Default Would Be Costly for Housing, NAR Says
Washington, DC, Oct. 11, 2013 -- Defaulting on the nation’s federal debt could be disastrous for the U.S. economy and catastrophic for the housing recovery, the National Association of Realtors said in testimony before the Senate Committee on Banking, Housing and Urban Affairs.
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NAR President Gary Thomas called on Congress to raise the debt limit in a timely manner to avoid the consequences of a severe and drawn-out recession that would rapidly erase recent gains in the still young housing recovery.
“A default would be devastating for homeowners whose largest asset would lose value and equity, for home buyers who would see dramatic increases in interest rates and tighter credit standards, and for entire communities that are still grappling from the impact of the financial meltdown,” said Thomas, broker-owner of Evergreen Realty, in Villa Park, Calif.
Thomas said that even a 1 percent increase in mortgage rates could lead to 450,000 fewer home sales and price many middle-class Americans out of the housing market.