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Senator Dave Lawson Fundraiser – 11/12/2011

At the request of the HBADE Hammer & Nails Club, the following notice is being posted for our members:

  Click HERE for a PDF of this flyer.

 

Public invited to attend engagement sessions on sea level rise

NEWS FROM THE DELAWARE DEPARTMENT OF NATURAL RESOURCES AND ENVIRONMENTAL CONTROL
Contact: Susan Love, Delaware Coastal Programs, 302-739-9283; or Melanie Rapp, Public Affairs, 302-739-9902
Public invited to attend engagement sessions on sea level rise
Public comment encouraged on preliminary work of the
Delaware Sea Level Rise Advisory Committee
(Oct. 28, 2011) – Delaware residents are invited to attend public engagement sessions on sea level rise and the potential impacts to Delaware. Five sessions are scheduled at locations throughout the state – Nov. 9 in Middletown; Nov. 15 in Georgetown; Nov. 17 in New Castle; Nov. 21 in Dover; and Nov. 29 in Lewes. At each session, the work of the Delaware Sea Level Rise Advisory Committee will be presented.

DNREC Secretary Collin O’Mara formed the Delaware Sea Level Rise Advisory Committee to assess the risks posed by sea level rise and to develop recommendations for state and local governments, businesses and citizens. “Recent events have demonstrated Delaware’s vulnerability to increased flooding, more intense storms, greater precipitation, and sea level rise,” said Delaware Department of Natural Resources and Environmental Control Secretary Collin O’Mara. “The rigorous work of the Delaware Sea Level Rise Advisory Committee will provide a strong foundation for developing science-based policy recommendations as we work with local communities to prepare for emerging challenges.”
“During the past year, the Committee has discovered that impacts from sea level rise are not limited to beachfront communities, but will affect areas throughout the state,” said Sarah Cooksey, Delaware Sea Level Rise Advisory Committee Co-chair and Administrator of DNREC’s Delaware Coastal Programs. “Our preliminary results will be discussed at each engagement session, and we encourage Delaware residents to join us and provide feedback.”
The following engagement sessions will be held:
4 – 7 p.m., Wednesday, November 9
Middletown High School Auditorium
120 Silver Lake Road
Middletown, DE 19709
4 – 7 p.m., Tuesday, Nov. 15
Georgetown Public Library
2nd floor meeting room
123 West Pine Street
Georgetown, DE 19947
4 – 7 p.m., Thursday, Nov. 17
William Penn High School
Cafeteria 2
713 East Basin Road
New Castle, DE 19720
4 – 7 p.m., Monday, Nov. 21
Kent County Levy Court Complex
Room 221
555 Bay Road (Rt. 113)
Dover, DE 19901
4- 7 p.m., Tuesday, Nov. 29
Cape Henlopen High School
1270 Kings Highway
Lewes, DE 19958
At the public engagement sessions, residents will learn more about the causes of sea level rise and potential impacts to homes, infrastructure, natural resources and the economy. Participants can speak with committee members and scientists, view maps of vulnerable areas and provide comments on the ways sea level rise may affect them, their businesses and communities. Public input is essential for the Advisory Committee to understand the range of residents’ priorities and concerns. Comments from each session will be incorporated in their future reports.

Delaware’s gently sloping coastal plain makes our state more vulnerable than other areas to sea level rise. Tide gauges in the state show that sea levels in Delaware are rising at a rate of about 13 inches over a time span of 100 years – a rate that is expected to accelerate in the coming decades.

For more information on sea level rise engagement sessions, or to view workshop materials online visit
the Delaware Advisory Committee’s public engagement session webpage,
http://www.dnrec.delaware.gov/coastal/Pages/SLRAC-Public-Engagement-Sessions.aspx

Vol. 41, No. 418.

