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Realogy Corporation recently approached the U.S. Department of Treasury with a solution to help stimulate the housing market and lead to a broader economic recovery.

Realogy's proposal calls for a short-term government buy-down of mortgage rates to at least 4.5 percent, or lower, for a 30-year fixed rate mortgage. This homebuyer incentive would apply to the purchase of all new and/or existing homes sold up to $1 million in price. There are a number of ways in which the government ultimately could decide to structure and fund this program, which could be addressed as part of the stimulus packages currently being discussed in Washington.
 
"We think the pent-up consumer demand for housing, if encouraged, is more than sufficient to stabilize housing," says Realogy President and CEO Richard A. Smith. "In our view, substantially lower mortgage rates will stimulate both existing and new home sales, reduce home inventory levels, stabilize home prices and, ultimately, help the overall economy. When home sales increase, housing-related consumer purchasing follows, and we would expect this to help lead our economy to a recovery. We feel strongly mortgage rates must be lowered to stimulate a recovery."