We came back from the NAR Mid-Year meeting feeling a bit tossed around.
The housing market will not recover, and therefore the economy will not recover, until all creditworthy homebuyers can get a mortgage. For example, we don’t need to get rid of Fannie Mae and Freddie Mac. We need to go to this time back before they got so loose. The pendulum has swung too far. Making it too hard to get loans won’t help the economy.
Lawrence Yun, chief economist at NAR, said sales would rise 15-20 percent if FHA and Fannie and Freddie would return to normal lending standards.
We heard a lot of talk about requiring all buyers to put 20 percent down to buy a home. We all understand the value of buyers making a down payment. But that is no way to encourage home ownership. The crowd burst into applause when one speaker called that idea “lunacy.” Mr. Yun referred to such proposals as an attack on the middle class. He also calculated that, using average prices and salaries, it would take a buyer 14 years to save for a 20 percent down payment.
We all know that not everyone should be a homeowner. We also know that homeownership creates lots of benefits, including more education, less crime and better health. We also know lots of people who could and should be able to buy a home right now but are finding it very hard.
The meetings were not totally political. A recent NAR survey gives us some good information:
- Buyers may start with an Internet search for properties, but they are relying on their agent more and more in the process.
- Referrals really do matter when selecting an agent. People don’t interview several agents: 64% of buyers contacted one agent. If they call you, they will use you. Good to know!
- Sellers are using agents more and more frequently. As the NAR researcher said, “You can’t FSBO in this market.”
I came back to Sacramento with more respect than ever for the efforts of NAR and all those REALTORS® who volunteer to help educate elected officials and carry the REALTOR® message.
We know how important home ownership is. We need to make sure other people know that, too.