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Advocate for Stable and Sustainable Housing Markets During the Congressional Summer Recess
Congress' summer recess has officially begun and presents a unique opportunity for REALTORS®. This month-long “district work session” presents a great chance for REALTORS® to remind Congress about the critical issues facing the real estate economy and what needs to be done when Congress returns to Washington after Labor Day.
Members of Congress will spend the next few weeks in their home districts listening to the concerns of their constituents. During this break, the National Association of REALTORS® is asking its members to meet with their Senators or Representative and remind them that stable and sustainable housing markets are an indispensable component of our economic recovery.
Specifically, members should ask their Senators and Congressman to do three things:
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Preserve the Mortgage Interest Deduction (MID)
- First, Do No Harm. Housing is not recovering at the rate it should be. Prices remain unstable, and inventories of homes for sale continue to grow in many areas. Any limitation on the MID is a tax increase on America's homeowners.
- Eliminating the Second Home Deduction will Hurt Communities and Destroy Jobs. Eliminating or curtailing the MID for second homes would hurt housing values in areas with high second home concentration. An equally great or even greater harm would come to businesses that rely on tourism and seasonal residents as their customers.
- Not Every Second Home is a Palace. The median price of a second home in 2010 was $150,000 down 11.2% from 2004.
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Support an Extension of the FHA and GSE Loan Limits.
- Mortgage Loan Limits Will Drop Without Congressional Action. The current loan limits are set to expire on September 30, 2011. Unless Congress acts, FHA and GSE loan limits will drop to 115% of local area median home price with a cap of $625,500 from the current limit of 125%, with a cap of $729,750.
- Decreasing the Limits Impacts Nearly Every State—Not Just High Cost Areas. More than 669 counties in 42 states and the territories would be negatively impacted by the loan limit formula and cap change. The average decline in loan limits would be more than $68,000.
- The Number of Families Impacted Will Be High. On October 1, 2011, some 5 million homes—roughly 27% of all owner-occupied homes in the U.S.—will become ineligible for mortgage financing, since there is little to no private mortgage financing available.
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Reauthorize the National Flood Insurance Program (NFIP).
- Millions of American Taxpayers Rely on the NFIP for Flood Protection. 5.6 million property owners rely on the program in 21,000 communities where flood insurance is required for federally related mortgages.
- Stopgap Extensions and Shutdowns Have Exacerbated Market Uncertainty. Since September 2008, Congress has approved nine NFIP extensions and allowed five lapses. During the June 2010 lapse, 47,000 home sales were delayed or cancelled according to NAR survey data.
When Congress returns to Washington in September, NAR will continue to work with Federal Policy Coordinators (FPCs) and Members of Congress them to ensure these three important issues are addressed.