But on the other hand, you can save faster for a house because you are now doing it with before tax dollars, and your earnings on your savings is not taxed. Also, with removal of embedded tax the cost of the new home will come down. Also, since the banks do not pay tax on the interest income they are earning the interest rates will be reduced.
For more information on this go to : http://www.fairtax.org/pdfs/Homebuilders%20will%20benefit%20from%20the%20FairTax.pdf
That's great over time, but the initial shock to the system will be drastic. Sure, they could save more, but it would still take several years. That first few years would be hell for that industry.