, and they had Blackberries to keep up with email, but they couldn’t see the documents very well,” said Graves. “It was hampering us because we had to go back to the construction trailers.”

Then the company’s IT department suggested that, rather than replace the company’s aging fleet of laptops with new laptops at $2,000 each, it should buy $630 iPads for the superintendents. Management was reluctant to jump in with both feet.

“But we decided to put one out there with one builder,” Graves said. “After two weeks he said he didn’t want to send it back.” In January the company decided to have them issued to all superintendents by March. It now has about 100 out in the field in all its markets.

As a result, the company has been able to eliminate the cost of Internet connections to its construction trailers, the telephone line, and the fax machines. “We were paying $50 to $75 a month for Internet connections in the construction trailer and the phone line. We are definitely seeing some up-front savings,” Graves said.

Drees is using the tablets for a variety of tasks that keeps growing. It uses them to update schedules, and for meetings with customers on warranty issues. Builders are able to type up the work order and then email it to the contractor with a copy to the customer before they walk out the door.

They use the devices to take photographs of construction problems that they can quickly send to the contractors to show them what needs to be fixed. Customers’ selections are online and accessible so a superintendent can see the list of options ordered and call up the customers’ plans in a large enough format to see the details.

Superintendents also use weather applications to see the forecast and radar images so they can make scheduling decisions.At first there was some worry that the superintendents wouldn’t adapt to the new technology, especially older ones who the company thought would be more resistant to change. So Drees brought them all in for training sessions that taught them the basics of the device, including how to turn it on and how to navigate through various programs.

“In less than an hour they were navigating through all the things they needed,” said Graves. “The hardest thing we had to do was to get them to have a gentle touch on the screen.”

Since, the superintendents have been finding applications on their own to help their productivity, including note-taking software that allows them to email their notes.

There’s also been a more subtle value to the iPads as well, said Graves. “At a time when home building has been very, very tough over the last years, the fact that the company has taken the time, energy, and money to put into innovation puts the pep back into your step. That brings morale up some.”

Each year, the editors explore the building products market in search of the most innovative new materials, finishes, and systems geared toward the residential construction market. Products are selected across 16 product categories, including Doors, Decking/Outdoor Living, Home Technology, HVAC, Kitchen & Bath, Siding, Structural, and Windows.

In evaluating the hundreds of new products that debut each year, the editors take into consideration the following criteria:

Does it create a new product category?
Does it advance an existing product category?
Does it greatly reduce costs on labor or material?
Does it enhance design/style?
Does it improve energy efficiency/performance?
Does it make life easier for homeowners/builders/contractors?
Does it reduce the product’s or home’s impact on the environment?
To see their list of products, go to the following link:
http://www.housingzone.com/products/101-best-new-products-2012-editors-professional-builder-and-professional-remodeler