-30-

NAHB Urges Presidential Hopefuls to Focus on Housing Issues

Continuing our strategy to elevate homeownership as a priority issue in the 2012 elections, NAHB this week called attention to the fact that the Republican presidential candidates missed a great opportunity during Tuesday’s night’s debate to explain how they would address the nation’s housing problems in order to get the housing market and economy back on track.  In a press statement issued Oct. 20, NAHB Chairman Bob Nielsen said, “There can be no economic recovery without a housing recovery, yet the silence on housing was deafening during the debate. It is particularly ironic that with the debate setting in Las Vegas, the epicenter of the foreclosure crisis, the candidates chose to duck this topic and other critical housing issues.” Bob also noted that the absence of specific policy proposals to spur the housing market and promote homeownership is not just limited to the GOP presidential contenders. “President Obama needs to take an affirmative position on homeownership as well,” he said. “The failure of the Administration to put forth pro-housing policies is impeding the economic recovery and hurting job growth and consumer confidence.” Notably, several media organizations echoed our sentiments, including the Wall Street Journal and MSNBC, the latter of which called the housing slump “the most skirted issue” in Tuesday’s debate.

NAHB called attention to the fact that, at a time when more than 1.4 million residential construction workers have been idled since April 2006, policy headwinds are preventing workers from returning to their jobs, keeping home buyers on the sidelines and harming the economic recovery. Credit conditions remain extremely tight for home buyers and home builders alike, preventing creditworthy borrowers from obtaining affordable home loans and small home building firms from getting construction loans to build even pre-sold homes and create jobs in their communities. Meanwhile, policymakers are considering mandating 20% downpayments for home buyers and abolishing Fannie Mae and Freddie Mac, which would make it even more difficult to obtain an affordable 30-year home loan, the major housing finance tool for most Americans. Some leaders in Washington are also calling for eliminating or drastically reducing the mortgage interest deduction, which would act as a tax on millions of middle-class home owners, place more downward pressure on home values, and further enflame the foreclosure mess. “Instead of arguing who was to blame for the downturn, all the 2012 presidential hopefuls need to be addressing these housing issues head-on,” our statement said. “Housing and homeownership are critical to a strong and prosperous nation. If any of these anti-housing policies are codified, it could fundamentally alter the ability of the nation to sustain a middle class that has contributed to a century of economic progress.” Contact: MondayMorningQuestions@nahb.org

EPA Adds Some Changes to Original Provisions of Lead Paint Rule for Remodelers

NAHB members were relieved this summer when the Environmental Protection Agency, yielding to recommendations from the association, backed down from implementing a new requirement for lead testing at the completion of a project under the Lead Paint: Renovation, Repair and Painting (LRRP) rule.

The clearance testing requirement would have subjected remodeling customers to even more costs and delays.

Also, in response to concerns from NAHB and others, the EPA has added requirements and made clarifications to the original LRRP rule that may change how the lead regulation is enforced.

Among those changes:

  • Vertical Containment. Responding to concerns about worker safety and the proximity of neighboring properties, the EPA has made concessions on its requirements for exterior and interior vertical containment — or the plastic sheeting or other impermeable materials required to be installed over scaffolding or framing to ensure that dust or debris does not leave the work area.

    For exterior renovations within 10 feet of the property line of adjacent buildings, the EPA had required vertical containment, but has added “or equivalent extra precautions in containing the work area,” giving renovators the flexibility “to design effective containment systems based on the renovation activity and the work site.”

    The EPA also dropped language suggesting that vertical containment was required on exterior renovations in windy conditions.

    Also, on exterior work the distance from impervious sheeting required on the ground was reduced from 10 feet to the “edge of the vertical barrier.”

    For interior containment, plastic sheeting only needs to be laid down to the “edge of the vertical barrier,” and not the six feet beyond the work area required formerly.

  • HEPA Vacuums. The EPA has changed its requirement for contractors to go to the unnecessary expense of buying newer HEPA vacuums, when currently owned vacuums purchased to comply with the 2008 version of the rule were designed to work just as effectively when operated correctly.

    The EPA’s revised language requires that “HEPA vacuums must be operated and maintained in accordance with manufacturer’s instructions.”

    NAHB is advising remodelers to keep up-to-date records of the operations and maintenance schedules of their HEPA vacuums.

  • Test Kits. With the EPA having not yet recognized an improved test kit to determine the presence of lead in the work area before renovation, the agency revised the rule to allow certified renovators to collect paint chips from the work area and send them to an EPA-accredited laboratory for analysis to show the presence of lead.

    While this alternative is more accurate than currently available test kits, NAHB has pointed out that it is not an adequate substitute because it is costlier than test kits, creates further delays for remodelers and requires property owners to disclose this information to future residents.

