Real Estate is about Jobs, Posted by Ron

Later this week, the Treasury Department will issue a report recommending changes to the structure of Fannie Mae and Freddie Mac.  This is the latest development in a years-long debate over what the government’s role in housing should be.

As REALTORS®, we know better than anyone else just how vital housing is to families and to our nation.

Fact:  For every additional 1,000 home sales, about 500 jobs are added to the economy.  Those are real jobs that give our families, friends and neighbors a chance to work.

Fact:  Every home purchase pumps $60,000 into the economy.

Fact:  Housing accounts for more than 15 percent of the national gross domestic product.

Fact:  Home owners pay 80 to 90 percent of ALL federal income taxes.

We need to change the dialog.   Critics say housing is a drain on federal resources.  We know better.  Housing is the engine that drives our national economy. Eight of the last ten recessions have ended as a result of robust housing markets.  The other two ended as a result of war spending.  The choice is easy.  America needs a healthy housing market to thrive.

In the days ahead, NAR will be reaching out to Congress and the White House to emphasize the clear connection between housing, jobs and the economy.  Rather than limit support for housing, and the availability of credit, NAR is calling on Congress and the White House to advance policies that will move the housing market back to a healthy 5.5 million sales, where it SHOULD be.

We will be asking lawmakers to:

  • Preserve the mortgage interest deduction at current levels.
  • Move the credit pendulum to equilibrium, defined by a median credit score of 720.
  • Maintain government backing in the mortgage market as part of GSE Reform.

These three steps would help bring the housing market back to a normal level, possibly generating an additional 1 million home sales and 500,000 jobs.

As the voice for real estate, we hope that Congress and White House gets the message:  real estate is all about jobs.

I invite all of you to engage with us.  Go to Realtor.org/homeownership for the latest information and to see how you can join the movement. — Ron Phipps, 2011 NAR President

Comments
  1. Long term resolutions to the current distressed financial markets entail staying to the basic practices of good underwriting standards, amending current appraisal laws to give credit for improvements, and borrowers’ reasonable savings rates.

    No matter what legislation is passed regarding the future of the Government Service Enterprises (GSEs) and private financial institutions, successful lending practices depend on the borrower’s ability and responsibility to repay any loan. Federal Reserve and private bank officers commented with great concerns in 1998 regarding the 1996 financing act that lowered the underwriting standards on loans the GSEs were required to purchase.

    Unfortunately in response to much financial fraud, particularly in New York and New Jersey the resulting Home Valuation Code of Conduct led to artificially devaluing properties with legitimate upgrades. This legislation needs immediate change if residential and commercial properties are to be refinanced, built, or remodeled with new energy efficiency features. Otherwise, such efforts will be futile.

    In the Las Vegas market better performing loans underwritten since January 2008 resulted from lower pricing that enabled qualifed borrowers with a good savings history to finally purchase homes that met their needs. Many examples include couples with children who were able to move out of a one bedroom apartment into single family homes. A client and father of three daughters worked overtime to pay off some debts and build up a down payment for a great single family home.

    In conclusion, attendance the past four years at NAR Conventions reveals our lobbyists are utilizing their political credit as well as possible in addressing critical issues that take time to resolve. As President of the Greater Las Vegas Association of Realtors I am encouraging our members to take advantage of the NAR web site for updates and attend the conventions whenever possible.

  2. A strong housing market is crucial to our economy turning around but we can’t go back to giving away homes to anyone who asks – sub-prime lending is big reason why we are in this recession.

  3. Donna Davis

    The MID is a joke. What we need is THE FAIR TAX!! Get rid of the income tax & replace it with a consumption tax. (Every body pays based on consumption) By eliminating corporate taxes, you would see tons of new businesses coming to this country. This plan would help to create jobs & working people need homes (one they can pay for). If NAR realty wants to support Realtors, I expect them to be in Washington promoting the Fair Tax, (HR 25 I think)

  4. Pat Kaster

    Real Estate has always been about jobs. As goes Real Estate so goes the economy. With tight budgets and municipalities looking at shortfalls – people have to realize real estate is and always has been the life blood of the economy. Real estate development/construction and sales is the only thing that increases tax base without making people angry. As costs continue to sky rocket the only way to get more money to pay them is through growth and real estate. No real estate market – no growth; no increased tax base; no increased revenue; no money. Very basic. The country, the economy nieeds real estate to survive.

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