‘Hope for Homeowners’ will help many Inland Northwest families

Due to the current financial climate, most families in the past week have hastened to carefully re-evaluate their investment portfolio, and are asking, “where is it best to invest?” Everyone is looking for reassurance, but don’t let fear paralyze you in today’s economy. The value of the long-term investment in your home is a solid one.

Relentless media reports of a vast market decline may be deceiving when considering the long-term outlook for our region’s homeowners. While year-to-year fluctuations are normal, real estate remains one of the best performing and most consistent long-range investment choices. Median existing U.S. home sale prices have increased on average, 6.5 percent each year from 1972 through 2005, and 88.5 percent over the last 10 years combined. For consumers looking for long-term and stable growth rates, real estate is still their No. 1 choice.

REALTORS® will counsel that housing is not a quick-in, quick-out investment, but when purchased for the longterm, housing is one of the safest investments consumers can make. In addition to the savings accumulated through a buildup of equity and tax advantages, a home provides shelter. No paper investment provides this benefit.

Homeownership is how many American families begin to accumulate wealth. According to data from the Federal Reserve Board, a homeowner’s net worth is 46 times that of a renter’s. Buying a home should be approached as a good long-term investment, providing both equity accumulation and tax benefits over time.

Dollar for dollar, the rate of return on an individual’s cash downpayment on a house is substantial. Buyers typically use their own money to cover only a small portion of the purchase price, but the home appreciation they realize is based on the total value of the property.

Homeowners benefit from the power of leverage. Over 10 years, a $10,000 investment in the stock market at a normal 10-percent market rate of return would yield $23,600. The same investment as a down payment on a $200,000 home at a normal appreciation rate of 5 percent would return nearly 5 times the stock market return, at $110,300.

Homeownership offers immediate benefits and long-term value. Homeowners accumulate wealth for the future while enjoying the benefits of a shelter that they can use, improve and sell. Throughout our region, homeownership is the cornerstone of a healthy community and the basis for positive community involvement.

At this time, I also share with you a statement by National Association of REALTORS® President Richard F. Gaylord:

“The National Association of REALTORS®, on behalf of its 1.2 million members, commends U.S. Department of Housing and Urban Development Secretary Steve Preston and the entire oversight board for quickly implementing the ‘Hope for Homeowners’ program, which became effective Oct. 1, 2008.”

Program facts can be found at www.hud.gov/fha/home080730.cfm. This program will, in many cases, permit families to refinance into safer, more affordable mortgages, helping those families seeking to avoid a devastating foreclosure. Hope for Homeowners will significantly contribute to stabilizing local home prices across the country. The program also protects the investment of the government and taxpayers by allowing them to share in the homeowner’s equity and appreciation.

Careful implementation of the program will ensure lender participation while protecting the FHA fund. We appreciate HUD for reaching out to government agencies, lenders, and other interested parties before implementing the program. REALTORS® work to build communities, and by participating in this program, we can do our part to help many families keep their piece of the American dream.”