USA Today gives readers the tragic story of Robert Westover, a homeowner who is desperately hoping to be able to sell his ocean view vacation home for a profit of just $265,000 (approximately $175,000 after adjusting for inflation). This intended profit is equal to more than five times the median worker's annual pay and more than 30 times the average annual TANF payment to a family. Fortunately, there is hope for people like Mr. Westover. The National Association of Realtors is pushing to have the government provide subsidies for purchasing such high end homes by guaranteeing even very large mortgage loans. (The current limit is between $417,000 and $730,000, depending on the area.) If the guarantee lowers the interest burden by 1.5 percentage point, then the government would effectively be handing $15,000 a year to someone who takes out a $1 million mortgage.
--Dean Baker
