Mark Zandi says the residential real estate industry needs to "give back" to the rest of the economy by supporting a tightening of the tax breaks that have helped home buyers for decades. Such a move, he said, is the most logical way to close a chunk of the government's budget deficit.

If that didn’t work, Zandi also tried to appeal to the industry’s self-interest. He said that housing, as one of the most interest-rate sensitive sectors, should be particularly worried about growing federal deficits, which will push up rates in the long run.