    Additionally, there are only about 100 accredited labs in the United States and 13 states have no accredited labs at all.

    Furthermore, some states only allow paint chip samples to be collected by certified lead inspectors or risk assessors.

  • Online Training. At NAHB’s urging, the agency has said that online training courses are permitted under the rule, a clarification for some states that had not accepted them.

    The EPA requires eight hours of training to become a certified renovator. NAHB worked with the agency, the Oregon Home Builders Association and the Custom Electronic Design Installation Association to develop an EPA-accredited online certification course that can be a substitute for the six hours of required classroom training.

For a more complete explanation of changes to the LRRP, click here.

For more information, email Matt Watkins at NAHB, or call him at 800-368-5242 x8327.

New EPA Paint Chip Guide ‘Essential’ for Determing If Lead Is in Homes

In the absence of an inexpensive, reliable lead paint test kit, the Environmental Protection Agency is allowing remodelers to send paint chips to certified testing labs to determine whether lead-safe work practices are necessary in the client’s home or any other residential building in accordance with the Lead: Renovation, Repair and Painting (LRRP) rule.

A detailed description of how to properly take a paint chip sample is provided in the EPA’s new “Paint Chip Sample Collection Guide.”

Without the paint chip test or a negative result from a test kit, in homes built before 1978 the remodeler must assume that lead paint is present and work accordingly.

“EPA-certified renovators who choose to take paint chip samples to determine if lead-based paint is present in a work area will find this guide essential,” said NAHB environmental policy analyst Matt Watkins.

The EPA has listed all its recent amendments to the LRRP regulation that are now in effect.

In addition to allowing the contractor to collect paint samples, the agency has:

  • Published “Steps to Lead Safe Renovation, Repair and Painting.” While the document discusses working in a home using lead-safe work practices, it does not give the remodeler the information needed for proper recordkeeping.

    A few suggestions on recordkeeping can be found in the “Small Business Compliance Guide to Renovate Right.”

  • Made additional edits to the “Renovate Right” brochure, which EPA-certified renovators are required to give to customers no more than 60 days and at least seven days before the actual remodeling work begins.

    A revision on page 10 discusses lead-dust testing. If remodelers insert that page into copies of the earlier brochure, they are still considered to be compliant with the pre-renovation education provision of the RRP.

  • Made changes to vertical containment requirements. For exterior renovations within 10 feet of the property line, the EPA is requiring vertical containment, but has given remodelers the flexibility “to design effective containment systems based on the renovation activity and the work site.”

    For both exterior and interior work, the impervious sheeting on the ground/floor is now required to extend to the “edge of the vertical barrier.”

  • Changed its requirements for HEPA vacuums, allowing the use of those purchased to meet 2008 requirements.  The EPA’s revised language requires that “HEPA vacuums must be operated and maintained in accordance with manufacturer’s instructions.”
  • Related to surface coating, the  EPA has refined its definition of “painted surface” to include varnishes and other coatings; however, it does not include enameled surfaces like bathtubs or sinks.

For more information, questions visit the NAHB LRRP Web pages; or email Matt Watkins, or call him at 800-368-5242 x8327.

NAHB Members Invited to Participate in Virtual ‘Town Hall’ Events With Presidential Candidates

NAHB’s efforts to put a spotlight on housing in the upcoming presidential election are moving forward with the initiation of a series of teleforum events that give our members a direct line to the major candidates.

NAHB this week kicked off a series of virtual town hall events with the presidential candidates, which we are cosponsoring along with the Associated Builders and Contractors, National Federation of Independent Business and National Restaurant Association. Our first event came together rather quickly when Congressman Ron Paul confirmed his availability on Oct. 13, and we sent out an all-member email letting you know how you could participate and sign up for future events with other candidates. The idea behind these virtual town halls (we call them teleforums) is to provide our members, along with members of the other cosponsors, with an opportunity to hear directly from the major candidates and ask them questions via telephone. We have invited the following candidates to conduct teleforums with us:

President Barack Obama
Governor Mitt Romney
Governor Rick Perry
Congressman Ron Paul
Congresswoman Michele Bachmann
Speaker Newt Gingrich
Businessman Herman Cain

Congressman Ron Paul was the first to conduct one of these events with us — the Oct. 17 edition of Nation’s Building News will have complete coverage of that event. Going forward, we expect more candidates to soon confirm times in which they can participate in similar teleforums, and we’ll let you know about each subsequently scheduled event as soon as that information is available. In the meantime, if you haven’t yet done so, sign up now to signify your interest in participating in upcoming teleforums by filling out the registration form at this link. Please note that you will need to provide us with a valid telephone number at which you can be contacted when each event begins.

