Congress and the administration must address key policy issues in order to facilitate a healthy real estate market that serves current and future homeowners and drives the national economy forward, the National Association of Realtors told the U.S. Senate Banking Subcommittee on Housing on Monday.
“The housing market hasn’t been this unwelcoming to first-time buyers since 1987,” said 2014 NAR Conventional Finance and Lending Committee Chair Mabel Guzman, broker for AT-Properties in Chicago. “Tight credit, high fees and low inventory have combined to make it prohibitively expensive for millions of responsible, creditworthy prospective buyers to own a home. If this is the direction that the housing market is taking, we’re headed down the wrong path.”
While home prices and sales, as well as household wealth, are all up from a year ago, constrained access to mortgage credit for minorities, young buyers, and low-and moderate-income earners remains a serious problem, Realtors argue.
NAR says that restrictive pricing policies at the Federal Housing Administration and the Federal Housing Finance Agency continue to disparately impact individuals with shorter credit histories and lower down payments, making it harder for them to buy a home.
If this has a familiar ring to it, there's a reason.
NAR estimates that in 2013, nearly 400,000 creditworthy borrowers were priced out of the housing market because of high FHA insurance premiums.
NAR says it supports developing policies that will provide potential buyers with access to more flexible and affordable financing opportunities and a wider choice of approved condo developments.
NAR also called on Congress to offer permanent help for those who short sold in 2014.
“Most urgently, Congress should take action to help all of the distressed homeowners who completed short sales in 2014 by passing the Mortgage Forgiveness Tax Relief Act. This bipartisan legislation will extend an expired provision that has helped millions of distressed American families by allowing tax relief for homeowners when lenders forgive some portion of the mortgage debt they owe,” said Guzman. “If this provision is not extended, hundreds of thousands of American families who did the right thing by short selling their home will have to pay income tax on ‘phantom income.’”