2009-01-08 23:53:02 -
The Indiana housing industry called on Congress today to address the housing crisis that is at the root of the nation's recession.
Dennis Spidel, the owner of Dennis Spidel Custom Homes and the 2009 president of the Indiana Builders Association; Tom Slater, the director of development for Timberland Lumber Co.; Dave VanDyke, the president of Precision Construction; and
Will Wright, the president of Will Wright Building Corp., urged Congress to enact bold measures that will stimulate the housing market and, in turn, revive the local, state and national economies.
"Housing is central to our economy and is an engine of production that can lead us out of the recession," said Spidel. "But it is crucial for Congress to enact a major stimulus package to stop the decline in home values, stem the tide of foreclosures, stabilize financial markets and re-ignite consumer demand."
To get the Indiana economy moving again, the housing industry is urging Congress to support enhancements to the home buyer tax credit and provide below-market, 30-year fixed-rate mortgages for home purchases.
Specifically, the legislation should include:
- A 10 percent tax credit for all qualified home buyers capped at 3.5 percent of FHA, Freddie Mac or Fannie Mae loan limits (equaling $10,000 to $22,000 depending on geographic market). All primary home purchases through December 31, 2009, would be eligible. Repayment would be required only if the home was sold within three years. And the credit would be available at closing, making it easier for buyers to use it as a downpayment;
- A below-market 30-year fixed-rate mortgage for home purchases. The second component of the stimulus plan would provide qualified home buyers with 30-year fixed-rate mortgages at 2.99 percent interest on contracts closed by June 30, 2009 and 3.99 percent interest on closings between June 30 and December 31, 2009; and
- Continued measures to reduce foreclosures and keep people in their homes.
The housing industry representatives cited a similar plan with both a tax credit and a mortgage rate subsidy that was enacted in 1975 when the nation was also in the midst of a recession. That successful stimulus plan jump-started the depressed economy, and the effects continued in communities across the country long after the measure expired.
"Since 1969, we've been supplying materials to home builders. Now, we have over 100 employees," said Tom Slater, director of business development for Timberland Lumber Co., in Brazil, Ind. "Three years ago, we began supplying commercial builders. If it hadn't been for that, we wouldn't be in business today. We are cutting every expense we can - and still we don't know if that's going to be enough. We're not asking for bailout; we're asking Congress to keep the American dream of homeownership alive."
Dave VanDyke, president of Precision Construction in Highland, Ind., described the devastating impact of the economy on his business. "We're a second-generation building company with over 40 years in business. We've had a really tough time here in Indiana. Our business is down 80 to 90 percent, and we've had to let go some very good people. The truth is people are very scared right now to buy a home. This initiative will put a floor under home prices and put home builders back to work."
Will Wright, president of Will Wright Building Corporation in Carmel, Ind., shared how his long experience in the industry has shaped his impressions of this current crisis. "I started my business in 1973, and I experienced the economic recovery in 1975 during the Carter administration. I understand the responsibility Congress has in recognizing the problem we're having, but they need to understand that no one is exempt from the damage. It doesn't make any difference what you paid for your house, the value has declined. This plan would help reduce foreclosures. The basic emphasis is this is not a single silver bullet solution. We must have a multiple directed approach. Housing has always led the economy."
"When the housing industry is in a crisis, the entire community is affected," continued Spidel. "Retailers, manufacturers, service providers and even the local government are affected. Most important, local residents suffer."
"Three million home building-related jobs across the country have been lost as a result of the slowdown in housing production, which represents $145 billion in lost wages and $4.9 billion in lost purchases," said Bernard Markstein, Senior Economist with the National Association of Home Builders. "Deterioration in these jobs has now spilled over into virtually all sectors of the U.S. job market and the economies of states like Indiana."
"We are leaving no stone unturned in our efforts to convince Congress to quickly enact a robust housing stimulus program. There's no question that stopping the decline in home values and restoring demand for housing is the fastest and most effective way of reviving the economy," Spidel said.
The housing leaders in Indiana are part of a new coalition called Fix Housing First, consisting of more than 600 organizations, home building companies and manufacturers advocating for this major stimulus package to stem the decline in home values, stabilize financial markets and re-ignite consumer demand. To learn more about Fix Housing First, go to www.fixhousingfirst.com.
ABOUT NAHB: The National Association of Home Builders is a Washington, D.C.-based trade association representing more than 200,000 members involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction. Known as "the voice of the housing industry," NAHB is affiliated with more than 800 state and local home builders associations around the country. NAHB's builder members will construct about 80 percent of the new housing units projected
www.nahb.org/fileUpload_details.aspx?contentID=75231 for 2009.
National Association of Home Builders
Liz Warin, 202-266-8495
ewarin@nahb.com
www.nahb.org
