The article titled, “Social Security dollars could fuel another real estate boom,” offers some intriguing opportunities to all of us who would like to see the outcome of the Social Security debate stimulate the growth in home ownership in the United States. After all, the single biggest source of retirement savings for most homeowners is the equity they have built up in their home. If you make it possible for more people to become homeowners and for young people to buy a home sooner than they can today, their home equity growth will start sooner and grow larger. Our nation’s aggregate retirement savings will be larger.
But how could changes that would make that happen come out of the Social Security debate as it is currently being framed? While the debate over the president’s Personal Retirement Account concept will be extremely contentious, Democrats and Republicans alike agree on the underlying fact that we need to stimulate more savings for retirement. The president’s proposal is likely to be modified, but even its critics who want keep the current Social Security program and address its looming funding shortfall by other means support other efforts to stimulate more savings for retirement.
If consumers and professionals in the real estate sector work together we can introduce into the debate the advantage of increasing home ownership as one of the most cost effective tools our nation could use to increase retirement savings. Proposals that would make it easier to buy a home, and enable young people to buy sooner than they are able to now would have a huge positive influence on savings for retirement.
There are many excellent proposals that could help achieve that objective. They include such ideas as affordable housing tax credits, home down-payment IRAs, allowing investments by retirement plans in principal residences of children and grandchildren who are buying their first home, strengthening housing programs that help qualified low-income families accumulate a down payment, and many more.
Whether we support the president’s Social Security approach or not we should all urge legislators to include in their package incentives that will expand U.S. home ownership. There is no more cost effective tool to increase retirement savings than owning a home.
Chris Christensen is the vice president of public affairs for the American Homeowners Grassroots Alliance, a national bipartisan advocacy group representing the nation’s 70 million homeowners.
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