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Residential Department: Q&A: Kevin Morrow, National Association of Home Builders: April 2014


Q&A: Kevin Morrow, National Association of Home Builders

Kevin Morrow, director of energy and green building, National Association of Home Builders

As the purchase market expands, so does the appeal of energy-efficient homes.

Green homes comprise an important facet of the residential housing market, and if recent trends are any indication, these properties will only continue to grow in popularity with homebuyers. For mortgage brokers and lenders, being familiar with green homes and their features can affect the way that a mortgage is underwritten, but beyond that, engaging with the green-building industry can pave the way for more clients, colleagues and business. To learn more about green homes and trends within the market, we spoke with Kevin Morrow, director of energy and green building for the National Association of Home Builders (NAHB).

Have green buildings and homes become more popular now that the purchase market has returned?

The short answer is “yes.” What we’re seeing with respect to what I’ll call the rebounding of the new construction market, is that, yes, it appears to be happening, and I’ve got data to support that, most recently from McGraw Hill Construction. Back in 2005, when McGraw Hill estimated the residential market at $315 billion, [green homes] were roughly 2 percent of that $315 billion market, so about a $6 billion market opportunity. The last look that we had in 2013, when the overall market was estimated to be about $159 billion, that 2 percent of the market that was green had grown to 23 percent, or a $36 billion share of the $159 billion market.

So, as a proportion of the market, even throughout the downturn, the green slice grew steadily, and that steady growth is not showing any signs of slowing down. Suffice it to say that a lot has changed in the last nine years when you look at green as a proportion of residential construction.

Are there certain energy-efficient programs or initiatives that originators should know more about?

There are a lot of initiatives that we and other organizations in this industry are working on that lenders should be aware of so that they can show their support and push them along. That includes “greening” the MLSs [multiple-listing services], so that appraisers can start better identifying the special features of a home that might impact its performance to a positive degree and help them draw tighter and more favorable comparisons when the time comes to do that. There’s a website called that I would encourage lenders to become aware of and understand what the limitations of the MLS systems in the areas where they’re operating may be, and how they can be improved. [That is,] if they’re interested in engaging this marketplace so that they can be sure that the valuations they’re getting are fair.

What kind of feedback have you received from consumers about green homes?

At the [NAHB International Builders’ Show this past February], we released what I consider to be a very exciting survey — the first one that I’m aware of, actually — that asks buyers of green homes: “What are the things that you value about them, if anything?” and “Are you glad you bought them?” It’s essentially a satisfaction survey, and the findings were just extraordinarily interesting. Case in point: 94 percent of buyers who have bought and lived in a green home would recommend one to a friend. Ninety-two percent said that they would buy another one.


On the Web

Interested in learning more about the green-building industry?

In customer-satisfaction metrics, these are hugely positive bits of feedback to get. A lot of previous market studies asked people if they would be interested in [green homes] or tried to forecast where the market is going. This is the first retrospective [survey] that I’m aware of.

What steps can originators take to network with green-building professionals?

Understand or quickly learn the other industries that you’re working with — in the case of lenders, it’s obviously going to be the appraisers, the Realtors and the builders — and know their associations and get involved. Most of the home building associations out there at the local level that make up the NAHB federation have programs for nonbuilders to join as associates, and that is probably the best way to engage at the local level. It is a small industry, so engaging in that network locally is the most important thing that [originators] can do. 


Raymond Fleischmann was editor of Scotsman Guide's Residential Edition. For questions about this article, call (800) 297-6061 or e-mail

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