NAHB National Survey Key findings from a national survey of 2,000 likely voters, conducted May 3-9, #11190

Methodology

METHODOLOGY 3 NAHB NATIONAL SURVEY – MAY 2011 On behalf of the National Association of Home Builders, Public Opinion Strategies and Lake Research Partners conducted a national survey of N=2,000 likely 2012 voters. The survey was conducted May 3-9, 2011 and has a margin of error of +2.19%. Due to the large sample size of our survey, we are able to show key data among both homeowners and renters. Fully 73% of voters in our survey identified themselves as homeowners, which is slightly higher than recent public polls among adults. However, this is not surprising as voters tend to be a higher educated, higher income audience than the adult population. In addition, due to the large sample size of our survey, we are able to show key data among key political “swing areas.” Throughout this presentation, we have broken out the data by seats held by House Republican freshmen, Charlie Cook’s Swing House & Senate seats, as well as among Washington Post Reporter Chris Cillizza’s Presidential Swing states.

METHODOLOGY 4 NAHB NATIONAL SURVEY – MAY 2011 House GOP Freshman Seats: Alabama, 2nd Alabama, 5th Arizona, 1st Arizona, 3rd Arizona, 5th Arkansas, 1st Arkansas, 2nd Arkansas, 3rd California, 19th Colorado, 3rd Colorado, 4th Florida, 12th Florida, 22nd Florida, 24th Florida, 25th Florida, 2nd Florida, 5th Florida, 8th Georgia, 7th Georgia, 8th Idaho, 1st Illinois, 10th Illinois, 11th Illinois, 14th Illinois, 17th Illinois, 8th Indiana, 4th Indiana, 8th Indiana, 9th Ohio, 1st Ohio, 6th Oklahoma, 5th Pennsylvania, 10th Pennsylvania, 11th Pennsylvania, 3rd Pennsylvania, 7th Pennsylvania, 8th South Carolina, 1st South Carolina, 3rd South Carolina, 4th South Carolina, 5th South Dakota, At-Large Tennessee, 3rd Tennessee, 4th Tennessee, 6th Tennessee, 8th Texas, 17th Texas, 23rd Texas, 27th Virginia, 2nd Virginia, 5th Virginia, 9th Washington, 3rd West Virginia, 1st Wisconsin, 7th Wisconsin, 8th Kansas, 1st Kansas, 3rd Kansas, 4th Louisiana, 3rd Maryland, 1st Michigan, 1st Michigan, 2nd Michigan, 3rd Michigan, 7th Minnesota, 8th Mississippi, 1st Mississippi, 4th Missouri, 4th Missouri, 7th Nevada, 3rd New Hampshire, 1st New Hampshire, 2nd New Jersey, 3rd New Mexico, 2nd New York, 13th New York, 19th New York, 20th New York, 24th New York, 25th North Carolina, 2nd North Dakota, At-Large Ohio, 15th Ohio, 16th Ohio, 18th

METHODOLOGY 5 NAHB NATIONAL SURVEY – MAY 2011 Cook Report House and Senate Swing Seats: U.S. HouseU.S. Senate New Mexico North Dakota West Virginia Missouri New England Montana Virginia Massachusetts Nevada Ohio Florida Arkansas, 2 nd California, 11 th California, 20 th California, 26 th California, 3 rd Connecticut, 5 th Florida, 22 nd Georgia, 12 th Georgia, 2 nd Illinois, 10 th Illinois, 13 th Illinois, 17 th Illinois, 8 th Indiana, 2 nd Iowa, 3 rd Iowa, 4 th Michigan, 9 th Minnesota, 8 th Missouri, 3 rd Montana, At Large Nevada, 2 nd New Hampshire, 1 st New Hampshire, 2 nd New Jersey, 3 rd New Jersey, 7 th New York, 23 rd New York, 25 th North Carolina, 11 th North Carolina, 13 th North Carolina, 2 nd North Carolina, 7 th North Carolina, 8 th Ohio, 13 th Ohio, 6 th Pennsylvania, 11 th Pennsylvania, 12 th Pennsylvania, 4 th Pennsylvania, 7 th Pennsylvania, 8 th Texas, 23 rd Texas, 27 th Utah, 2 nd Washington, 8 th Wisconsin, 7 th

METHODOLOGY 6 NAHB NATIONAL SURVEY – MAY 2011 Chris Cillizza’s Presidential Swing States: Colorado Florida Indiana Iowa Minnesota Nevada New Hampshire New Mexico North Carolina Ohio Virginia Swing States

The Value of Home Ownership

Despite the housing crisis, ups and downs in the market and the decline in the value of homes, owning a home is still very much a part of the American dream. Even in this weak housing market that some may describe as risky, those Americans who do not currently own a home, especially those under the age of 50, overwhelmingly say they want to buy a home. Americans consider their homes as their single best investment. What Americans are saying is that despite the ups and downs of the housing market and the risks, home ownership is worth the risk – clear and simple.

