National Association of Realtors

Critical to boosting the economy is the need to stem the rising tide of foreclosures and boost homebuyer confidence in the housing market, the National Association of Realtors® told Members of Congress today. In a letter sent to Congress, NAR advocates prompt action by Congress and the current administration to pass a housing stimulus package to help stabilize the housing market, setting the stage for the U.S. economy to begin recovery.

“As home values continue to decrease in many markets and job losses escalate, homeowners needing to refinance their mortgage or sell their home are left with few options and are sometimes forced to walk away from their mortgage responsibilities,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “This increased inventory further fuels decreases in home values exacerbating the housing and economic crisis, not to mention the crisis to many families and communities.”

NAR tells Congress that to stop the downward cycle a federal mortgage interest buy-down program is needed and should come from the Treasury Department’s Troubled Asset Relief Program. “The buy-down program would complement the loss mitigation elements of TARP and provide an incentive to buy homes, which will reduce the housing inventory. This in turn will stabilize home values, lessen foreclosure pressure, boost home sales activity and breathe new life into our nation’s economy,” said McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth.

Last month NAR shared suggestions for rebuilding the housing market with Congress and the administration, and encouraged the Treasury Department to incorporate parts of its Four-Point Plan for stimulating and stabilizing the housing market. “Housing has always led our economy out of downturns, and lower interest rates coupled with foreclosure mitigation are key ingredients to stabilizing the housing markets and preserving homes and communities,” McMillan said.

NAR urged the government to ensure that safe and affordable mortgages are available throughout the nation. This requires that the higher loan limits passed in the economic stimulus bill earlier this year be made permanent. It is also imperative that the federal government ensure there is sufficient capital to support mortgage lending not only in strong markets but also in tumultuous ones as we are currently experiencing. Additionally, NAR has been pushing for the $7,500 tax credit for first time homebuyers be extended to all homebuyers and that the repay feature be eliminated.

NAR estimates that lowering the interest rate by 1 to 2 percentage points can result in as many as 700,000 additional home sales. “Stabilizing the housing market will lead to a greater economic recovery,” said Lawrence Yun, NAR chief economist.

NAR urged Congress to not delay action but to implement the federal mortgage interest buy-down proposal and other elements of its Four-Point Plan. “We must all work together to make sure we never find ourselves in a situation similar to the current unstable situation with foreclosures rising and people losing the homes they worked so hard to buy,” said McMillan.