Taunya Fagan Bozeman Real Estate Blog: SW Montana Homes: MLS Listings

NAHB-Congress should make housing incentives key part of Capitol Hill economic stimulus package

I recommend reviewing and supporting this by calling the office of Montana's Senator, Max Baucus, chairman of the Senate Finance Committee. Contact Jim Messina (202) 224-2611 (Messina is Baucus's Chief of Staff)

Here is a truncated portion of the article:

January 24, 2008 - The National Association of Home Builders (NAHB) took out a full-page ad in USA Today and sent letters to the House and Senate leadership  today, calling on Congress to make housing incentives a key part of any economic stimulus package being crafted on Capitol Hill.  

"Any stimulus plan needs to address the housing downturn in order to stabilize financial markets and get the economy moving forward," said NAHB President Brian Catalde, a home builder from El Segundo, Calif.  

In addition, Catalde urged Federal Reserve policymakers to enact further interest rates cuts when they meet at the end of the month to restore confidence and increase liquidity in the financial markets.  

To help stimulate the economy and address the current housing situation, NAHB, in a letter to lawmakers, urged them to consider the following policy options when crafting a stimulus package:  

- Create a tax credit for the purchase of a home. 

- Expand the net operating loss (NOL) tax deduction. Under present law, a business loss can only be deducted from taxes paid from the previous two years.

- Expand the mortgage revenue bond program.

- Designate housing as an eligible investment for tax-preferred retirement accounts.

- Increase the conforming loan limit for Fannie Mae and Freddie Mac.

- Modernize the Federal Housing Administration (FHA)..."

Read More at NAHB 

Here is the letter from NAHB to Congresspeople:

Dear Speaker Pelosi, Majority Leader Reid, Minority Leader Boehner, and Minority Leader McConnell,

On behalf of the 235,000 members of the National Association of Home Builders (NAHB), I am writing to share our views on the economic stimulus discussions currently taking place in the Congress. Congress last passed economic stimulus legislation in 2002, when housing was a key economic driver that significantly softened and shortened the economic downturn. Now, the reverse is true and housing is contributing to slow economic growth. NAHB respectfully urges the Congress to include in any stimulus package incentives that address the underlying causes for this crisis and to include housing incentives in the package.

NAHB expects 2008 housing starts be approximately one million; a fifty percent decline from the over the two million housing starts realized in 2005. Some reduction in building was expected, given the above-norm production levels and resulting excess inventory in some parts of the country. However, even with this historic reduction in starts, the inventory "overhang" of housing continues to be a serious problem. The for-sale inventory of new homes is 505,000, which represents a 9.3 month supply; a record for the last twenty years in terms of both months supply and number of units.

Existing home inventory and sales are in a similar position with a 10.3 month supply at the current sales rate of 4.3 million units per year. The excess inventory of homes-for-sale places significant downward pressure on housing prices, which present a significant danger to the national economy. Recent actions of the Federal Reserve, such as cutting the federal funds rate to 3.5%, may help stimulate housing demand. However, the Federal Reserve only controls short-term interest rates, and because of the fear of inflation, changes in these rates can have little or even negative effects on long-term mortgage rates.

If housing prices fall 10 % from peak to trough, as many economists expect, then households spend less because they feel (and are) less wealthy. One key reason for reduced consumer spending is that housing wealth is the primary source of savings for most households. If housing prices fall, then homeowners' wealth decreases. As a result, households may decrease current consumption to offset the lost wealth. According to the Congressional Budget Office (CBO), the fall in housing prices would reduce consumption and ultimately subtract 0.4 to 2.2 percentage points January 22, 2008 Page 2

from Gross Domestic Product (GDP) growth. Given that many economists expect only 1% growth in GDP this quarter, the CBO estimates indicate that falling housing prices can easily push the economy into recession. In dollar terms, the CBO report estimates that a 10% housing price decline would subtract $55 to $316 billion from GDP.

The decline in the home building industry is also having direct effects on national economic growth. In the third quarter of 2007, the latest quarter for which data is available, residential fixed investment (home building) subtracted a full percentage point from real GDP growth. Falling activity for home builders also has led to large job losses. On January 4, 2008, the Bureau of Labor Statistics reported that the economy produced only 18,000 jobs in 2007. For home builders, 28,500 jobs were lost in December 2007 alone. Total home building employment is down 293,000 since March 2006; a decline of 8.5%, with forecasts for further declines in the year ahead. Furthermore, many home builders are now reporting substantial financial losses when only a few years ago they were generating jobs, providing local development and paying taxes.

Please find attached a summary of policy options [above] recommended by NAHB to aid the Congress in addressing the housing crisis and, more importantly, help stimulate the economy. NAHB looks forward to working with the Congress and the Bush Administration to craft a comprehensive economic stimulus package that returns the economy to vibrant growth and expansion. Thank you for your consideration of our views.


