A sophisticated new study from NAHB's Economics and Housing Policy Group demonstrates that younger households benefit the most from housing tax incentives. This research counters the often-heard but erroneous claim that the mortgage interest deduction almost exclusively benefits high-income households.

The study, which was authored by NAHB tax economist Robert Dietz, Ph.D., supplements previous NAHB research regarding housing tax incentives, explores the problems with government methods of measuring the size of housing tax expenditures, and re-examines the income distribution of the mortgage interest and real estate tax deductions. A multitude of descriptive statistcs in the report demonstrate that the housing-related tax deductions, the mortgage interest and real estate tax deductions, strongly benefit younger households who tend to be recent home buyers with larger mortgage debt. This is true in terms of aggregate amounts claimed on tax forms, average deduction amounts, and shares of taxpayer income. The paper's conclusions suggest that proposals to change these deductions need to take into account the generational consequences, particularly with respect to first-time home buyers, as well as the impacts on modest-income households. You can access the study for free on NAHB's HousingEconomics.com Web site. Or, read more about it in the May 17 edition of Nation's Building News. Contact: Robert Dietz at rdietz@nahb.org.

As the Senate continued work last week on financial regulatory overhaul bill S. 3217, the Restoring American Financial Stability Act, NAHB helped defeat two amendments that threatened to impair the flow of mortgage credit to the nation's housing finance system. 

McCain Proposal
The first amendment, a proposal offered by Sen. John McCain (R-AZ) to end government control of Fannie Mae and Freddie Mac within two years and then force both of the housing GSEs to reduce their mortgage portfolios, spurred an immediate reaction from NAHB. A letter we sent to Senate Banking Committee Chairman Chris Dodd (D-CT), Ranking Member Richard Shelby (R-AL) and the full Senate warned that provisions in the McCain amendment dealing with portfolio limitations, loan limit repeals and escalating mandatory downpayments would impair the ability of Fannie and Freddie to participate in the secondary mortgage market. Sen. Dodd read excerpts from our letter aloud on the floor of the Senate as debate proceeded, and ultimately our arguments proved successful with the defeat of that amendment. In its stead, the Senate opted to approve a competing amendment that would require the Treasury Department to study how to end the conservatorship of Fannie Mae and Freddie Mac and present its recommendations by January 2011.

Corker Proposal
Next, the Senate moved to consider a motion put forth by Sen. Bob Corker (R-TN) that would mandate a 5% downpayment requirement for all mortgages, including those insured by the FHA. Again, NAHB sent a letter to the full Senate detailing how this plan would harm the housing market and limit the availability of affordable mortgage options. The Corker amendment was subsequently defeated.

NAHB-Supported Amendments
NAHB also successfully supported two other amendments to the legislation that would help creditworthy borrowers to obtain affordable home loans. The first, offered by Sens. Mary Landrieu (D-LA), Kay Hagan (D-NC) and Johnny Isakson (R-GA), addressed a key concern of NAHB about the bill's overall risk retention requirements, and was approved by unanimous consent. The second, offered by Sen. Tim Johnson (D-SD), was developed in response to the concerns of NAHB and a coalition of other organizations that the Senate's legislation would hamper the ability of the Federal Home Loan Banks to provide much-needed liquidity to the financial system. The concerning language would prohibit institutions deemed systematically important from lending to any unaffiliated company that exceeds 25% of the capital stock and surplus of the lending institution. Sen. Johnson' s amendment, which had not been voted upon as of this report's publishing time, would exclude the Federal Home Loan Banks from this onerous provision. For more information, read the May 17 edition of Nation's Building News, or contact MondayMorningQuestions@nahb.org.

The EPA has gone forward with its proposal to eliminate a provision to its Lead: Renovation, Repair and Painting rule that previously allowed owners of older homes to opt-out of the lead-safe work practices mandated by the rule if no children under six or pregnant women resided in their home. An amendment that makes this rule change official was published in the Federal Register on May 6, with an effective date of July 6. This means that after July 6, 2010, renovations in all 78 million pre-1978 homes could be subject to the new work practice standards as stipulated in the rule. This is despite EPA's own estimates that a significantly smaller portion of homes — more like 38 million — still contain lead paint.

The new rules also require a post-renovation notification to be presented to the home owner. This means that the remodeler must give the property owner and/or residents a copy of the post-renovation checklist or similar form. Importantly, the EPA has also extended the expiration date for any certified renovator who completed his or her training before April 22, 2010. The new expiration date is July 1, 2015.

One more thing to keep in mind: the EPA has previously given notice that it is writing another rule to require more complex dust-wipe or clearance testing, effectively requiring remodelers to fill the role of lead-paint abatement workers. If approved, this rule would become effective in July 2011. NAHB will keep you updated through this report and our other communications vehicles going forward. Send questions to MondayMorningQuestions@nahb.org.

