1. With the debt ceiling debate now concluded, NAR looks ahead to three upcoming challenges facing REALTORS®: extending loan limits and flood insurance, both of which are set to expire on Sept. 30., and preserving and protecting the mortgage interest deduction. NAR asks members to meet with their members of Congress to urge substantive action on these three critical issues. Take action now.Take action now While the debt deal contains no direct impact on real estate tax rules or spending provisions and makes no changes to MID, carried interest or any other tax/revenue rule, we’re not out of the woods yet. In fact, new authority has been created that could make it easier for Congress to make tax law changes. The legislation provides very broad dollar targets for overall spending reductions over 10 years, through 2021. The broad categories of reduced spending are defense and some so- called “discretionary” domestic spending. Beyond the target dollar amounts, no specifics are provided. Thus, the various committees of jurisdiction will determine what particular programs will be cut and by what amounts. For a complete analysis of the debt ceiling agreement, click here.here Debt ceiling deal reached, but important issues linger

2. Following the U.S. government’s passage of the debt ceiling legislation last week, Standard & Poor’s (S&P), one of the primary three credit rating agencies, downgraded the long-term sovereign debt of the U.S. to AA+. The other two credit rating agencies, Moody’s and Fitch, have maintained their debt ratings, but Moody’s has its outlook for long-term debt listed as Negative, which means it might downgrade in the next 12-18 months. Fitch is listed as stable for the same debt type. S&P still has a Negative outlook and has stated that it could downgrade the long-term debt of the U.S. again in the next two years if the results from the debt ceiling bill do not come to fruition. It is important to note that these ratings are for the long-term debt only. The short-term debt ratings have remained unchanged. According to many financial analysts, this likely means that long-term interest rates will rise, which includes mortgages. Earlier on Monday, August 8, S&P also downgraded Fannie Mae, Freddie Mac and other lenders backed by the federal government as a result of their “direct reliance on the U.S. government,” S&P said. The credit rating company also downgraded the senior debt of 10 of the nation’s 12 Federal Home Loan Banks, from AAA to AA+ (two of the home loan banks were already rated at AA+). S&P also lowered, by a notch, debt issued by the Farm Credit System, which guarantees agriculture-related loans, the FDIC, which guarantees bank deposits, and the National Credit Union Association, which guarantees credit union deposits. S&P Downgrades U.S./Fannie Mae/Freddie Mac

3. Weekly HAR Market Stat Despite some anxiety on Wall Street [this was prior to S&P’s downgrade], home buyers on Main Street were eager to make their purchases. While the number of signed purchase agreements outpaced last year's levels, seller activity couldn't keep pace. That has drawn down the available housing inventory for sale. In the Houston region, for the week ending July 31: New Listings decreased 16.9% to 2,078 Pending Sales increased 38.7% to 1,505 Closed Sales increased 23.7% to 1,815

4. Register Online at www.har.com/eduwww.har.com/edu Questions? 713-629-1900 ext. 6 Expand Your Knowledge While “Contract”ing It Practical Aspects of Contracts Date: Wednesday, 8/10/11 Time: 9 a.m. – 12 p.m. Location: HAR Central Investment: $25 To provide students with the latest TREC promulgated contracts. Students will review recent changes to the contracts and each section of the contracts will be discussed in light of the issues that are taking place in today's real estate industry.