9 NAHB NATIONAL SURVEY – MAY 2011 %One of Most/Very Important Staying out of debt or getting out of debt. Owning your own home. Being successful at your job. Saving enough for retirement. Americans believe that owning their own home is as important as being successful at their job or being able to pay for a family member’s education. Being able to provide your family with more than you had when you were younger. Being able to pay for yours or a family member's education.

10 NAHB NATIONAL SURVEY – MAY 2011 Which ONE of these would you say is your best investment? Home ownership and a retirement savings program are considered by voters to be their best investments. Rental property A home A retirement savings program like an IRA or 401 (K) A savings account Stock market investments Ownership of a business

11 NAHB NATIONAL SURVEY – MAY 2011 Some people say that owning a home is the best long-term investment they can make and is worth the risk of ups and downs in the housing market. Do you agree or disagree with this statement? Agree 43% Strongly Disagree 9% Strongly An overwhelming number of Americans say owning a home is worth the ups and downs of the housing market. +52

12 NAHB NATIONAL SURVEY – MAY 2011 Some people say that owning a home is the best long-term investment they can make and is worth the risk of ups and downs in the housing market. Do you agree or disagree with this statement? Agree 42% Strgly Dis- agree That sentiment is strong among renters and those who currently owe more than their home is worth Agree Dis- agree Agree Dis- agree Agree Dis- agree Agree Dis- agree 50% Strgly 39% Strgly 40% Strgly 29% Strgly 13% Strgly 13% Strgly 15% Strgly By Residence Type Among Those Who Owe More On Their Home Than It Is Worth

13 NAHB NATIONAL SURVEY – MAY 2011 Some people say that owning a home is the best long-term investment they can make and is worth the risk of ups and downs in the housing market. Do you agree or disagree with this statement? Agree 41% Strgly Dis- agree And, there is agreement across age groups Agree Dis- agree Agree Dis- agree Agree Dis- agree Agree Dis- agree 41% Strgly 45% Strgly 42% Strgly 50% Strgly By Age

Attitudes of Homeowners

15 NAHB NATIONAL SURVEY – MAY % Very Almost every homeowner is happy with their decision to own a home. How happy would you say you are with your decision to own a home? (N=1,460) HappyUnhappy Happy 83% Unhappy 17% Among Those "Under Water"

16 NAHB NATIONAL SURVEY – MAY 2011 And, would you advise a member of your family or a close personal friend just starting out to buy a home in order to build long-term assets, or do you think owning a home is too risky of an investment? (N=1,460) Yes, Would Advise to Buy No, Too Risky Yes, Would Advise to Buy No, Too Risky Fully 80% of homeowners would advise a close friend or family member just starting out to buy a home. (That’s true even among those homeowners “under water” on their mortgage.) Total and Among Those Who Owe More On Their Home Than It Is Worth

Attitudes of Non-Homeowners

18 NAHB NATIONAL SURVEY – MAY 2011 YesNo +48 Is one of your goals to eventually buy a home, or is that NOT a goal of yours? (N=517) Nearly three-fourths of voters who do not currently own a home say that it is a goal of theirs to eventually buy one.

19 NAHB NATIONAL SURVEY – MAY 2011 Is one of your goals to eventually buy a home, or is that NOT a goal of yours? (N=517) Yes No Yes No Yes Younger voters (those most likely to be in the market for a home in the next few years), overwhelmingly say buying a home is a goal of theirs. By Age %-14% 55+33%-66%

20 NAHB NATIONAL SURVEY – MAY 2011 Saving for a down payment and closing costs And, which one of the following would you say is your biggest barrier to buying a home? Is it... (N=376) The biggest barrier for those who want to own a home is money for a down payment and closing costs. Concerns that if home prices drop, your investment could be worth less than what you paid Inability to get a loan Your current debt Job uncertainty Your credit score

The Politics of Housing: Encouraging Home Ownership

There is a consensus across party lines and among voters in all swing areas that it is appropriate and reasonable for the federal government to provide tax incentives to promote homeownership. Voters’ message to Washington: Leave the mortgage interest deduction alone. By a two-to-one margin, voters say they would be less likely to vote for a candidate who voted to eliminate the MID.

