Commentary – Restoring economy begins with housing stabilizationRealtors across the country have been advocating for a comprehensive stimulus package to reduce housing inventory, make mortgages more affordable and available, and help deserving families refinance or modify their loans so they can keep their home.
By Greater Alexandria Area Association of Realtors President Gaylen Lerohl
and Executive Director Sandra Thorson
Realtors across the country have been advocating for a comprehensive stimulus package to reduce housing inventory, make mortgages more affordable and available, and help deserving families refinance or modify their loans so they can keep their home. We are committed to these goals and to getting something done immediately. There can be no doubt that stabilizing home prices and restoring confidence in the housing market are critical to an overall economic recovery.
It is vitally important for President Obama and Congress to complete a bipartisan stimulus package focused on housing. The American Recovery and Reinvestment Act of 2009 is a good start but much more needs to be done. It is imperative that the federal government act immediately to encourage homebuyers to re-enter the market and to stop families from losing their homes to foreclosure.
Federal “rescue” dollars should be directed to buy down mortgage rates – a half million additional homes could be sold if interest rates were lowered by just 1 percentage point. Additionally, banks must find ways to help prevent foreclosures and unclog the credit market. These steps are necessary to stabilize housing and ensure that home values do not become artificially low, exasperating today’s problems.
Realtors support a $15,000 homebuyer’s tax credit and its expansion to include all homebuyers, not just first timers. The elimination of the repayment feature and the credit extension through December 2009 will have a meaningful impact for homebuyers. Reinstating the increased FHA, Fannie and Freddie loan limits that expired on December 31, 2008 will also help the recovery by increasing mortgage liquidity. Banks need to begin lending again.
The federal government, realtors, lenders and local municipalities need to work together to turn the economy around. President Obama and Congress will have to move quickly to get a comprehensive housing recovery plan in place to protect families, homes and jobs. A stable housing market is the only way to begin an economic recovery.
We see first-hand that consumer confidence is shaken, but we find the dream of homeownership still very much alive. We urge all parties to work together – and work quickly – to restore confidence in the housing market and the U.S. financial system.