Overall, the economic data came in pretty close to expectations this week, and Greece successfully reached a debt deal with private bondholders. With a lack of surprises in the economic news, mortgage rates ended the week nearly unchanged.
Continue reading "Mortgage Market Upda"
It was a volatile week for mortgage rates, reacting to mixed economic data and unexpected comments from Fed Chief Bernanke. The various influences roughly offset each other, though, and mortgage rates ended the week essentially unchanged.
Washington, July 28, 2011
Any changes to the mortgage interest deduction now or in the future could threaten recent progress toward stabilizing the housing market, critically erode home prices and values, destroy middle-class wealth accumulation and hurt economic growth.
That was the message delivered by National Association of Realtors® NAR Chief Economist Lawrence Yun during today’s Rethinking the Mortgage Interest Deduction forum, where he joined a panel of experts to debate the future of the MID. The event was hosted by the Tax Policy Center, a joint venture of the Urban Institute and Brookings Institute, and the Reason Foundation.
“As the leading advocate for housing and homeownership, NAR firmly believes that the mortgage interest deduction is vital to the stability of the American housing market and economy,” said Yun. “The MID facilitates home ownership by reducing the carrying costs of owning a home, and it makes a real difference to hard-working middle-class families.”
Yun argued that now is the worst possible time to discuss changing the tax laws, which could further impair the housing market’s fragile recovery and a broader job market recovery.
“One thing that is indisputable is that eliminating the MID will lower the homeownership rate in the U.S.,” he said. “While we must ensure that the conditions that led to the artificially inflated home ownership rate of the bubble years do not resurface, we also need to create the conditions for sustainable home ownership, which has been shown to provide myriad social benefits for families and communities.”
During the debate, Yun challenged recent proposals calling for changes to the tax code, stating that it’s a misplaced argument to say the MID was a cause of the housing market bubble and is suddenly part of the deficit problem, when it’s been part of the federal tax code for more than 100 years.
Reducing or eliminating the MID is a de facto tax increase on homeowners, who already pay 80 to 90 percent of U.S. federal income tax. Yun said the share could rise to 95 percent if the MID is eliminated.
“Doing away with the MID shouldn’t be thought of as removing a tax break for homeowners, but rather increasing taxes on the middle class,” he said. “Furthermore, housing equity has been a major source of funds for small businesses, and any change to the MID will greatly hamper their ability to create jobs.”
Yun also asserted that it’s a misconception that only the wealthy benefit from the MID, when in reality it benefits primarily middle- and lower income families. Almost two-thirds of those who claim the MID are middle-income earners and 91 percent of people who claim the MID earn less than $200,000 per year.
Other panelists at the Rethinking the Mortgage Interest Deduction forum were Seth Hanton, director of fiscal policy, Center for American Progress; Dean Stansel, adjunct fellow, Reason Foundation; and Eric Toder, institute fellow, Urban Institute, and co-director of the Tax Policy Center. The event was moderated by Edmund Andrews, managing editor for economics, taxes and budget at the National Journal.
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.
With little economic data in the US this week, the focus was on Europe. Some investors were hoping that a more concrete plan to address the region’s issues would be announced during the week, but they were somewhat disappointed. As a result, relatively safer assets saw gains, and mortgage rates ended the week lower.
A highly anticipated EU summit left investors with mixed feelings and produced little reaction in financial markets. On Friday, European leaders announced that at least 23 of the 27 members of the European Union have agreed in principle to tighten their fiscal coordination and to limit budget deficits. The details, which will determine the effectiveness of the plan, are to be worked out in the future. In essence, investors viewed this news as only a small step forward. Continue reading "Mortgage Market Reca"
I’ve always been interested in property, having completed studies in interior design and have had a few lucky purchases when it comes to houses.
I picked up a bargain with my first house, an ex-local authority end terraced place that I purchased for an absolute snip. After the usual updates eg. new kitchen, bathroom and windows etc, I was able to sell it with a profit margin enough for a decent deposit on a beautiful Victorian property that needed a fair bit more work, albeit cosmetic. Continue reading "Lessons Learned When"
