This news release from the California Association of Realtors (CAR) expresses CAR’s strong support for continuation of the Mortgage Interest Deduction. CAR President Beth L. Peerce said:
“A reduced government presence in the mortgage market will raise the cost of homeownership and make mortgages less available. Moreover, Congress needs to understand that during economic downturns, the housing market needs government involvement to ensure capital stability. History has shown the private market is incapable and unwilling to step in during the hardest of times and meet the demands of the nation’s home buyers.”
The article also goes on to discuss the “upper loan limit” for “conforming loans” (non-Jumbo) which has been set at $729,750 for the past couple of years. This is important because of our high property values — if only a jumbo loan can be obtained for a property, the rates are higher and thus the pool of buyers is smaller. CAR estimated that at least 10 percent of our South Bay homes would be unable to obtain an FHA loan or a GSE (Fannie/Freddie) loan if the upper limit is reduced back to the proposed $625,500.
If you are at all politically involved, this would be a good thing to send an email to your representative and our two state Senators on; by allowing this loan limit to stay at $729,750, that will help buyers, sellers AND those who are staying in their current homes, because if the real estate market softens any more, we all get hurt.