Housing is still in the doldrums

RadicalModerate | Feb 27, 2013 07:50 PM ET Out here in a midwestern red state, housing is still in the doldrums and will probably stay that way for years. We will soon have a major defense contractor shutting down a plant to the tune of thousands of lost jobs with hundreds of houses thrown on the market or in foreclosure. Every real estate agent I know is trumpeting the mantra that if we don`t buy now we`ll miss out, yet virtually everyone I know can`t get (or is upside down on) a loan or too scared to buy. @sidfeinberg It was that kind of get rich quick mentality that sunk us in the first place, you have learned nothing, and if the rest of the country has the same mentality then they have learned nothing. The "sequester" solution will define this year, you can`t raise taxes and cut spending without pain.

Earth_Scientist | Feb 28, 2013 12:46 AM ET LEAVE THE APPRAISERS ALONE TO DO THEIR JOBS. Threatening the appraisers to raise the prices was one of the biggest causes of the most recent crash. To increase homeownership, one way would be to remove some subsidies: - Set the mortgage interest deduction at no more than the current conforming loan limit of $417k, which is 10x the median income; - Then, cut the conforming loan limit in 1/2 to $208k and the mortgage interest deduction with it, which is still 5x the median income; - Then, cut the conforming loan limit down to $120k and the mortgage interest deduction with it, which is 3x the median income, a level that the median buyer could actually afford to pay back with little risk of mass defaults every 5 or so years. This hinges on the strange real estate%2

Earth_Scientist | Feb 28, 2013 12:47 AM ET This hinges on the strange real estate market behavior that is `whatever the conforming loan limit is becomes the bid`. Also, limiting mortgage deductibility takes advantage of `if you`re rich, you don`t need a mortgage deduction`. We need to treat housing like food and water; you need some of it to stay alive, but don`t spend all of your money on it.






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Housing is still in the doldrums

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