Gerald M. Howard

Executive Vice President

and Chief Executive Officer

cc: House Ways and Means Committee

House Financial Services Committee

Senate Banking Committee

Senate Finance Committee

*     *     *

giving you the advantage...TM

Taunya Fagan Bozeman Montana Real Estate    406.579.9683   taunya.fagan@prumt.com

Taunya Fagan Prudential Montana Real Estate Banner

4 commentsTaunya Fagan • January 24 2008 10:30PM
NAHB-Congress should make housing incentives key part of Capitol Hill…
I recommend reviewing and supporting this by calling the office of Montana's Senator, Max Baucus chairman of the Senate Finance Committee. Contact Jim Messina (202) 224-2611 (Messina is Baucus's Chief of Staff) Here is a truncated portion of the… more
Google No Longer Indexes Your Keywords-True?
A good friend of my husband's informed him today that his business partner in San Francisco met with some Google afficiandos yesterday, Jaunuary 23, 2008, and was informed by them that Google will not longer index keywords. This does NOT apply… more
She's Suing Her Agent-She Paid Too Much For Her House
Marty Ummel of CARLSBAD, CA, and millions of others believe they paid too much for the houses they bought at the top of this latest housing boom. But Ms. Ummel differs in that she's suing her agent, stating it was all his fault. According to the… more
Should Gallatin County, Montana Remove Development Values Through…
The Gallatin County, Montana county commissioners contemplate Gallatin County, MT zoning as the means to manage both future and present growth. With close to an 11 percent increase in the county's population since 2000, protection of the region's… more
Top Fishing Town, Bozeman, Montana
Bozeman, MT ranks in fourth place out of the top 20 fishing towns in the U. S. according to Field and Stream Magazine. A positive aspect of Montana fishing is the 1985 Stream Access Law allowing everybody recreational access to rivers and streams… more
According to this week's The Economist (Jan. 12th-18th, 2008) magazine, pg 67: "Warning Lights, " America appears ready for the R-word: RECESSION, according to its "R-word index" formula. The Economist 's simple formula, based on how many uses of the… more
Hot Properties in Montana-Subdivisions Out, Premium Property In
Subdividing rural land is dead and premium property, like Montana ranches and Montana live water properties, is quickly going to those who can afford it, said Clark Wheeler, a real-estate appraiser with Norman C. Wheeler and Associates in Bozeman,… more
WEAKENING DOLLAR & DECREASING HOME PRICES: According to the Statesman. com a growing number of foreigners are purchasing a second home in the US for work and play and investment. Cities like New York and Miami have been second home meccas for… more
Now That Christmas is Over, Don't Forget the Homeless Families
Homelessness in America Now that Christmas is over, please do not forget the homeless, especially homeless families with children. In 2005 there were an estimated 98, 452 homeless families, 41% of the entire homeless population. A dearth of… more
Positive Housing News From NAR Chief Economist-Lawrence Yun
January 8, 2008-According to Law rence Yun NAR's Chief Economist, during the next few months, existing home sales should remain steady based upon pending sales; they may even increase later in 2008 and into 2009. Part of the reason is because… more
Lone Mountain Ranch Sold-Will Become Member-Based Only
The premiere Nordic ski resort, Lone Mountain Ranch, built in 1977 and based in Big Sky, Montana has sold. Everlands, a company that buys the world's historical resorts in places like the Bahamas, Alaska, Martha's Vineyard, and beyond recently… more
Bozeman Montana Has New Mayor
Bozeman has a new mayor, Kaaren Jacobson, sworn in on January 7, 2008. In an effort to pay for Bozeman's growth, she stated her desire is to increase road impact fees, which is contrary to a recent vote by the former city commission to reduce impact… more
A Sneak Preview - Private Luxury Land Community in Bozeman, Montana
A New Criterion in Luxury Land in Bozeman, Montana Find your private residence nestled in the foothills of Bozeman Montana Seven Ranges is a private, gated, luxury land community, on Portnell Road, Bozeman, MT, offering 18 tracts, 18 home sites… more
For Sale Big Sky Yellowstone Club $400 To $600 M
Tim and Edra Blixseth, the divorcing couple who built the famed Yellowstone Club in Big Sky, Montana, plan to sell the club for between $400-$600 million. The "Club, " as locals call it is a private ski and golf community for the super-rich,… more
It's Here! Bozeman Real Estate Report
You can now view southwest Montana real estate market data: home sales trends; realty market conditions; land sale prices; condo, townhome and residential house values, for Bozeman, Big Sky, Belgrade, Manhattan, Livingston and all southwest Montana… more
Bozeman Airport Expansion Gallatin Field
Here is the latest update on the Gallatin Field expansion, June 2011 a result of the Gallatin Valley's continued growth and anticipated future growth, despite these economically tough times Way back in January 2008, Bozeman airport directors… more
Supporting Your Local Food Bank
Building upon my December 13, 2007 Blog Homelessness Blog 12. 13. 07 about helping the homeless this holiday season, I'd like to share an article in today's Bozeman Daily Chronicle newspaper Gallatin Valley Food Bank 1. 02. 08 (article is in orange)… more
The Aging West… are retreating to Montana
According to the Center for the Rocky Mountain West Baby Boomers shifting the traditional demographic pattern from that of retirement to warm climes to that of retirement to the cooler, mountainous regions of the Rockies, particularly Wyoming and… more
Montana Skiing!
There is no time to Blog because it's ski time in Montana. Now is the time to consider buying property in Big Sky, Montana where the skiing is BIG and the snow is wonderful. Land prices are coming down, home prices are falling. Big Sky… more
7 Ranges Ranch Bozeman, Montana Ranches Montana Horse Property
You've seen all that Aspen has to offer, Telluride, Tahoe and Jackson Hole… IT'S BEEN WELL WORTH THE WAIT "Find your private residence nestled in the foothills of Bozeman, Montana. " * * * It's Here! 7 Ranges - Bozeman Ranches is… more