How the Teleforums Work
Due to last-minute changes in the candidates’ schedules, all teleforum times are approximate. Registrants for a particular teleforum will receive an email on the day of that event, letting you know roughly what time to expect a call offering to connect you to the proceedings. Bear in mind that, if at that time you do NOT wish to participate in the teleforum that’s about to take place, all you need to do is hang up when the operator calls you.

NAHB Policy on Presidential Elections
Consistent with our policy, NAHB is not endorsing any presidential candidate. We are simply providing a channel through which the candidates can talk with our members, and vice-versa. It is up to each of our members to decide whether he or she will participate in any of the calls that will be taking place.

Register Now
Click here for the Presidential Teleforum registration page, and if you have any questions about this unique opportunity to connect with the 2012 presidential candidates, contact Nick Gentile (800-368-5242, x8542).

Middle Class Would Suffer With Mortgage Interest Deduction Changes

By Mark Grahne, Atlantic Homes
President, the Home Builders Association of Delaware

Owning a home for most Americans is not only a place to raise a family and build a sense of stability and pride, it is also their single best long-term investment and a primary source of wealth and financial security. As the foundation of the American dream, homeownership has long been a milestone that middle-class families strive to achieve and maintain.

For more than a century, Americans have counted on their homes for their children’s education, for their retirement, and for their financial security. According to the 2007 Federal Reserve Survey of Consumer Finances, the median net worth of a home owner is $234,600, compared to $5,100 for renters.

But as policymakers seeking to reduce the federal deficit consider eliminating or decreasing the mortgage interest deduction, it is younger, middle-class families who would see their longer term financial prospects significantly and negatively affected.

Tampering with the mortgage interest deduction would place more downward pressure on home prices, which would cause more home owners to have mortgage balances that are higher than their homes are worth, spur more foreclosures, and act as a further drag on the housing and economic recovery. Millions of existing home owners who are struggling to make ends meet, but still manage to stay current with their mortgage payments, would face a big tax increase they cannot afford.

And claims that the deduction benefits only wealthy taxpayers and that only a small number of home owners utilize the deduction are misleading. In reality, 70 percent of homeownership tax benefits go to middle-class home owners who earn less than $200,000. And out of 75 million home owners, 35 million claimed the mortgage interest deduction in 2009. This doesn’t even take into account the millions of taxpayers who are renters and one day aspire to own a home of their own, and the roughly 25 million who now own their homes free and clear, but used the deduction in the past.

Policymakers looking to create jobs and boost economic growth need look no further than housing. According to data recently shared by economic experts at the National Association of Home Builders in testimony to Congress, building 100 single-family homes creates more than 300 full-time jobs.

Learn more about the threat to the mortgage interest tax deduction and find out how you can take action to protect it at www.SaveMyMortgageInterestDeduction.com.

Holiday Season Safety Tips

by Mark Grahne, Atlantic Homes, HBA/DE President
The Home Builders Association of Delaware

