"By Almost Every Indicator, The Housing Market Is Better Off Than It Was Four Years Ago"
Our guest blogger is John Griffith, a Policy Analyst with the housing team at the Center for American Progress Action Fund.
President Obama is understandably reticent to tout his housing record, especially in swing states hit hard by the five-year foreclosure crisis. But with the early stages of a housing recovery underway, it’s time for the president to look his public in the eye and state a simple fact: the housing market is better off now than it was four years ago.
Nearly every housing indicator supports that claim. Compared to February 2009 — the first full month of the Obama presidency — today’s home sales are up nearly 20 percent, housing construction is up 50 percent, and foreclosure activity is down to a five-year low. Average home prices are down slightly since Obama took office, the only major indicator that’s worse off. But we learned this week that home prices rose in August for the seventh consecutive month after adjusting for seasonal changes.
Improvements in the housing sector tend to drive growth in the broader economy, as each home built creates about three full-time jobs, $90,000 in new tax revenue, and thousands more dollars of spending on home-related products. Obama can credibly say that his housing policies have helped spur growth.
When Obama took office, the housing market was in free fall. Home prices were plummeting, home sales and construction were steadily declining to fractions of historic norms, and foreclosures were rising at a near-record clip. Nearly four years later, we’re seeing a very different trajectory.
To be sure, the foreclosure crisis has lasted much longer than most analysts expected. It’s also no secret that many of the president’s housing programs have fallen well short of their goals.
But Obama’s housing programs have helped millions of homeowners lower their monthly mortgage payments by refinancing or restructuring their home loans and set an industry standard for preventing unnecessary foreclosures. The administration also helped make sure mortgage credit was available to middle-income families throughout the crisis.
When private capital fled, the administration ensured Fannie Mae, Freddie Mac, and the Federal Housing Administration kept the mortgage markets open. It’s no exaggeration to say that without the government’s support very few Americans would have gotten a mortgage over the last four years.
Meanwhile, no one really knows what Republican presidential hopeful Mitt Romney would do to support our nascent housing recovery, other than let the foreclosure process “run its course and hit the bottom.” Romney’s housing plan makes broad statements about ending the housing crisis and reforming the mortgage market, but offers no details on how to actually accomplish any of it.
Last month the Romney campaign claimed that Obama’s housing policies “have put the dream of homeownership needlessly out of reach” and “in many cases … made things worse.” The data tell a very different story.