National Association of Realtors® Warns Congress: Default Could Severely Impact Housing
published on October 14, 2013
National Association of Realtors® President Gary Thomas testified before the Senate Committee on Banking, Housing and Urban Affairs, cautioning that defaulting on federal debt could be disastrous for the U.S. economy and catastrophic for the housing recovery.
“A default would be devastating for homeowners whose largest asset would lose value and equity, for home buyers who would see dramatic increases in interest rates and tighter credit standards, and for entire communities that are still grappling from the impact of the financial meltdown,” voiced Thomas.
Just a 1% increase in mortgage rates, he warned, could price many middle-class Americans out of the housing market and lead to 450,000 fewer home sales. Take, for example, a buyer considering a home in Sendera. For a borrower taking out a $200,000 mortgage, a 1-point increase in interest rates would raise the monthly mortgage payment by 10%.
During his testimony before the Senate Committee, Thomas recounted significant financial market disruptions resulting from the 2011 debt ceiling impasse, which led to slower job growth and reduced business and consumer confidence.
“As the leading advocate for housing issues, NAR is committed to protecting the value of homeownership from the avoidable and substantial harm that would be inflicted by Congress’s inaction to avert a default,” he said.
Thomas called on Congress to keep the economy on its healthy path to recovery by raising the debt limit. Doing so in a timely manner, he said, could avoid the consequence of a severe and drawn-out recession at a time when the housing market is only beginning to recover.
The REALTORS® at Regent Property Group support protecting homeownership and helping Austin-area buyers stay on top of the latest in market trends. Interested in a home on Lake Austin? From Rob Roy homes to homes in Westlake, consider Regent.
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