WASHINGTON – Oct. 5, 2011 – National Association of Realtors® (NAR) President Ron Phipps joined a panel of experts to discuss solutions for addressing the country’s housing and economic challenges during the New Solutions for America’s Housing Crisis forum. Economic Policies for the 21st Century and the Progressive Policy Institute hosted the event.
“We need to keep housing first on the nation’s public policy agenda, because housing and homeownership issues affect all Americans, and a housing recovery is necessary for the nation’s economic well-being,” Phipps said during the forum.
“As the leading advocate for homeownership, Realtors know that issues like affordable financing, natural disaster insurance, the mortgage interest deduction, and foreclosures and short sales don’t just affect people who own a home – homeownership shapes communities and strengthens the nation’s economy,” said Phipps. “America needs strong public policies that promote responsible, sustainable homeownership and that will help stabilize the nation’s housing market to support an economic recovery.”
Phipps said that housing is not recovering at the rate it should be and called on legislators and regulators to do no harm. He said that proposed legislation, regulatory rules or changes to homeownership tax benefits need to help America out of today’s economic struggles – not further harm consumer confidence or exacerbate problems within the fragile real estate industry.
“Too-stringent standards are curtailing the ability of creditworthy consumers in obtaining mortgages to purchase a home, and that’s impacting the recovery,” said Phipps. “Making mortgages available to creditworthy homebuyers and streamlining loan modifications and short sales will help stabilize and revitalize the housing industry, and reduce the rising inventory of foreclosed homes.”
NAR Chief Economist Lawrence Yun also participated in the forum on a panel, “Homeownership, Tax Policy and Deficits.” Yun said it’s a misplaced argument to say the mortgage interest deduction (MID) is suddenly part of the deficit problem, when it’s been part of the federal tax code for nearly 100 years.
“The mortgage interest deduction is vital to the stability of the American housing market and economy,” said Yun. “Now is the worst possible time to discuss changes to the tax laws, which could impair the housing market’s fragile recovery and a broader job market recovery. Reducing or eliminating the MID is a de facto tax increase on homeowners, who already pay 80 to 90 percent of U.S. federal income tax. And middle-class families would be among the hardest hit; 65 percent of families who claim the MID earn less than $100,000 per year,” said Yun.
Yun also emphasized that any changes to the MID would greatly hamper the ability of small businesses to create jobs given that housing equity is often a major source of funding.