When we look at how the credit crisis has evolved, despite alarms raised in the mid 2000s, and the ineffectual steps taken thus far to boost housing, concerns remain about whether our political leadership in both parties truly understands what is necessary to restore consumer confidence in housing.
While the new stimulus contains some supportive measures for housing in the form of a first-time buyer tax credit of $8,000, higher loan limits and some loan modifications to avoid foreclosure, those gains could be largely offset by the administration’s proposal to reduce the interest rate deduction for homeowners earning $250,000 or more, a long-standing provision that has been integral to the appeal of home ownership. Both NAR and NAHB are opposing this measure.
Builders, Realtors oppose Obama cut of mortgage interest deduction
(WASHINGTON) – The Obama proposal to reduce the mortgage interest deduction for families making more than $250,000, and use the money to fund health care reform, is being rejected by the Home Builder and Realtor associations.
The NAHB said, “This proposal will increase the cost of housing for many middle-class families, particularly in high-cost areas such as California and the Northeast, which will only further undercut the housing market, exert more downward pressure on values and work against the president’s efforts to stabilize housing.”
NAR said, "There is never a good time to propose something that undermines the basic foundation of homeownership, but given our current housing crisis, this has to be the worst possible time. … The tax deduction of interest paid on mortgages is both a powerful incentive for homeownership and one of the simplest provisions in the tax code. It should not be targeted for change."
What are your thoughts about these developments, and how can real estate professionals influence decisions that are being made, given that many Americans believe housing recovery is essential to economic recovery?
Posted By: 
Pam O’Connor