As this year’s presidential race heats up, we are sure to hear from candidates on a number of important issues that will have an impact on our country and its economy. However, there is one topic in particular that is crucial to Americans – homeownership.
Restoring the health of the housing market and supporting homeownership in America will contribute to the economic recovery we so greatly need right now. As a Realtor, I firmly believe housing must become a national public policy priority, but it’s also a top-of-mind issue for voters.
In a recent nationwide poll of 1,500 likely voters commissioned by the National Association of Home Builders (NAHB), a majority of respondents said they value homeownership and oppose any steps by the government that would make it more difficult to own a home. Almost seven out of 10 voters who do not currently own a home said they want to purchase one some day, but too many roadblocks exist – namely tougher credit standards, higher down payment requirements, and lack of job security.
Additionally, three out of every four voters say its “appropriate” and “reasonable” for the federal government to provide tax incentives to promote homeownership. Seventy-three percent of those surveyed said they oppose eliminating the mortgage interest deduction or reducing it in any way across income levels, and two-thirds of voters said the U.S. government should do more to help qualified home buyers obtain a long-term, fixed-rate mortgage.
Simply put, homeownership matters.
Importantly, over the past 12 months we have seen clear signs of stabilization within the Boston-area housing market. Specifically, home sales rose consistently on an annual basis over each of the final six months of 2011, inventory levels are at their healthiest in three years, and the annual median selling price for single-family homes in metropolitan Boston has rebounded to its highest point since 2007.
This month, Boston was one of 100 U.S. cities to make the NAHB/First American Improving Market Index, which identifies metro areas with at least six months of improvement in home prices, housing permits and employment. Furthermore, our relatively low unemployment rate, above average household income, and modest population growth make Boston “ripe for a real estate rebound,” according to Forbes.com.
Nationally, the housing market also appears to be brightening, with existing home sales forecasted to increase 12 percent in 2012 and single-family housing starts expected to improve 37 percent over last year, according to Moody’s Analytics. The fact that we are poised for a recovery in the residential real estate market makes it all the more critical that our federal policy makers, including the White House and Congress, act to do no harm to the housing sector.
Preserving The Dream
But despite this optimism, it’s indisputable that creditworthy buyers are being denied their dream of homeownership because they can’t qualify for a loan, and many existing homeowners are facing underwater mortgages and foreclosure.
We call upon our elected government officials to do more to assist homeowners struggling to stay in their homes and to address the lack of affordable and accessible mortgage financing available today. We commend President Obama for proposing enhancements to the Home Affordable Refinance Program that will expand federal assistance to homeowners who don’t hold mortgages backed by Fannie Mae and Freddie Mac. We urge Congress and the lending community to support this plan and implement it and other measures to modify loans and reduce monthly mortgage payments.
The reality is that weak underwriting standards and exotic mortgages were the main cause for today’s foreclosure crisis and high mortgage default rate, not well-underwritten loans with affordable down payments. It’s time to fix the over-correction that occurred in the lending industry and stop punishing borrowers with solid credit and income.
At the end of the day, homeownership provides independence, a sense of privacy and security, and the ability to take advantage of financial benefits afforded through federal tax deductions on mortgage interest and property taxes. These fundamental attributes not only provide a healthy, stable environment for raising a family, but contribute to one’s ability to meet long-term financial goals.
While the decision to become a homeowner is a very personal one, anyone willing and able to assume the responsibilities of owning a home should have the opportunity to pursue that dream. As Realtors, we urge lawmakers to make housing a top priority and remind them that a healthy housing market is necessary to strengthen our communities and the nation’s economy.
William R. Dermody is president of the Greater Boston Association of Realtors, and currently serves as director for the Massachusetts and National Associations of Realtors. He is a licensed real estate broker and manager of Coldwell Banker Residential Brokerage in Needham.
