Entries Tagged as Consumers
Majority of all voters value homeownership
By an overwhelming margin, American voters strongly value homeownership and would oppose efforts to weaken or eliminate the mortgage interest deduction or diminish a federal role to help qualified home buyers obtain affordable 30-year mortgages, according to a new nationwide survey gauging likely voters' attitudes towards homeownership and housing policy issues.
"The American electorate is sending a clear message that owning a home remains a cornerstone of the American Dream and preserving a federal commitment to homeownership is essential to maintain a thriving middle class and get housing and the economy back on track," said Neil Newhouse, a partner and co-founder of Public Opinion Strategies.
Conducted on Jan. 2-5 on behalf of the National Association of Home Builders by the Republican and Democratic polling firms of Public Opinion Strategies in Alexandria, Va., and Lake Research Partners in Washington, D.C., the comprehensive survey of 1,500 likely voters includes data from key political "swing areas," including National Journal political analyst Charlie Cook's swing House and Senate seats and Stuart Rothenberg's presidential swing states. The survey, which has a margin of error of ±2.5 percent, is a follow-up to a similar national poll conducted last May.
The poll shows that three out of four voters--both owners and renters--believe it is appropriate and reasonable for the federal government to provide tax incentives to promote homeownership. This sentiment cuts across regional and party lines, with 84 percent of Democrats, 71 percent of Republicans and 71 percent of Independents agreeing with this statement.
Also, two-thirds of respondents say that the federal government should help home buyers to afford a long-term or 30-year, fixed-rate mortgage.
Moreover, 73 percent of voters oppose eliminating the mortgage interest deduction. These figures held firm across the political spectrum, with 77 percent of Republicans, 71 percent of Democrats and 71 percent of Independents against doing away with the mortgage interest deduction.
Meanwhile, 68 percent would be less likely to vote for a congressional candidate who proposed to abolish the deduction, a figure that was virtually identical across all party affiliations (69 percent of Independents and 68 percent of Democrats and Republicans).
A majority of voters are also against proposals to reduce the mortgage interest deduction, eliminate the deduction for interest paid for a second home, limit the deduction for those earning more than $250,000 per year, scale back the deduction for home owners with mortgages above $500,000 and do away with the deduction for interest paid on home equity loans.
"With the 2012 election season in full swing, candidates running for the White House and Congress would be wise to heed the will of the American voters, who have expressed broad support for government policies that encourage homeownership and oppose efforts to make it more difficult to get a home loan and to tamper with the mortgage interest deduction," said Celinda Lake, president of Lake Research Partners.
Among the poll's other key findings:
- 96 percent of home owners are happy with their decision to own and 84 percent who are "underwater," or owe more on their mortgages than their home is worth, expressed the same sentiment.
- 79 percent of home owners would advise a family member or close friend just starting out to buy a home, and 69 percent of those who are underwater on their mortgage would offer the same advice.
- 74 percent said that despite the ups and downs in the housing market, owning a home is the best long-term investment they can make.
- Homeownership and a retirement savings program are considered by voters to be their best long-term investments.
- 78 percent of respondents said that owning their own home is very important to them.
- Nearly seven out of 10 voters who are not currently home owners (68 percent) said it was a goal of theirs to buy a home.
- Job uncertainty and saving for a downpayment and closing costs are the biggest barriers to buying a home.
The survey findings are consistent with the results of other public opinion surveys. In a New York Times/CBS News poll conducted in June, 89 percent said that homeownership is an important part of the American Dream and more than 90 percent indicated that it is important for the federal government to continue the mortgage interest deduction.
According to a Pew Research Study conducted last March, 81 percent of respondents agree that buying a home is the best long-term investment a person can make and 81 percent of renters surveyed said they would like to buy a house.
