Tax Reform Versus the Rate of Home Ownership
It was important and appropriate to support the most recent “Calls to Action” regarding the mortgage interest deduction. However, I cannot support the current Call to Action. This is an expenditure of political capital that is ill conceived and taking us down the wrong path. I understand NAR’s concern, but absolutely do not agree that we should continue this fight. It’s now time to accept whatever happens and move on to focus on NAR working with Congress and government to finally improve the rate of homeownership and to find responsible ways to loosen credit for home buyers. That will do far more good than continuing to fight a losing battle. NAR would do well to rethink this particular Call to Action!
The rate of homeownership has steadily declined during the past 12 years and is now at a 50 year low. Meanwhile, credit has steadily tightened the past 8 years under CFPB and congressional legislation to the point where it’s more difficult to have a loan successfully underwritten now in a 4% interest rate market that in 1980 when interest rates where 21%.
The mortgage interest deduction was only marginally meaningful anyway, but far less meaningful if consumers cannot buy homes to begin with. NAR should relegate this to a back burner issue and revisit it when the political landscape is in a better place to embrace it.
Credit tightening by the past 2 administrations and the CFPB
Greater Las Vegas Real Estate Market Overview
October 2017 Single Family Residential (SFR) closed sales were down 12.8% from October and down 4.6% compared to November 2016. Year to date 2017 closed sales are still up nearly 9% over 2016. The median closed sales price of a SFR dipped to $261,400 while the average closed sales price of an SFR dropped to $312,465 which is virtually flat. Residential resale activity cooled only slightly – leaving us with approximately 1.9 months of inventory. Year-to-Date luxury sales closings are have surpassed both 2013 and 2015 sales. Lastly, over pricing is on the rise once again.