The following Press Release was made available last week by the National Association of REALTORS®, and I consider it to be a compelling analysis of the current economic conditions and the state of homeownership in our Nation right now, with vital decisions coming up for the 2011 Congress.
I thought it important enough to include in my blog:
Washington, DC, November 16, 2010
Although the recent trend of rising long-term borrowing rates may mean higher mortgages for consumers in the coming months, the greater obstacles to housing market recovery are job creation and availability of credit, according to a National Association of REALTORS® analysis.
Last week, NAR's Board of Directors approved a credit policy to urge the mortgage lending industry to reassess and amend their policies so more qualified home buyers can become home owners.
"Currently, the overly tight underwriting standards are holding back the pace of housing market recovery," said Yun. "In particular, creditworthy small business owners and those who want to purchase investor properties have encountered extreme difficulties in obtaining a mortgage. In contrast, all indications are that recently originated mortgages with Fannie Mae, Freddie Mac, and the Federal Housing Administration have solid loan performance, implying that credit is only going to the most well-qualified borrowers. Additional creditworthy borrowers who are willing to stay well within budget and meet reasonable underwriting criteria should be able to obtain a loan to help speed the housing and economic recovery."
If the Bush tax cuts are extended for those earning less than $250,000 but taxes are increased for higher earners, Yun expects about 1.5 million net new jobs to be added to the economy in 2011. Mortgage rates are expected to rise to 5.4 percent by the end of 2011 from current 4.2 percent average rate provided the inflation rate stays manageable at near 2 percent. Total home sales, both existing and new combined, would rise to 5.5 million in 2011 from 5.1 million in 2010. If the Consumer Price Index inflation rate was to reach 3 percent, then mortgage rates could rise to 6 percent by the end of 2011, cutting home sales to 5.2 million.
"If the Bush tax cuts were extended for everyone across the board, an additional 400,000 additional jobs could be created in 2011, with home sales rising by an additional 60,000 to 80,000," said Yun. "Of course, there are many factors that could influence job creation, and we also need to be mindful of the very high current budget deficits."
The National Association of REALTORS®, "The Voice for Real Estate," is America's largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.
REALTOR® is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS® and subscribe to its strict Code of Ethics. Not all real estate agents are REALTORS®. All REALTORS® are members of NAR.
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