"Even in a down housing market, homeownership remains a core American value, with the vast majority of citizens who do not currently own a home saying they want to buy a home," said Bob Nielsen, president of the National Association of Home Builders and a home builder from Reno, Nev. "Those running for office in November need to understand that voters will not look kindly on any candidates who seek to dismantle the nation's long-term commitment to homeownership."
Poll results can be downloaded at www.nahb.org/homeownershippoll.
Author: CRBRA Admin | On: January 16, 2012 | In: Government Affairs · Consumers | No Comments
How to hire a professional remodeler
If you have collected photos of your dream kitchen, drafted a general budget, and talked with friends about how you wish your home was more comfortable or modern, you may be ready to hire a professional remodeler to get the job done right. The Capital Region Builders & Remodelers Association (CRBRA) has some helpful tips to guide you in finding the best remodeler for your project.
“Do your homework when hiring a professional remodeler,” recommends local builder and former CRBRA Remodelers Council chairperson Anthony Guidarelli. “A professional has training, experience, and references from satisfied clients to demonstrate their remodeling expertise.”
Check out these steps for hiring a professional remodeler:
Collect names of remodeling companies.
Start by searching CRBRA’s Directory of Professional Remodelers at Albany's Great Northeast Home Show, at the Saratoga Home & Garden Show, or on the CRBRA website. You’ll get a list of nearby remodelers to contact.
Discuss your project with a couple of remodelers.
Call a few remodelers from your list to discuss your project. Describe what you envision for the home remodel, styles you like, your estimated budget, and other ideas for the remodeling work. Ask the remodelers if they can provide background information on their expertise. They may have a website or brochure they can share that describes their experience and accomplishments.
Ask if the remodeler has general liability insurance.
Be sure to ask some important questions about the remodeler’s business that will help ensure you hire the best professional. Does the remodeler have a license, if required in your state? Do they have general liability insurance in case of an accident on the job? Do they guarantee their work? How do they handle any problems that may arise on the project? Having these answers in advance will prevent future problems and nail down the best professional remodeler for the job.
Check the references and background of the remodeler.
After you start speaking with remodelers and find one or two who match your project’s needs, be sure to conduct some background research by checking with the Better Business Bureau, talking to their references, and asking if they are a member of a trade association such as CRBRA. Remodelers with these qualities tend to be more reliable, better educated, and more likely to stay on top of construction and design trends.
Don’t fall for the lowest bidder.
Many people may be lured by the lowest price for their remodeling project, thinking that they have found a great deal. But beware of these alluring low prices. These bids may be more costly in the end if the contractor is cutting corners, not taking into account certain costs, or is inexperienced. Professional remodelers have stories about coming into homes to fix remodels from unscrupulous contractors who did shoddy work or failed to complete the job. Often times, the lowest price may not ultimately provide the best value for your home remodel. Make the smartest investment in your home by hiring a professional remodeler. They’ll help you stay on budget, solve remodeling challenges, and provide a higher-quality service.
Related articles:
Top Ways to Add Value to Your Home
Why Hire a Certified Lead-Safe Renovator?
All About Aging in Place
For more tips on planning a home remodel or hiring a professional remodeler, visit our special remodeling section or contact Capital Region Builders & Remodelers Association.
Author: CRBRA Admin | On: November 16, 2011 | In: Consumers | No Comments
Housing: A time to buy
A recent report by Dr. David Kelly, CFA, and David M. Lebovitz of J.P. Morgan Funds focuses on the current housing economy, and on the opportunities that exist for consumers.
With the debt crisis in Europe still unresolved and economic growth in the U.S. sluggish, the capital markets continue to exhibit elevated volatility. However, this does not mean that no investment opportunities exist. Although the U.S. housing market remains extremely depressed, we believe that given current valuations and demographic dynamics, now may be the time to consider an investment in housing.
