Housing Market Outlook: Realtors Come Out Swinging
AOL Real Estate:Let's start with the current state of the housing market. Can things get any worse?
Phipps: Politics and real estate are similar inasmuch as both are local. The answer to 'what's the state of the housing market' depends on where you live. The majority of markets -- the vast majority -- are getting better. It's just been slower in some places. In six of the last eight recessions, housing has led the way for our nation out of the challenged economic conditions. We have not been taking the lead on it this time, but we do expect to.
Q. What is the biggest lesson we should have learned from this recession as it relates to housing?
A. Homeownership must be sustainable. That means people need to be financially able to support homeownership. Some people just need to rent. In 78 of 100 metro areas, it is now more expensive to rent than own. For those who are able, homeownership is a better option, but they have to be able to afford it.
Q. Would it be so terrible if we became a nation of renters?
A. Homeownership is good for this country if you believe in self-reliance. The average family that owns a house -- even after market correction -- has a family net worth of $180,000. The average family that rents has net worth of $4,600. There is a huge delta between owning and renting.
Q. What are the biggest obstacles to jump-starting home sales?
A. The pendulum has swung too far in mortgage qualification standards, and they need to loosen. Five years ago, all you needed to get a loan was a pulse. Today, it's just too difficult. Even credit-worthy people are having a hard time. The other big obstacle is that buyers are anxious about whether home values have stabilized or could still fall in their areas. Our campaign encourages buyers to work with a skilled local Realtor who knows the market and can advise them.
Q.We've been noticing a lot of NAR ads on TV lately. What's the big push for?
A. Our Homeownership Matters campaign targets two main groups: the public and public policy makers. The campaign basically celebrates the attributes of sustainable homeownership. We have the national TV ads [see the example below], and a national bus tour where we hold rallies and educational sessions, teaming up with local partnerships.
Q.There has been a lot in the news about various political efforts that would undercut the value of homeownership. Is what the Homeownership Matters campaign is hoping to address?
A. Yes. There are three fundamentals that we want to address with policymakers.
One, protecting mortgage interest deductions. The mortgage interest deduction isn't just for the wealthy. Sixty-five percent of those who take it have a family income of under $100,000 and 91 percent earn less than $200,000 a year. It's primarily a benefit for middle- and lower-income families.
Two, create a successor to Fannie Mae and Freddie Mac. There needs to be a government guarantee to mortgage-backed securities.
Three, to make sure that buyers don't need 20 percent down. Under the QRM [qualifying residential mortgage], 39 percent of the people who got loans last year wouldn't qualify today.
These AOL Real Estateguides can help, whether you're in the market to buy, rent or sell:
- How to Shop for Your First Home
- Tips for Finding a Rental Apartment
- How to Price a Home to Sell Fast
- Vacation Homes: Is Now the Time to Buy?
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