American Home Buyer Insurance

National bus tour pulls into Gulfport to promote home ownership

Saying home ownership is under attack, national realtors are fighting back. On Monday, they brought their battle plan to south Mississippi.     

The National Association of Realtors says home buyers and sellers are being hit from all sides, from the high cost of insurance to limited access to affordable mortgages. So the organization is hitting the road to raise awareness about the challenges.

The " Home Ownership Matters Bus Tour " rolled into Gulfport Monday morning and parked in front of the Realtor Building on DeBuys Road.        

"We're trying to go to as many places as we can in the United States to tell homeowners that home ownership still matters to them. We recognize that it's still part of the American dream, despite what the economists are saying about the national economy," said Lucien Salvant, a spokesman for the National Association of Realtors.

The organization is trying to rally south Mississippians to convince Congress to help more families get on the road to owning a home.

"We're fighting for the mortgage interest deduction. We're trying to because Congress is looking for ways to pay for the debt and they're looking at cutting out the mortgage interest deduction and we're saying 'No,'" said Salvant.

"That's a huge reason to own a home is you get that tax deduction on your mortgage. If they take that away, then that's going to affect people's desire to own a home," said Cindy Pritchard, President of the Gulf Coast Association of Realtors.

Many South Mississippi realtors say after dealing with a housing slump for years, they've actually seen an up-tick in sales and calls from interested buyers in recent months. They credit the low interest rates, more choices, and better prices.  They say they're worried that any changes to national policy regarding housing could jeopardize that recovery.

What's Next? - first time home buyers

When some people experienced the coldest winter after foreclosure, other people might celebrate Thanksgivings in their first house. What a life!

No matter what, thanks for the government’s first time homebuyer tax credit! The house markets surged in November by a substantial rise of 44% from a year ago, the highest level in nearly three years. Half of them were generated by first-time buyers. Around two million homebuyers have benefited from the tax credit and it is estimated that at least another 2 million will take advantage of the extension of the tax credit till April 30, 2010. Correspondingly, the extension will cost the government another $18 billion based on the spending on the tax credit in 2009.

It seems that such subsidies, at least in a short term, encourage home buyers to jump in the housing market under the potential risk that the depressed economy may continue for a while. Opponents may raise the question, how much impact the tax credit may have on the overall recovery. Apparently, the house market recovery depends not only on stimulus of the temporary demanding but also on the health of the economy at large. With the unemployment rate keeps as high as 10%, even though the tax credit may continue generating skyrocket transactions in the next couple of months, it is hard to predict the “after extension” house market. Another wave of home sales plummet is not impossible with the drain out of the sales in the first half year to catch the advantage of the tax credit, as the homeownership rates remained flat between 1960 and 2002 (Glaeser, 2002). From the homeowners’ view, houses are the largest fixed asset for most average consumers to invest or to hold. Without a stable cash inflow (a stable job plus salary), such fixed asset either needs to be avoided or to be liquidized (foreclosure). In another word, the close interaction of the housing market and job market requires a balanced stimulus to achieve the overall balanced recovery.

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