Builder confidence in the mature-housing market remained weak in this year's first quarter, according to the latest NAHB 55+ Housing Market Index, released on May 12. NAHB Chief Economist David Crowe noted that, since builders' potential buyers are having difficulty selling their existing property, they are unable to move to their next potential home. In addition, with a large share of active adult home buyers still in the workforce, job security concerns are another factor. The 55+ single-family HMI did rise two points to 19 as a result of a gain in the present sales component, possibly reflecting some increased activity fueled by home buyer tax credits. But builder expectations for the next six months remained at 30, the same level reported in the first quarter of 2009. Also, traffic of prospective buyers in that market segment was unchanged from its year-ago standing, at 18. Meanwhile, the 55+ multifamily condo HMI, which was already quite weak, declined another two points to 11 in the first quarter, matching its lowest level in the six-quarter history of the series. Expectations for the next six months in this segment of the market were down three points from a year ago, to 17, and traffic of prospective buyers also fell three points, to 12.  Read more in our press release, or view the 55+ HMI tables online at www.nahb.org/55HMI. Contact: MondayMorningQuestions@nahb.org.

The Technical Assist Hotline is a great resource for NAHB members who have questions regarding building products, techniques, technologies, and best practices. NAHB and the NAHB Research Center have teamed up to provide this outstanding free service that is designed to assist NAHB’s builder, remodeler and trade contractor members with hands-on construction issues.

Members can call 888-NAHB-MEM (888-624-2636) from 8:30 AM to 4:30 PM EST, Monday through Friday. Alternatively, questions can be submitted online at www.nahbrc.com/techassist.

Technical experts will respond to calls and online hotline inquiries by the next business day. Callers simply provide a specific question, HBA/NAHB affiliation, and contact information in their message. The Technical Assist Hotline is just one more way that NAHB membership pays for itself, so spread the word and make sure to take advantage of it!

Prospects for NAHB's National Membership Day on May 25 are looking good this year, with more than 400 local HBAs already committed to participating. That's a nearly 25% increase from last year, and we're still expecting more HBAs to to join in the fun. On the designated day, participating HBAs will call a special toll-free NAHB hotline at 800-899-6242 between 12:00 noon and 5:00 p.m., EDT to report the projected number of new members they've recruited in May. NAHB's Senior Officers and other volunteer leaders will spend the day at the National Housing Center in Washington, taking calls from the locals, answering questions and connecting with members from across the country. (Pictured: NAHB Immediate Past Chairman Joe Robson taking calls at last year's event.) For each new member joining in May, two Spike credits will be awarded to the recruiter. And for Spike members, that one new builder or associate member you recruit will get you a ticket to the invitation-only Spike Party at the 2011 International Builders' Show in Orlando. Recruiters are also eligible for various other prizes listed on the National Membership Day page on NAHB.org, so check it out!  To learn more about National Membership Day or the special Spike credits and prizes, just call the NAHB membership staff at 800-368-5242, x8347, or email them at membership@nahb.com.  

An upcoming webinar from the NAHB Professional Women in Building will teach home builders how to use social media networking sites to build brands, engage customers and sell more homes. "Using Social Media to Sell Homes" is a one-hour webinar event scheduled for 2:00 p.m. EDT on June 10. Noted experts in the field will provide step-by-step recommendations on how to launch an effective social media program or improve an existing one, and will teach you how to reach specific buyers through these channels. The webinar will also focus on why women are a crucial target market for home builders, and will feature a question-and-answer session at the end. Questions for the panelists may be submitted in advance by visiting the LinkedIn discussion page. NAHB members can register for the webinar online at a discounted price of $24.95 by visiting www.nahb.org/buildingconversations. Note: this event is part of a webinar series, and there is also a package rate available for those wishing to participate in all five upcoming offerings. Registrants will receive one hour of continuing education credit for all NAHB professional designations. Read more about the upcoming webinar right here, or for more information, please contact Mary Knowles, 800-368-5242, x8057.

Hopefully you've already signed up to participate in our upcoming Construction Forecast Conference webinar event, scheduled for this Tuesday, May 18, from 2:00-4:00 PM, ET. If so, this is your reminder to tune in and hear NAHB Chief Economist David Crowe along with Moody's Analytics Chief Economist Mark Zandi and Macroeconomic Advisers President Chris Varvares give their projections of where the housing market and economy are headed, and at what speed. While this always-popular event was previously a day-long, in-person conference with a webcast option, the new format allows us to bring you the most current and accurate content in a streamlined, time-efficient manner at a more affordable price. As always, participants are encouraged to ask questions and will be able to do so directly via the webinar setup. If you haven't signed up yet — move fast. Due to strong demand, online registration has been extended until 5:00 PM ET on Monday, May 17. Click here to register now!