Planning for the holidays is a busy and joyful time. But all of the decorations, extra electrical cords and the parade of people going in and out of your home calls for more safety precautions to help you make this holiday season safe and happy for you and your family.
Here’s a checklist for home holiday safety:
• Ask a friend or neighbor to watch your house and take in your newspaper and mail if you plan to spend the holidays away from home. Put lights throughout the house on timers to turn them on and off in your normal living pattern.
• If you display a live Christmas tree or live greenery, select the freshest possible. A moist tree is less likely to catch fire. Look for a trunk sticky with sap and for green needles that bend and are secure on the branches.
• When using a live Christmas tree, cut the base at a 45-degree angle. Place it in a container with water and always keep the water level above the cut.
• Place trees a safe distance from stoves, radiators, vents, fireplaces and any other heat source that may dry the tree. Inspect the tree for dryness daily.
• Inspect all holiday light wiring. Defective, worn or frayed electrical wiring should be thrown away. Check for the UL label on lights. Also, be sure to use fixtures specifically designed for outdoor use if you decorate your house, trees or yard.
• Use no more than three light sets on any one extension cord. Also, don’t run electrical cords under rugs. Be sure all lights are turned off before you go to bed or leave the house.
• Place candles and other open flames away from decorations. Never leave burning candles unattended and always supervise children when burning candles.
• Keep a fire extinguisher near your Christmas tree. Make sure your family has a fire emergency escape plan. In case of fire, leave your home and call for help from a neighbor’s home.
• When buying artificial decorations, check for “flameproof” or “fire retardant” qualities.
• Never burn wrapping paper in a fireplace or wood stove. Certain ink pigments react with heat and create airborne particulates that are dangerous to inhale. Also don’t burn evergreens, they could flare out of control and send flames and smoke into your house.
• Cooking is a leading cause of home fires and home fire injuries. When you cook, be sure to wear clothes that fit close to the body so they won’t be ignited by hot burners. Do not leave items cooking on the stove and be sure that pot handles are turned in.
The decorations around your house, lights, gifts, music and the presence of loved ones make the holiday season festive and fun, and with the proper precautions, safe.
Learn more about home safety, maintenance and other homeownership advice at http://www.hbade.org.

A Taxing Issue: The Mortgage-Interest Deduction Debate heats up!

From BUILDER by Hanley Wood, posted on 10/19/2011

Bloomberg’s Ben Steverman asserts that the mortgage interest deduction’s days as a third-rail issue are numbered. He doesn’t come out and say it will get dumped, but the structure of his article maps the debate as “the lobbyists versus academics.” This makes it seem as if one party–the lobbyists–argue for venal interests, while the academics make much more economic sense. Importantly, Steverman quotes research, which says, “a growing number of Americans may be willing to end the mortgage tax deduction — as long as they get something in return. Forty-eight percent of respondents said they were willing to give up all tax deductions, including the home mortgage deduction, in return for lower tax rates for every tax bracket. Forty-five percent were opposed in the survey of 997 adults, conducted for Bloomberg by Selzer & Company.” At any rate, it seems as if it’s not an untouchable matter of debate.

  • Posted on: October 19, 2011
  • Source: Bloomberg

By Ben Steverman – Oct 18, 2011 11:13 AM ET (Corrects language on deductible interest in fourth paragraph.)

The mortgage-interest deduction may be your favorite tax break, but be aware that it has some impressive enemies. The fiscal commissions of two different Presidents proposed eliminating it, first in 2005 and then in 2010. There’s also a steady stream of research from such places as the London School of Economics and the Brookings Institution arguing that the deduction doesn’t boost homeownership, but instead provides incentives for wealthier Americans to buy big houses and take on more debt.

Nevertheless, the mortgage-interest tax deduction survives, fortified in Washington by strong housing industry support and its presumed popularity with voters. Now, according to a recent Bloomberg Poll, a growing number of Americans may be willing to end the mortgage tax deduction — as long as they get something in return. Forty-eight percent of respondents said they were willing to give up all tax deductions, including the home mortgage deduction, in return for lower tax rates for every tax bracket. Forty-five percent were opposed in the survey of 997 adults, conducted for Bloomberg by Selzer & Company.

The results represent a significant shift from a December 2010 Bloomberg survey that asked the same question. That poll showed a majority, 51 percent, opposed to giving up tax deductions, with 41 percent in favor. Given the pressure to lower the federal deficit, “everything is on the table,” says Richard K. Green, director of the University of Southern California Lusk Center for Real Estate. “People are so desperate to figure something out that they’re willing to consider anything.”

Lobbyists versus Academics

The mortgage-interest deduction allows homeowners to lower tax bills by deducting interest on home mortgages from their taxable income. Interest on up to $1 million in mortgages on first and second homes is deductible, along with interest on up to $100,000 in home equity debt.

Lobbyists for homebuilders and realtors vigorously defend the usefulness and popularity of the tax break. Lawrence Yun, chief economist at the National Association of Realtors, says the deduction has “lowered the cost of ownership” and boosted the homeownership rate, which he describes as “the foundation for a very stable, democratic country.” As recently as April, a USA Today/Gallup Poll found that 62 percent of respondents opposed eliminating the tax break.

