November 30, 2011
APEX HOME LOANS CEO CRAIG STRENT ADDRESSES HOUSING & MORTGAGE MARKET
RAMIFICATIONS OF SUPERCOMMITTEE FAILURE & SEQUESTRATION
Washington, DC – Apex Home Loans CEO today participated on a panel convened by the Greater Washington Board of Trade to address the possible ramifications of Super Committee failure and Sequestration. Mr Strent was asked to speak specifically to possible tax code changes related to the Mortgage Interest Deduction (MID) that might come out of a budget deal ahead of automatic cuts taking place through Sequestration starting Jan 1, 2013. Citing a report from the Tax Policy Center, Strent indicated a phasing out of the MID at the upper income levels could have anywhere from a 9-20% negative impact on housing prices nationally. “He assuaged concerns in the room with regard to the local market and referenced a recent George Mason University study projecting a continued surge in job seekers to greater Washington for the indefinite future, referencing specific cuts to the Federal budget under Sequester and the fact that they may not have significant impact regionally. “Jobs drive the housing market and to the extent that we have continued job growth regionally, the housing market continues to remain stable with long term growth prospects as demand outpaces supply,” said Strent.
Strent went on to indicate that recent loan limit adjustments from $ 729,750 to $ 625,500 have a direct impact on Greater Washington given the average income of our region and may further erode housing prices at specific price points where the higher loan limits were needed to provide lower down payment financing options, though a recent decision to allow FHA loans to the previous limit of $ 729,750 will soften the blow.
With regard to expiring tax cuts at the end of FY 12, Strent again cited a Tax Policy Center report and indicated that if the Mortgage Interest Deduction were to be preserved, but the current tax rates were to expire, resulting in higher tax rates at the upper income levels, this could place upward pressure on home prices in Greater Washington as the MID would become even more valuable as a tax shield to higher income earners.
November 30, 2011
APEX HOME LOANS CEO CRAIG STRENT ADDRESSES HOUSING & MORTGAGE MARKET
RAMIFICATIONS OF SUPERCOMMITTEE FAILURE & SEQUESTRATION
Washington, DC – Apex Home Loans CEO today participated on a panel convened by the Greater Washington Board of Trade to address the possible ramifications of Super Committee failure and Sequestration. Mr Strent was asked to speak specifically to possible tax code changes related to the Mortgage Interest Deduction (MID) that might come out of a budget deal ahead of automatic cuts taking place through Sequestration starting Jan 1, 2013. Citing a report from the Tax Policy Center, Strent indicated a phasing out of the MID at the upper income levels could have anywhere from a 9-20% negative impact on housing prices nationally. “He assuaged concerns in the room with regard to the local market and referenced a recent George Mason University study projecting a continued surge in job seekers to greater Washington for the indefinite future, referencing specific cuts to the Federal budget under Sequester and the fact that they may not have significant impact regionally. “Jobs drive the housing market and to the extent that we have continued job growth regionally, the housing market continues to remain stable with long term growth prospects as demand outpaces supply,” said Strent.
Strent went on to indicate that recent loan limit adjustments from $ 729,750 to $ 625,500 have a direct impact on Greater Washington given the average income of our region and may further erode housing prices at specific price points where the higher loan limits were needed to provide lower down payment financing options, though a recent decision to allow FHA loans to the previous limit of $ 729,750 will soften the blow.
With regard to expiring tax cuts at the end of FY 12, Strent again cited a Tax Policy Center report and indicated that if the Mortgage Interest Deduction were to be preserved, but the current tax rates were to expire, resulting in higher tax rates at the upper income levels, this could place upward pressure on home prices in Greater Washington as the MID would become even more valuable as a tax shield to higher income earners.