AGNES T. CRANE WRITES A GREAT COLUMN ABOUT HOUSING MARKET MYTHS. SHE LISTS EIGHT:
Myth 1: Significant reform will kill the housing market.
Many fear any major overhaul of U.S. housing finance will slam a still tottering housing market. If America scraps its current system tomorrow, that’s what will happen. At a minimum, removing the government subsidy should nudge mortgage interest rates higher, potentially knocking home prices down further. But the UK took more than a decade to phase out tax deductions on mortgage interest. Homeowners, would-be homeowners and mortgage lenders can adapt to even a potentially wrenching change if there’s a five or 10-year transition period. The United States needs to get started on a plan.