The status of housing as the least taxed investment in America, which has helped fuel an eight-year boom in real estate values, may be in jeopardy as a presidential commission considers changes to the federal tax code.

The panel, which is headed by two former senators, Connie Mack and John Breaux, and is due to report to President Bush by September 30, is studying options to lower taxes on many types of investments to meet Mr. Bush’s goal of spurring savings and economic growth. Changes to housing-related tax incentives will also be considered, the panel’s staff director, Jeffrey Kupfer, said in an interview.

Economists say such policies would have the effect of eroding the relative advantage housing has enjoyed over other investments since 1997, when Congress effectively made most sales of primary residences tax-free.

“One of the pillars of strength of the housing market is the fact of the tax-advantaged nature of the asset,” a senior economist at JPMorgan Asset Management in Columbus, Ohio, Anthony Chan, said. “To the extent that you chip away at that, you would see housing somewhat negatively impacted.”

Fueled by both favorable tax-law changes and the lowest interest rates in 40 years, the national median home price has risen 69.3% since 1997. That year, Congress allowed homeowners to exclude up to $500,000 in gains when they sell homes they occupy, and eliminated rules requiring sellers to buy more expensive homes to avoid taxes. Before that, sellers faced taxes as high as 39.6%.

Suddenly, homeowners could sell highly appreciated property and do anything they wanted with the proceeds. Taxes on the sale of homes that aren’t a primary residence also have been reduced twice since 1997 to rates as low as 5%. The 1997 tax changes even made divorce settlements less complicated, because estranged couples no longer face tax bills when they divide real estate.

The hot housing market has played a significant role in generating American economic growth, economists say. Bob Rasche and Howard Wall at the Federal Reserve Bank of St. Louis estimate that 22% of the 2.3 million jobs created since the end of the 2001 recession were linked to housing.

The 1997 changes “just released this tsunami of resources and wealth in the housing market,” a former chief of staff for the congressional Joint Economic Committee and now chief investment strategist at Claymore Advisors LLC in Lisle, Ill., Brian Wesbury, said.

In contrast, income from other forms of investment is taxed at higher rates, creating the relative advantage for housing. It is this relative advantage for housing that may be called into question by the tax commission. Members have said at hearings that they are considering a wide range of ways to stimulate savings. The options range from cutting rates on dividends, interest, and capital gains to streamlining current tax-free savings mechanisms for retirement, education, and health care – or even junking the income tax in favor of a system that taxes only consumption.

A member of the tax commission, Bill Frenzel, a former congressman from Minnesota, says panelists are wary of recommending any changes that may pop a real-estate bubble.

Mr. Bush, in his instructions to the tax panel, said that it should “recognize the importance of homeownership” in considering what changes to recommend.