23 NAHB NATIONAL SURVEY – MAY 2011 Now, as you may know, since the federal income tax was introduced in 1913, the federal government has used the tax code to encourage home-ownership. In general, do you think it is appropriate and reasonable for the federal government to provide tax incentives to promote home-ownership or do you think that is not a good idea? YesNoYesNoYesNoYesNo Americans across party lines believe it is appropriate and reasonable for the federal government to provide tax incentives to encourage home ownership. TotalBy Party By Tea Party Support No Yes

24 NAHB NATIONAL SURVEY – MAY 2011 By Ethnicity Now, as you may know, since the federal income tax was introduced in 1913, the federal government has used the tax code to encourage home-ownership. In general, do you think it is appropriate and reasonable for the federal government to provide tax incentives to promote home-ownership or do you think that is not a good idea? This sentiment shows little variation by ethnicity. YesNoYesNoYesNo

25 NAHB NATIONAL SURVEY – MAY 2011 Among GOP Freshman Seats YesNoYesNoYesNo And, voters in America’s key "swing areas" also agree. Among Cook Report House Among Cillizza Presidential Swing States Among Cook Report Senate Yes Now, as you may know, since the federal income tax was introduced in 1913, the federal government has used the tax code to encourage home-ownership. In general, do you think it is appropriate and reasonable for the federal government to provide tax incentives to promote home-ownership or do you think that is not a good idea?

The Politics of Housing: Raising the Down Payment Requirement

27 NAHB NATIONAL SURVEY – MAY 2011 Have you seen, read or heard anything about proposals being considered in Washington regarding raising down payment requirements when purchasing a home? YesNo Few voters have heard anything about proposals to raise the down payment requirements when buying a home. -62

28 NAHB NATIONAL SURVEY – MAY 2011 And, do you believe these proposed changes will make it easier or more difficult to buy a home? (N=188) EasierMore Difficult 38% Much More But, fully 92% of those who have heard believe that will make it more difficult to buy a home. -87

29 NAHB NATIONAL SURVEY – MAY 2011 FavOpp Opinions are divided on this issue; those most opposed tend to be Americans who would be in the market to purchase a home in the future. By Residence Type/Age Now, I’d like to read you some proposals that are being considered in Washington that affect the housing industry, and please tell me whether you would favor or oppose each one… Requiring that home buyers put a (minimum) of twenty percent down when they purchase a home FavOppFavOppFavOppFavOppFavOppFavOpp -0- Total 28% Strg 29% Strg

The Politics of Housing: The Mortgage Interest Deduction

31 NAHB NATIONAL SURVEY – MAY 2011 % Strongly Oppose%Total Oppose Eliminating the home mortgage interest deduction that homeowners can take on their tax returns. Limiting the mortgage interest deduction for those earning over $250,000 per year. Eliminating the deduction for interest paid for a second or vacation home. Scaling back the mortgage interest deduction for homeowners with mortgages of $500,000 or more. Eliminating the deduction for interest paid on home equity loans. Lowering the home mortgage interest deduction that homeowners can take on their tax returns. All proposals to change the home mortgage interest deduction are opposed by a majority of Americans.

32 NAHB NATIONAL SURVEY – MAY 2011 Now, I’d like to read you some proposals that are being considered in Washington that affect the housing industry, and please tell me whether you would favor or oppose each one… Eliminating the home mortgage interest deduction that homeowners can take on their tax returns. FavorOpposeFavorOpposeFavorOpposeFavorOppose A strong majority of voters oppose eliminating the home mortgage interest deduction. TotalBy Party 53% Strongly 50% Strongly 52% Strongly 58% Strongly

33 NAHB NATIONAL SURVEY – MAY % Strong 39% Strong 11% Strong 45% Strong 12% Strong 38% Strong 21% Strong 35% Strong And, “lowering” the mortgage interest deduction is also rejected by voters across party lines. Now, I’d like to read you some proposals that are being considered in Washington that affect the housing industry, and please tell me whether you would favor or oppose each one… Lowering the home mortgage interest deduction that homeowners can take on their tax returns. TotalBy Party FavorOpposeFavorOpposeFavorOpposeFavorOppose

34 NAHB NATIONAL SURVEY – MAY % Strong 36% Strong 13% Strong 42% Strong 12% Strong 36% Strong 17% Strong 30% Strong Americans also reject eliminating the deduction for interest paid on home equity loans. Now, I’d like to read you some proposals that are being considered in Washington that affect the housing industry, and please tell me whether you would favor or oppose each one… Eliminating the deduction for interest paid on home equity loans. TotalBy Party FavorOpposeFavorOpposeFavorOpposeFavorOppose