Download the complete Market Insights report
Author: CRBRA Admin | On: October 24, 2011 | In: Consumers | No Comments
Housing shortage likely if AD&C lending crisis continues
<<< Back: Housing production credit crisis will have harsh consequences
Setting the Record Straight
As the debate over tax reform and the regulatory structure of the housing finance system intensifies, misconceptions about housing and finance are proliferating. Following is the truth about some of the most widespread inaccuracies.
Misconception: Only the wealthy benefit from the mortgage interest deduction.
This pervasive fiction is a commonly cited reason for justifying elimination of the mortgage interest deduction.
Income tax deductions for mortgage interest and real estate taxes primarily benefit middle-class taxpayers with incomes between $50,000 and $200,000. While some groups will argue the contrary, consider this: taxpayers earning less than $200,000 pay about 43 percent of all income taxes. However, they receive 68 percent of the total benefit of the mortgage interest deduction and 77 percent of the total benefit of the real estate tax deduction. Moreover, larger benefits go to larger households and families, such as those with children.
Misconception: In the wake of the recession and housing market downturn, Americans have become disenchanted with homeownership and it is no longer a part of the American Dream.
Not so, according to recent polls by NAHB, the Pew Research Center and the New York Times/CBS News. In a Pew Research Center survey conducted in March 2011, 81 percent agreed that owning a home is the best long-term investment a person can make. And in a national poll of voters conducted for NAHB in May 2011, 80 percent of home owners said they would advise a family member or a close friend just starting out to buy a home in order to build long-term assets. In a New York Times/CBS News poll in June 2011, 89 percent said that homeownership is an important part of the American dream.
Misconception: Housing is not as important to the American economy as many other industries.
Actually, the downturn in the housing market is one of the largest contributors to the nation’s high unemployment rate. Total employment in residential construction (building and trade contractors for single-family, multifamily, land development and remodeling) is down more than 1.4 million jobs from the peak employment rate of 3.45 million in April 2006. The housing downturn has also contributed to the loss of more than one million other jobs--jobs in manufacturing, transportation, retail sales, engineering and other industries that provide goods and services to the housing industry. Building 100 new single-family homes generates more than 300 jobs.
Misconception: Homeownership advocates say everyone should own a home.
Homeownership isn’t for everyone, but everyone should be able to choose the home they want, whether they rent or buy. And government policies, such as the proposed Qualified Residential Mortgage standard, should not limit homeownership opportunities unnecessarily.
The actions policymakers take today will determine in large part where our children live tomorrow. As the debate over housing policy unfolds, it is crucial to ensure that homeownership remains attainable, that people can choose the type of housing they prefer, and that safe, decent and affordable housing remains an enduring national priority. Any other legacy is unthinkable.
Author: CRBRA Admin | On: October 04, 2011 | In: Government Affairs · Politics · Consumers | No Comments
Housing production credit crisis will have harsh consequences
<<< Back: Federal government must support the housing finance system
With inventories of new homes nearly depleted in many markets, builders should be gearing up to meet demand, create new jobs and keep the economic expansion moving forward.
Unfortunately, the credit pendulum has swung so far out of balance that many lenders are refusing to make loans for potentially profitable new housing projects. Under pressure from federal banking regulators, they are even calling in performing loans.
Bank lending for residential construction (including acquisition and development of land and construction costs) dropped 69 percent between the end of 2007 and the end of 2010, according to a preliminary NAHB analysis of data from banks regulated by the Federal Deposit Insurance Corporation.
During that time, outstanding acquisition, development and construction (AD&C) lending for one- to four-unit housing development purposes dropped from $203 billion to $63 billion, a much steeper decline than the reduction in the total value of residential construction for which building permits were issued.
Home builders cannot keep their doors open and create jobs in their communities if they cannot get credit to build even pre-sold homes. And builders in the midst of finishing sound projects cannot pay subcontractors and other materials and service providers if lenders will not grant routine loan extensions or if banks require payment-in-full before homes can be finished and delivered.
