The Obama administration has released a plan to reduce mortgage rates for the middle class, but some analysts are skeptical of how the proposal will affect the financial sector.
The National Association of Realtors released a new report on Wednesday that predicted the rate cuts will disproportionately affect people making under $30,000 a year.
The group’s president, David Kostin, said in a statement that while he’s not a member of the White House, he’s seen the report and thinks the cuts would have a detrimental effect on people making less than $30 million a year.
“The impact will be particularly significant for those with a high income, which is currently about half of the population,” Kostins statement said.
“This group has seen an average annual rate cut of 20 percent for the past five years.”
Kostin’s group, along with the American Bankers Association, said the proposed rates are based on what was already on the books and are not intended to reflect the actual cost of a mortgage.
They also say they’re optimistic that the cuts will be enough to make up for the impact of higher taxes on the wealthy.
The report, released Wednesday, also said that the proposal does not address the mortgage industry’s growing need for credit to service its obligations to its customers.