Crowe says the NAHB will fight any encroachments on MID and its allowances for home equity loans and second homes, as well. The National Association of Realtors (NAR), a Washington, D.C.-based trade organization representing real estate agents, will fight MID reduction, too. “We’re going to be seeing how all of this plays out, and we’ll be defending the value of MID if that’s an issue that’s on the horizon with regard to the deficit commission and anything else happening on Capitol Hill,” says NAR managing director of research Paul Bishop.
A Precarious Place
Indeed, the stakes are high. Whatever housing policy does or doesn’t make its way out of Capitol Hill could have a major effect on the suddenly volatile (at least for the past 18 months) homeownership rate. Though the number of households has declined by 1.2 million since the Great Recession began two years ago (according to an April study from the Mortgage Bankers Association), there are nearly 78 million Gen Yers either in or entering household formation years (once they find jobs). And securing these “free agents” in the marketplace is as important as ever.
Right now, it looks as though the rental industry is in a good position to capitalize on both the demographic and psychographic shifts toward urban rental housing. “The multifamily side has been a small boat towed behind the big aircraft carrier of single family for a long time,” McIlwain says. “I think it will be a kinder world for rental, but it’s still not going to drive the boat.”
And that’s perfectly OK, Cisneros says. There’s still a strong cultural appeal to homeownership in this country. Which means that people ultimately want something to call their own. In fact, ULI recently released a study saying more than 70 percent of Gen Yers expect to own a home by the time they reach their early 30s. “Americans believe in the American dream,” Cisneros says. “And 80 percent of people still say their definition of the American dream is homeownership.”