Unless lenders start making loans to builders for acquisition and development of land and construction of new homes (AD&C loans), the nation will face a severe housing shortage in the near future.
While a large number of foreclosures and distressed properties have flooded the market in recent years, the inventory of homes for sale varies widely from one location to another, and the greatest amount of foreclosure activity has been concentrated in a few specific markets.
Meanwhile, the nationwide inventory of completed newly built homes is extremely low due to the limited amount of new construction that has taken place during the economic recession.
Demand for new homes is driven by household formations, and according to projections by the Joint Center for Housing Studies of Harvard University, demand for new homes between 2010 and 2019 is likely to range from 1.6 million to 1.9 million annually.
Current housing production is falling far short of that need. Builders broke ground on 587,000 new homes in 2010, according to the Census Bureau. And as of July 2011, total private housing starts were 604,000 at an annualized rate, with both single-family and multifamily starts falling well below projected demand.
Moreover, NAHB estimates that approximately 2 million household formations have been delayed as a result of recent economic conditions, and these potential households constitute a “shadow demand” for the nation's housing markets. As the economic picture improves, this demand will also be unlocked, helping to reduce housing vacancy rates and increase the need for new home building.
Next: Housing shortage likely if AD&C lending crisis continues >>>
Author: CRBRA Admin | On: October 04, 2011 | In: Government Affairs · Politics · Consumers | No Comments
Federal government must support the housing finance system
<<< Back: Abolishing other important tax measures would also harm home owners
Some members of Congress are actively pushing to abolish Fannie Mae and Freddie Mac and end the federal backstop for housing. Absent a federal role to help absorb market risk, private lenders would increase interest rates and fees on all types of available financing options for low- and moderate-income borrowers and for affordable rental housing. The 30-year, fixed-rate mortgage, the major housing finance tool for most Americans, would become increasingly scarce and much more costly, pricing many creditworthy borrowers out of the marketplace.
Complicating the situation, the federal government is looking to trim back the Federal Housing Administration’s participation in the market, which would further limit the availability of low downpayment mortgages. And in the wake of the financial crisis, FHA, Fannie Mae and Freddie Mac have become the primary sources of financing for rental housing.
Even with the current high level of federal support, fewer mortgage products are available now than in the past, and these loans are being underwritten on much more stringent terms. At present, almost a quarter of all borrowers who apply for loans are turned down, according to the Federal Reserve. As the private market assumes a greater role in the mortgage marketplace, maintaining an appropriate level of government support is essential to preserve financial stability, promote investor confidence and ensure liquidity and stability for homeownership and rental housing.
Next: Housing production credit crisis will have harsh consequences >>>
Author: CRBRA Admin | On: October 04, 2011 | In: Government Affairs · Politics · Consumers | No Comments
Abolishing other important tax measures would also harm home owners
<<< Back: The Low Income Housing Tax Credit helps provide affordable rental housing
As for other homeownership-related tax code provisions, abolishing the deduction for state and local property taxes would not only depress home values and raise taxes for home owners, it would also shrink the local tax base of many communities, causing already cash-strapped state and local governments to further cut jobs and essential services.
Repealing the capital gains exclusion on the sale of a principal residence would saddle home owners with a 15 percent (or the applicable capital gains rate) tax on the profit from the sale of their homes, hampering their ability to enter the move-up market or to fund a secure retirement.
For members of the baby boom generation looking to retire, this would be especially harmful. It would wipe out a significant portion of their housing wealth just when they need it most.
Proposed Qualified Residential Mortgage Requirements Could Delay or Prevent Homeownership
Six federal agencies are proposing a national standard that would require a minimum 20 percent downpayment, which would keep homeownership out of reach of most first-time home buyers and many middle-class households. About 62 percent of first mortgages taken out to purchase a home last year would not have qualified under this standard because they had downpayments of less than 20 percent, according to LPS Applied Analytics, a mortgage data firm, as reported in The Wall Street Journal.