If the sentiment in previous polls is an accurate reflection of attitudes, many Americans support the deduction without getting a benefit from it. The deduction has a definite high-income tilt: Only about one in four Americans includes mortgage interest on taxes. Renters and homeowners without mortgages have no interest to deduct, while many lower- and middle-class homeowners receive a standard tax deduction and don’t itemize.

Dennis J. Ventry Jr., a professor specializing in tax law at the University of California-Davis School of Law, calls the provision, which costs nearly $100 billion a year, “the most inequitable and inefficient provision in the Internal Revenue Code.” The benefits of deducting interest from income increase with a homeowner’s tax rate, he notes. Thus, according to a 2011 study co-authored by Green, 46 percent of the deduction’s tax benefit goes to households earnings more than $100,000 per year.

Unpredictable Effects

Criticizing the mortgage-interest deduction is far easier than calculating the impact of getting rid of it. If, as many argue, the deduction has spurred “overinvestment” in housing, ending the incentive may have negative and unpredictable effects.

The potential hit to the housing economy is a big unknown. Dean Stansel, an economics professor at Florida Gulf Coast University who has studied the deduction for the Reason Foundation, estimates that the tax break inflates housing prices by less than 1 percent; a separate study calculates that it raises prices by 3 percent to 6 percent.

One research paper forecasts serious trouble if the deduction should disappear, predicting that prices could fall from 2 percent to as much as 13 percent, depending on the metropolitan area. Most vulnerable would be parts of the country with higher incomes and higher home prices, which typically benefit most from the mortgage-interest deduction. For example, according to a March 2011 analysis in Tax Notes, residents of Beverly Hills, California, get a $1,873 per person benefit from the deduction, while residents of Clarksville, Mississippi, gain an average of $45 per person.

On a personal level, the deduction’s biggest beneficiaries will feel the greatest pain if it disappears. Green, of the University of Southern California Lusk Center for Real Estate, estimates that households earning more than $160,000 would pay an average of $2,577 in additional taxes, even after benefiting from a proposed 15 percent tax credit. Places with pricy real estate would bear the brunt of a repeal. “The city of San Francisco would just get whacked,” Green says.

Tempting Target

To avoid dire scenarios, Washington would likely do away with the mortgage deduction in a gentle fashion. The tax advisory panel convened by President George W. Bush in 2005 suggested replacing the deduction with a tax credit equal to 15 percent of interest paid. In 2009, the Bowles-Simpson Commission proposed an annual tax credit of 12 percent, limiting interest to first homes and mortgages up to $500,000.

Unlike tax deductions, tax credits can be claimed by all taxpayers, including those who do not itemize their taxes. That could help a greater number of lower- and middle-income people afford houses. Green estimates that a 15 percent mortgage-interest tax credit would boost homeownership by 2.5 percentage points.

The mortgage deduction could once again be a target for deficit cutters. According to a 2009 Congressional Budget Office analysis, gradually replacing the mortgage deduction with a 15 percent credit would yield $388 billion from 2013 to 2019. Such savings could prove tempting to the Joint Select Committee on Deficit Reduction, which is charged with finding at least $1.5 trillion in deficit savings over the next 10 years.

The inclinations of this “super committee” are, so far, secret, but the mortgage-interest deduction was discussed at a Sept. 22 hearing. Without making any recommendations, Joint Committee on Taxation Chief of Staff Thomas Barthold mentioned the deduction as an example of a “tax expenditure” that could be eliminated as part of an overhaul of the tax code.

The threat of mandatory deep cuts in defense spending and Medicare if the super committee cannot find enough savings may be the only way that the mortgage interest deduction can die. It’s tough to end the tax break, says Green, because the costs are widespread and barely noticed, while the benefits are concentrated in a vocal minority that appreciates the deduction. “It’s only in the context of overall reform that you might see something happen,” he says. With public opinion turning, that day may be drawing near.

The WSJ says ‘it’s time to buy’

  • Posted on: October 19, 2011, Source: Wall Street Journal

U.S. house prices have plunged by nearly a third since 2006, and homeownership rates are falling at the fastest pace since the Great Depression.

The good news? Two key measures now suggest it’s an excellent time to buy a house, either to live in for the long term or for investment income (but not for a quick flip). First, the nation’s ratio of house prices to yearly rents is nearly restored to its prebubble average. Second, when mortgage rates are taken into consideration, houses are the most affordable they have been in decades.

