A small section of the President's budget proposal that was announced today has the potential to become a major problem to a recovery in real estate markets in the upper price levels in my opinion. According to the plan, the amount of mortgage interest deductibility on families earning over $250,000 is reduced.
I believe that would result in home values dropping significantly. Many people will think that it's okay because it's just for the people that earn over $250,000m but I feel strongly that this could cause more problems in our economy than it resolves.
Also, think about inflation! Economists are expecting inflation and higher interest rates due to to the huge national debt. Sooner or later, we will all be in the range of $250,000 income or above. This does effect every single one of us in this country. In my opinion, this will basically abolish future tax write-offs on home ownership for mortgage interest for our grandchildren and great-grandchildren.
We cannot allow this to happen! Mortgage interest tax write-offs have protected the American dream of home ownership and should continue to do so for every American forever! This should be our right even if we do work harder and make more money!
The $8,000 tax credit, however, I would say should help the real estate market recover. Yesterday one of my buyers made an offer on a home due to the $8,000 tax credit in the stimulus package. The buyer met the criteria to receive the $8,000 and cancelled her rent agreement and decided to purchase a home which is what she really wanted to do anyway. The incentive gave her the courage to jump off the fence!
According to local loan officer, Tim Prindle, at MGM mortgage, if a buyer owes $4,000 in income taxes, he should get a $4,000 refund. Wow! Is that an incentive or what! Tim said that the buyer must have not owned a home within the last 3 years and must purchase a home before December 1, 2009. He said that if the buyer lives in the home for at least 3 years, the $8,000 does not have to be paid back. There are limits to the income, but they are reasonable and certainly not poverty level. That is the latest information I've received on the $8,000 credit incentive.
With interest rates at the lowest in 37 years, and with a huge inventory of bargains, foreclosures and short sales, I would think there is enough incentive here to sway buyers to do what they wanted to do anyway! That is to own their own home! Please check out the MLS on my website at www.homesincedarcity.com and then email Janet's team at naisbitt@inxsnet.com for help with all your real estate needs. We can help with every home no matter which office has the listing thanks to our MLS service. We look forward to hearing from you! If you prefer the phone, please call 435-865-1019 or 800-934-3742 or text or call my cell phone at 435-559-7772.
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