Borrowers unable to make a 20 percent downpayment or to obtain FHA financing would be expected to pay a premium of up to two percentage points for a loan in the private market to offset the increased risk to lenders, according to NAHB economists. This would annually disqualify about 5 million potential home buyers, resulting in 250,000 fewer home purchases each year. Such a drastic cutback would have a disproportionate impact on minorities and low-income families struggling to achieve the dream of homeownership.
Moreover, low-downpayment loans have been originated safely for decades, and low downpayments are not what drove the housing lending crisis, according to the Center for Responsible Lending, a non-profit, non-partisan research and policy organization. “Low downpayment home loans have been a significant and safe part of the mortgage finance system for decades, bearing little resemblance to subprime and other alternative mortgage products that crashed our economy. And responsible low downpayment loans are also a key to the
recovery of our nation’s housing market and economy.”
The Administration and federal regulators need to offer a new plan that ensures a safe and healthy mortgage market, lowers the risk of default and keeps homeownership affordable for working American families.
The Center for Responsible Lending estimates that it would take 14 years for the typical family to save enough money for a 20 percent downpayment on a median-priced single-family home.
Next: Federal government must support the housing finance system >>>
Author: CRBRA Admin | On: October 04, 2011 | In: Government Affairs · Politics · Consumers | No Comments
The Low Income Housing Tax Credit helps provide affordable rental housing
<<< Back: The threat to housing
The Low Income Housing Tax Credit (LIHTC) is the most successful affordable rental housing program in our nation’s history. However, it has also been targeted by lawmakers. Eliminating the LIHTC would bring production and rehabilitation of affordable rental housing to a standstill.
Since its inception, the program has enabled the production of more than two million affordable apartments. More than 40 percent of the nation’s renters are already paying at least 35 percent of their household income toward rent, and they need affordable options. The LIHTC serves households earning 60 percent or less of the area median income with rents restricted to keep the units affordable.
The program creates approximately 90,000 new full-time jobs, adds $6.8 billion in income to the U.S. economy and generates approximately $2 billion in federal taxes each year. In recent years, the LIHTC has produced about 75,000 new apartment homes annually. The program is essential to address the shortage of affordable housing options in our cities and towns.
Next: Abolishing other important tax measures would also harm home owners >>>
Author: CRBRA Admin | On: October 04, 2011 | In: Government Affairs · Politics · Consumers | No Comments
The threat to housing
<<< Back: New home construction and remodeling can generate millions of jobs
Washington policymakers are threatening to eliminate our nation’s long-standing commitment to homeownership, which would have repercussions for generations to come. This broad-based attack on homeownership is being waged in the tax, legislative and regulatory arenas. Such a radical policy shift would negatively affect every family in every community across the land.
Millions of first-time home buyers and middle-class households would be left out in the cold with only the faintest hope of ever owning a home, the production of affordable rental and new single-family housing would grind to a halt, and countless jobs would be lost.
In the wake of the worst financial crisis since the Great Depression, it makes sense to encourage prudent underwriting and effective consumer education to make sure that buyers select homes they can afford and mortgages they can pay over the long term. But it does not make sense to attack the mortgage interest deduction that is so important to the American middle class, or to tighten credit so much that many households that can afford homeownership simply cannot qualify for a mortgage. Such ill-advised actions would devalue housing and prolong the nation’s economic pain for years to come.
An Unjustified Attack on the Mortgage Interest Deduction
One of the primary targets of this unjustified attack on homeownership is the mortgage interest deduction (MID).
This cornerstone of American housing policy has been in place since the inception of the tax code nearly 100 years ago and supports the aspirations of families at all income levels to become home buyers. Americans overwhelmingly oppose any action by Congress to tamper with the mortgage interest deduction, according to the results of an NAHB poll conducted in the spring of 2011. However, many lawmakers have expressed a willingness to eliminate or curtail this vital housing tax provision.
