The Real Estate Bloggers

White House Continues Press For Elimination of Mortgage Interest Deduction
MULTIFAMILY BUILDERS LESS PESSIMISTIC
Could Student Loans Be Hurting the Housing Market?

White House Continues Press For Elimination of Mortgage Interest Deduction

Posted: 10 Jun 2010 12:34 PM PDT

Whitehouse_front To my real estate friends; agents, brokers, homeowners, et al., this is a serious threat to an industry that is just now trying to get it’s feet underneath it.

The White House and Congress see the 100 billion dollars a year that goes to homeowners and want to spend it on their own projects. They have realized they are spending way to much money and the deficits are growing out of control.

How out of control? Let’s talk nearly 20 trillion dollars in debt by 2015.

Now they are not going to stop spending. Spending means power in Washington, so instead they are doubling down. Taxes are going up, tax breaks are being removed, and every possible revenue source is being examined.

This includes the Mortgage Interest Deduction for Homeowners.

We need to keep an eye on Congress and the White House. They know they are in trouble and could lose control of the process by January. If this is the case, they may push through a host of changes to our tax code in the coming months.

The popular tax break for mortgage interest, once considered untouchable, is falling under the scrutiny of policymakers and economic experts seeking ways to close huge deficits.

Although Congress last year rejected the White House’s proposed cut to the amount wealthier taxpayers can deduct for home mortgage interest payments, the administration included it again in its 2010 budget — saying it could save $208 billion over the next decade.

And now that sentiment has turned against all the federal red ink — and cost-cutting is in vogue — Democrats on President Barack Obama’s financial commission are considering the wisdom of permanent tax breaks such as the mortgage deduction and corporate deferral. Calling them “tax entitlements,” senior Democratic lawmakers have argued they should be on the table for reform just like traditional entitlement programs Medicare, Social Security and Medicaid. … via The Hill

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White House Continues Press For Elimination of Mortgage Interest Deduction

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MULTIFAMILY BUILDERS LESS PESSIMISTIC

Posted: 10 Jun 2010 07:43 AM PDT

This has to be the headline of the day.

MULTIFAMILY BUILDERS LESS PESSIMISTIC
Survey Indicates Downward Trends in Occupancy and Supply Slowing

Washington, June 10 -The multifamily market showed signs of moving back toward stability in the first quarter of 2010, according to the latest NAHB’s Multifamily Market Index (MMI). The current production index for market-rent apartments jumped to 30.6, 14 points higher than a year earlier, while future demand expectations for Class A apartments rose to 49.6 from 34 and for Class B to 53.1 from 43.9. For lower-rent units and for-sale condominiums, the current production indexes rose to 38.2 and 25.0, respectively, more than 10 points higher than in the first quarter of 2009.

The MMI measures multifamily builder sentiment based on production and occupancy at the current time–using a scale of stronger, the same, or weaker compared to the previous quarter–as well as builders’ expectations for conditions over the next six months. An index number greater than 50 indicates that the number of builders who view conditions as getting stronger outnumber the number who view conditions as becoming weaker. The values are not seasonally adjusted…

Press Release via email from NAHB

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MULTIFAMILY BUILDERS LESS PESSIMISTIC

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Could Student Loans Be Hurting the Housing Market?

Posted: 10 Jun 2010 07:01 AM PDT

Money_down_the_drain As we live in midst of the housing bubble the education industry is getting close to entering their own bubble. For the past 20 years banks have been lending to almost any student on the hope that they will be paid back on future earnings. College tuitions have been rising just as fast with the inflow of borrowed money lent without much analysis.

Those future payments are sucking the life out of future graduates.

And most likely keeping them from entering the housing market.

Think about it. You go to a good school and come out with a big chunk of student loan debt. This is debt that you can not get rid of without paying it off. There is no discharging it in bankruptcy or by foreclosure, you have to pay it back.

So instead of saving for a home, college young graduates are now digging out from under the mountain of debt that paid the way for them to get ahead, or at least be in the game.

And when they meet that someone special, odds are that person is also under a pile of student loans themselves.

We wonder why 1^st time homebuyers are unable to save up for a downpayment, yet 1^st time homebuyers are paying for the inflation of a college education. The have been told that to get ahead you need a degree. Now that degree has become seriously overpriced.

A bubble economy in college education. Only this time the banks are protected.

Future real estate homebuyers are not saving for a home anymore. They have been in debt since finishing college. They have not saved like their parents and grandparents did. They have just worked down debt.

And then when it comes time to buy a home, they go the 3.5% FHA route, instead of the 20% down route of past generations.

They have no choice, and because of that, no safety net when things go sour.

So as you drive by the Ivy covered walls of the local university, sneer at them, they are your competition for homebuyers.

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

Could Student Loans Be Hurting the Housing Market?