The predicted volume of arm resets by mid-2008 is expected to reach $100 billion. NAHB hopes proposed FHA reforms will help alleviate this and other fallouts from the sub prime lending crisis and get buyers into more new homes.

Subprime providers thrived because statute limitations kept the Federal Housing Administration from offering more flexible loan options. To make FHA loans more appealing, the Expanding American Homeownership Act of 2007 was passed by the House of Representatives in September and is in committee with the Senate.

Some provisions of the bill will allow the FHA to establish a mortgage insurance premium pricing structure that rewards higher-risk borrowers who establish a track record of timely payments and create 40-year mortgages to reduce borrowers' monthly mortgage payments

Tax deductions such as those for mortgage interest and for state and local taxes — of which property taxes are a big part — must continue.

"As the housing sector seeks to rebound," says Kilmer, "about the worse thing they could do is tinker with any of these provisions in the tax code."

John Dingell, chairman of the House Energy and Commerce Committee, proposed a bill to eliminate mortgage interest deductions for homes larger than 3,000 square feet — considered prime offenders in the production of green house gas emissions.

In 2008, the NAHB will roll out its National Green Building Standard based on its Model Green Home Building Guidelines. With the U.S. Green Building Council's LEED for Homes program being considered and adapted in various municipalities and regions, NAHB wants to get its voluntary guidelines accredited and accepted before standards based on LEED or other programs are mandated.