35 NAHB NATIONAL SURVEY – MAY 2011 Now, I’d like to read you some proposals that are being considered in Washington that affect the housing industry, and please tell me whether you would favor or oppose each one… Eliminating the deduction for interest paid for a second or vacation home. FavorOpposeFavorOpposeFavorOpposeFavorOppose And, a majority oppose eliminating the deduction for interest paid for a second or vacation home. TotalBy Party 29% Strongly 28% Strongly 27% Strongly 33% Strongly 22% Strongly 23% Strongly 26% Strongly 17% Strongly

36 NAHB NATIONAL SURVEY – MAY 2011 FavorOpposeFavorOppose A majority even oppose “scaling back” the home mortgage interest deduction for homeowners with large mortgages or those with higher incomes. Scaling back the mortgage interest deduction for homeowners with mortgages of $500,000 or more. Limiting the mortgage interest deduction for those earning over $250,000 per year. Now, I’d like to read you some proposals that are being considered in Washington that affect the housing industry, and please tell me whether you would favor or oppose each one… 19% Strongly 30% Strongly 22% Strongly 33% Strongly

37 NAHB NATIONAL SURVEY – MAY 2011 When voters are read two opposing points of view on eliminating the home mortgage interest deduction... Now, I’d like to read you two different opinions on eliminating the mortgage interest deduction... Those who favor this proposal say that the benefits of this deduction go disproportionately to high income Americans and that eliminating it will help reduce the deficit by increasing government revenue. Opponents of this proposal say that the mortgage interest deduction helps families achieve home ownership, which helps owners build assets for the middle class and provides stability to families. …while…

38 NAHB NATIONAL SURVEY – MAY 2011 Do you favor or oppose a proposal to eliminate the home mortgage interest deduction? FavorOpposeFavorOpposeFavorOpposeFavorOppose Nearly two-thirds of voters oppose eliminating the home mortgage interest deduction, with strong intensity in opposition. TotalBy Party 44% Strongly 13% Strongly

39 NAHB NATIONAL SURVEY – MAY % Much A majority of voters across party lines say they would be less likely to support a candidate for Congress who wanted to eliminate the home mortgage interest deduction. Would you be more likely or less likely to vote for a candidate for Congress who proposed to eliminate the home mortgage interest deduction? MoreLessMoreLessMoreLessMoreLess TotalBy Party By Tea Party Support Less More

40 NAHB NATIONAL SURVEY – MAY 2011 And, voters in America’s “swing seats” would be less likely to support a candidate who wanted to eliminate the mortgage interest deduction. Would you be more likely or less likely to vote for a candidate for Congress who proposed to eliminate the home mortgage interest deduction? Among GOP Freshman Seats Among Cook Report House Among Cillizza Presidential Swing States Among Cook Report Senate LessMoreLessMoreLessMoreLessMore

Voter Beliefs

Owning a home is part of the American dream. A strong housing industry means more jobs and more money in our communities. Voters link homeownership to retirement security.

43 NAHB NATIONAL SURVEY – MAY 2011 %Total Convincing Homeownership as part of the American Dream and the housing industry's linkage to jobs resonates strongly with voters. A strong housing industry means more jobs and more money in our communities. Every new single-family home built creates three full-time jobs and increases the property tax base that supports local schools. We need to strengthen the housing market to keep our local economies growing and creating jobs. For many people, owning a home is part of their American Dream: It creates a stronger community, a place to raise a family, and is their most valued stable investment for their children’s college education and their own retirement and well-being. We need to strengthen the housing market so that more Americans can achieve homeownership.

44 NAHB NATIONAL SURVEY – MAY 2011 Homeownership as an investment and as a middle class value also touch voters. Home ownership is key to having a strong middle class and helping people build toward the American dream. The recent housing crisis threatened to keep that out of reach for too many Americans. We need policies that encourage home ownership if we want to rebuild the middle class. Many Americans have planned their retirement by being able to live in the homes they have now paid off, and many others plan to use their investment in their homes to live on in retirement. To help ensure secure retirement for millions, we need to stabilize the housing market. %Total Convincing

Bottom Line

BOTTOM LINE 46 NAHB NATIONAL SURVEY – MAY 2011 Owning a home is a core value and still part of the American dream. Voters want the government to develop policies that will encourage growth in the housing market. And, they do NOT want the government to make it harder for people to achieve the American dream.

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