NAHB NEWS Rising Incomes Boost Housing Affordability in First Quarter of 2018 raStrong wage growth more than offset an increase in mortgage interest tes to boost nationwide housing affordability in the first quarter of 2018, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI) released today. In all, 61.6 percent of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $71,900. This is up from the 59.6 percent of homes sold that were affordable to median-income earners in the fourth quarter. “Continued job growth, rising wages and strong consumer confidence are fueling housing demand. In turn, this should lead to more buyers entering the housing market in the coming months,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “However, builders continue to face headwinds that could impact affordability, including chronic labor and lot shortages, rising prices for building materials and excessive regulations.” “At the national level, median family income rose an impressive 5.7 percent to $71,900 in 2018 from $68,000 last year, and this wage growth helped to boost housing affordability,” said NAHB Chief Economist Robert Dietz. “A growing economy, along with tight inventories and increasing household formations, will lift housing production in the year ahead. But we also expect mortgage rates to continue to rise, and this will place downward pressure on affordability.” Read More HELOC Win Retains $760 Million in Remodeling Incentives hEver since the inception of the U.S. income tax in 1913, home owners ave been able to deduct interest paid on home equity loans (HELOCs). The Omnibus Budget Reconciliation Act of 1987 limited the mortgage interest and HELOC deductions to interest paid on $1,000,000 and $100,000 of debt, respectively. Then came the Tax Cuts and Jobs Act of 2017 (TCJA). The TCJA included the first major changes to these interest deductions in 30 years. Although the headline housing change was the $750,000 cap placed on the mortgage interest deduction (MID), the law also eliminated the deduction for interest paid on HELOCs—a potentially significant cut to the remodeling industry. After combing through prior law and regulatory guidance regarding HELOC debt, NAHB came to the conclusion that interest paid on home equity loan debt remains deductible under the new law. Read More 20 HBRA of Fairfield County | MAY 2018 NAHB Commends Confirmation of Brian Montgomery as FHA Commissioner R andy Noel, chairman of the National Association of Home Builders (NAHB) and a custom home builder from LaPlace, La., issued the following statement regarding the Senate confirmation of Brian Montgomery to run the Federal Housing Administration (FHA): “NAHB applauds the Senate confirmation of Brian Montgomery as the new FHA commissioner. Having served in this same position under presidents from both sides of the political aisle, he has a firm grasp of the issues and challenges confronting home buyers, renters and home builders. NAHB looks forward to working with the new FHA commissioner to ease regulatory burdens that are harming housing affordability and to make homeownership and rental housing more accessible for hardworking American families.” Read More
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