Ronald Phipps, president of National Association of Realtors, addressing Oklahoma group. (Photo by Jerry Laizure/Norman, Okla., Transcript)

CNHI News Service

NORMAN, Okla. — The home mortgage tax deduction and a sound secondary mortgage market are key to the well-being of the U.S. housing market, according to the head of the National Association of Realtors.

Ronald Phipps, president of the 1.1-million member organization, delivered that message Wednesday to 300 Oklahoma real estate professionals in Norman.

Phipps, a third-generation real estate agent from Warwick, R.I., said he spends much of his time lobbying in Washington, D.C., to protect the home mortgage deduction and working for a sustainable secondary mortgage market.

Phipps said he does not seriously believe Congress will eliminate the home mortgage interest as a tax deduction even though it has been discussed as a way to increase revenue and reduce the national debt.

“We are in times of great challenge,” said Phipps. “We have been through the most bizarre five years in real estate history.”

Real estate is cyclical and housing often is credited with bringing the economy out of a recession but not this time, he said.

Still, said Phills, home ownership remains a tremendous way to build financial stability, noting a home’s value often reflects an owner’s world view.

He said an American family that owns a home has an average net worth of $188,000 whereas a family that rents has a net average worth of $4,600.

“It’s in the national interest to encourage home ownership,” Phipps said.

While interest rates on 30-year home mortgages remain at near-record lows, Phipps said access to loans has been frustrating for many real estate companies.

“If a person has money in the bank, money to put down and for some reason or another has a bad credit score, then let’s analyze it," he said. "Let’s not just throw it out.”

He said tight credit cost the housing industry 770,000 transactions last year alone, a loss of 375,000 jobs. Realtors figure each transaction sustains half a job and affects 80 more.

Phipps said a sustainable replacement is needed for mortgage giants Fannie Mae and Freddie Mac in order for buyers to have predictable mortgage interest rates.

“They (Fannie Mae and Freddie Mac) did terrible things but for 80 years they provided stability in the housing market,” he said.
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Details for this story were provided by the Norman, Okla., Transcript.