Home Builders Lobby Hard for Tax Breaks

Posted on April 29th, 2008 by saman

Last month more than two hundred thousand properties in the US went into foreclosure. This is a five percent increase since February and a sixty percent increase since February of last year. Bank repossessions across the U.S. were up over one hundred percent but there was only an increase of thirty two percent in auction notices. This indicates that there are several homeowners in default that are walking away from their homes and are giving the properties back to the banks. In California, the number of foreclosure filings has more than doubled since last year and have increased twenty one percent since March.Congress is attempting to find ways to make home ownership more secure. The Senate has tried to pass a bill for tax relief to the home building industry but the White House has not been in favor of this because this tax relief would need to be offered to other distressed industries and this would cause a large loss in tax revenue.A story in the New York Times reported that home builders are pursuing their largest lobbying efforts since 1986. Members of home builder associations flooded the offices of government officials during their spring recess.Leading democrats in the House struck down the tax provisions for corporations from their version of the bill. However, they promised to give more protection to home owners that were stuck with loans that they could not pay. Some recent figures on construction state that there is a serious slowing of certain aspects of the construction industry. Both residential and commercial sectors of construction are in decline so the industry will find it very difficult to grow this year. Since the housing market has slowed down, the government will not be able to encourage the building of homes. Home builders are discouraged about their industry but their attitudes have not gotten any worse than they have been. Though builders are reporting that they have seen improved traffic through the model homes they own, this activity has not been equal to sales. Right now it is the traditional season where people buy homes; sales activity is not the same as it would usually be at this time of year.The housing market has not hit bottom and with the poor economy, lending standards that have gotten tighter, and worries over future declining prices, there are still a lot of obstacles. National housing associations are asking Congress to create ways to stimulate the confidence of consumers. They say that such measures should be put into place quickly in order to limit the seriousness of the emerging recession. Congress has presented some legislation that will hopefully prevent foreclosures. The legislations should also expand the reach of the FHA.The index that tracks house sales dropped two points between last month and this month. The index for potential buyers’ held firm at nineteen points for the third month in a row. The index for expected sales gained points.In the near future, the department of commerce will report on the new construction on homes for single families.