The National Association of Realtors (NAR) has been pushing for several things to help the stalled housing markets. And it appears they have had some success.
Here are the highlights:
1. The loan limits will be raised to $727,000 in high cost areas, such as Aspen, Vail, Steamboat and Silverthorne.
2. The tax credit will be raised to $8,000 with NO payback (a true credit, compared with the old $7,500 credit that had to be paid back in increased taxes of $500 per year in years two through 16).
3. Interest rates have come down 125-150 basis points.
4. The bill has $75 billion in it for foreclosure mitigation
5. The bill drives down interest rates by buying another $200-300 billion of mortgage paper from Fannie Mae and Freddie Mac thereby freeing them up to do the same with new mortgages.
They were also able to preserve the mortgage interest deductibility, real estate tax deductibility, and the $250,000/$500,000 cap gains exclusion (an overall package worth more than $100 billion and for some a very attractive funding source for their pet projects).
Maybe this will unclog the pipeline and get some capital flowing into housing again.
What do you think? Will this help, or should the government have let the chips fall where they may and trust the market to recuperate?
–Editor’s note: Tom Harris is the principal of Colorado Lifestyle Real Estate, which connects second home buyers and sellers with the top Realtors in Colorado resort towns. He will be blogging about Colorado’s real estate market for CH&L each week.
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Our country was built on the belief of free enterprise and capitalism. It seems to me that we should let companies fail or succeed on their own
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