Two of the silliest mantras during the real-estate bubble were that a house is the best investment you will ever make and that a renter “throws money down the drain.” Whether buying is a better deal than renting isn’t a stagnant fact but a changing condition that depends on the relationship between prices and rents, the cost of financing and other factors.

[UPSIDE]

But the math is turning in buyers’ favor. Stock-oriented folks can think of a house’s price/rent ratio as akin to a stock’s price/earnings ratio, in that it compares the cost of an asset with the money the asset is capable of generating. For investors, a lower ratio suggests more income for the price. For prospective homeowners, a lower ratio makes owning more attractive than renting, all else equal.

Nationwide, the ratio of home prices to yearly rents is 11.3, down from 18.5 at the peak of the bubble, according to Moody’s Analytics. The average from 1989 to 2003 was about 10, so valuations aren’t quite back to normal.

But for most home buyers, mortgage rates are a key determinant of their total costs. Rates are so low now that houses in many markets look like bargains, even if price/rent ratios aren’t hitting new lows. The 30-year mortgage rate rose to 4.12% this week from a record low of 3.94% last week, Freddie Mac said Thursday. (The rates assume 0.8% in prepaid interest, or “points.”) The latest rate is still less than half the average since 1971.

As a result, house payments are more affordable than they have been in decades. The National Association of Realtors Housing Affordability Index hit 183.7 in August, near its record high in data going back to 1970. The index’s historic average is roughly 120. A reading of 100 would mean that a median-income family with a 20% down payment can afford a mortgage on a median-price home. So today’s buyers can afford handsome houses—but prudent ones might opt for moderate houses with skimpy payments.

For example, the median home in the greater Phoenix market, including houses, condos and co-ops, costs $121,700, according to Zillow.com. With a 20% down payment and a 4.12% mortgage rate, a buyer’s monthly payment would be about $470. Rent for a comparable house would be more than $1,100 a month, according to data provided by Zillow.com.

Of course, all of this assumes mortgages are available—no given now that lending standards have tightened. But long-term data on down payments and credit scores suggest conditions are more normal than many buyers think, according to Stan Humphries, chief economist at Zillow. “If you have good credit, a job and a down payment, you can get a mortgage,” Mr. Humphries says. “There’s more paperwork and scrutiny than five years ago, but things are pretty much like they were in the ’80s and ’90s.”

Not all housing markets are bargains. Mr. Humphries says Zillow has developed a new price/rent ratio that uses estimates for each individual property rather than city medians, to better reflect the choices facing typical buyers. A fresh look at the numbers suggests Detroit and Miami are plenty cheap for buyers, with price/rent ratios of 5.6 and 7.7, respectively. New York and San Francisco are more expensive, with ratios of 17.6 and 17.2, respectively. The median ratio for 169 markets is 10.7.

For investors seeking income, one back-of-the-envelope way of seeing how these numbers stack up against yields for other assets is to divide 1 by the price/rent ratio, resulting in a rent “yield.” The median market’s rent yield is 9.3% and Detroit’s is 17.9%.

Investors would then subtract for taxes, insurance, upkeep and other expenses—costs that vary widely. But suppose total costs were 4% of the purchase price. That would still leave a 5.3% rent yield in the typical market. With the 10-year Treasury yield at 2.2% and the Standard & Poor’s 500-stock index carrying a dividend yield of 2.1%, rents for residential housing in many markets look attractive.

A few caveats are in order. First, not all transactions are average ones. Even in low-priced markets, buyers should shop carefully. Second, prices could fall further. Celia Chen, a senior director at Moody’s Analytics, expects prices to drop 3% before bottoming early next year and rising slowly thereafter. “If the economy slips back into recession, however, we could easily see a 10% drop,” Ms. Chen says.

And property “flipping” can be dangerous even when prices are rising. That is because, absent a real-estate boom, house price gains simply aren’t that exciting. Research by Yale economist Robert Shiller suggests houses more or less track the rate of inflation over long time periods.

Houses aren’t the magic wealth creators they were made out to be during the bubble. But when prices are low, loans are cheap and plump investment yields are scarce, buyers should jump.

—Jack Hough is a columnist at SmartMoney.com. Email: jack.hough@dowjones.com

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