NAHB Approaches Congress to Take More Proactive Steps in Mitigating Foreclosure Crisis
The National Association of Home Builders recently approached the Congress to see to it that the housing sector once more took a leading role in bringing back drive to the economy. It wanted speedy action to stretch and increase the limits of $8,000 being offered as tax credit to first time nest builders. The association wanted disputes regarding appraisals to be resolved as this has been causing the pace of home sales to slow down. They also wanted the Congress to put pressure on the regulators to allow for the free flow of credit – something desirable to builders and buyers alike.
In recent months there have been signs of stabilization in the housing sector. Joe Robson the chairperson of NAHB speaking to the House Small Business Committee said that despite modest improvement the winds are continuing to blow against the industry and this is preventing any significant improvement in the real estate market. He said, “Not only are we continuing to feel the impact of foreclosures and short sales in the market, but we’re facing a severe credit crunch for acquisition, development and construction (ADC) lending. Meanwhile, the use of foreclosed and short-sale properties as comps is resulting in inappropriately low appraisals that are effectively sinking one quarter of all new-home sales right now. Add to this the fact that demand and home sales are already showing signs of slowing with the pending Nov. 30 expiration of the first-time home buyer tax credit.”
NAHB proposed that for job generation and the placing of the economy on a more sound footing Congress should stretch the tax credit facility for an extra year and to make it available to all who are buying their main house for residing purposes. Robson said, “We estimate that this would increase home purchases by 383,000 in the next year and help mitigate the foreclosure crisis by whittling down inventory at all levels of the housing market, setting the stage for a full recovery. This stimulus alone would create nearly 350,000 jobs over the coming year, which is exactly what the economy needs right now.”
On the problem relating to appraising Robson said, “Any prospective buyer would recognize the differences in the value between a well-kept home and a distressed property that is damaged or not properly maintained. The same should be true of an appraiser.”
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