Cutting the tax benefits associated with owning a home would impose a huge tax increase on millions of middle-class home owners and send shockwaves through the economy. Eliminating or limiting the MID would further depress home values, leaving more home owners with mortgages larger than the value of their property and fueling even more foreclosures.
A study by the Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, found that limiting the deduction to a 28 percent maximum tax rate--as the Administration proposed--would cause housing prices in large metropolitan areas to fall by as much as 10 percent. At a time when stabilizing housing prices is of paramount importance to restoring the economy, a deliberate action by the nation’s elected leaders would devalue homes and force even more home owners underwater.
The mortgage interest deduction primarily helps middle-class home owners and is consistent with the principles of a progressive income tax. The deduction is most valuable for younger households who tend to be recent home buyers with large mortgages, small amounts of home equity and growing families. IRS data indicate that the largest deduction dollar amounts go to people aged 35 to 44. As a share of household income, the largest amounts go to those aged 18 to 34. Almost 75 percent of the total deduction is claimed by those under age 55; those aged 35 to 44 claim 30 percent.
John Weicher, director of the Center for Housing and Financial Markets at the Hudson Institute, characterizes the proposal to eliminate the mortgage interest deduction as “bad economic policy” that would create a new bias in the tax code. Weicher served as assistant secretary for housing and federal housing commissioner at the U.S. Department of Housing and Urban Development from 2001 to 2005.
A Home Owner is a Landlord and a Tenant
"Your house is an asset, an investment, as well as a place to live. A home owner is both an investor and a consumer, both a landlord and a tenant, someone who owns a house and is renting it to himself or herself. Like any other business person, a landlord can deduct business expenses. For rental housing, these include interest on the mortgage, property taxes, maintenance expenditures, and depreciation on the property. At the same time, the landlord has to pay tax on the rent he or she receives, after deducting these business expenses. A home owner/investor has the same business expenses, but can’t deduct all of them. The home owner can deduct mortgage interest and property taxes, but not maintenance or depreciation. The home owner also doesn’t have to pay taxes on the rental value of the home. So home owners have a tax advantage over landlords because owners don’t pay taxes on the rental value of their home; and landlords have tax advantages over home owners because they can deduct maintenance and depreciation, and home owners can’t. But home owners and landlords are treated equally with respect to mortgage interest and property taxes. Both can deduct these expenses." -John Weicher, Hudson Institute
Next: The Low Income Housing Tax Credit helps provide affordable rental housing >>>
Author: CRBRA Admin | On: October 04, 2011 | In: Government Affairs · Politics · Consumers | No Comments
New home construction and remodeling can generate millions of jobs
<<< Back: Housing is a key element in the nation’s economy
It’s also important to note that the employment effects of new home construction and remodeling extend far beyond the actual structure. About half of the jobs created by building new homes are in construction. They include framers, electricians, plumbers, finish carpenters and all of the other workers who contribute to preparing the land and building the home. The rest are in housing-related industries that produce building materials and provide services to both home builders and home buyers. They include:
- Furniture, lighting and appliance industries
- Metal products industries
- Plastics and carpeting production
- Architecture and engineering
- Real estate agents, brokers and appraisers
- Wood products industries
- Concrete, gypsum and paint production
- Manufacturing construction equipment and other products
- Selling, moving and storing products
- Management, administration, government and law
- Finance and insurance
Perhaps more than any other consumer product, housing is “Made in America.”
New homes and apartments don’t arrive here on container ships from other countries, and most of the products used in home construction and remodeling are manufactured here in the United States.
More than 1.4 million jobs in residential construction have been lost since employment peaked at 3.45 million in April of 2006, according to the Bureau of Labor Statistics. To date, less than two percent of those jobs have been restored.
Next: The threat to housing >>>
Author: CRBRA Admin | On: October 04, 2011 | In: Government Affairs · Politics · Consumers | No Comments
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