Problems in the housing market are a cause of the downturn as well as a consequence of it.
The biggest disappointment about Barack Obama is how he made health spending the top priority, thus throwing America’s economy off track for jobs to recover after the 2008 financial crisis in housing.
But a bigger disappointment is how aspiring Democratic successors to Obama and Republican frontrunners — including a self-described housing mogul among the media-elite sameness — fail as well to make a priority of addressing the need that individual Americans and economic growth both demand for a more robust supply in affordable housing.
Planning to Fail
Republicans failed to plan for what’s needed most for a robust economic recovery: housing was neglected as an issue on Mitt Romney’s campaign website.
I understand the potential threat to national security that can come by neglecting the cause and consequence of an economic downturn for a middle-class still anchored underwater with mortgage debt worth more than their houses, less flexible to pursue jobs after seeing bailouts of the same corporations Romney describes as people.
For example, an upward inflection in the 100-day simple moving average for Treasury yields related to 30-year mortgages shows how recovery could be thrown off track again.
The Fed further explains:
Six years after aggregate house prices first began to decline, and more than two years after the start of the economic recovery, the housing market remains a significant drag on the U.S. economy. In a typical economic cycle, as the economy turns down households postpone purchases of durable goods such as housing. Once the cycle bottoms out, improving economic prospects and diminishing uncertainty usually help unleash this pent-up demand. This upward demand pressure is often augmented by lower interest rates, to which housing demand is typically quite responsive.
Housing Foundation for Growth
I will recommend fiscal policy necessary and expedient to solve problems in the housing market through 4% growth in the economy.
We can’t afford more time without a president with a plan for a housing market most likely to guarantee robust a economic recovery.
John M. Collins, Military Strategy (Washington: Brassey’s, 2002).
Kathleen C. Engel and Patricia A. McCoy, The Subprime Virus: Reckless Credit, Regulatory Failure, and Next Steps (Oxford: Oxford University Press, 2011).
Financial Crisis Inquiry Commission, The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States, Authorized ed. (New York: Public Affairs, 2011).
Kathleen Madigan, “Home-Price Growth Moderates, but Affordability Still Faces Headwinds,” The Wall Street Journal, April 1, 2015, A2.
Roy T. Meyers, ed., Handbook of Government Budgeting (San Francisco: Jossey-Bass, 1999).
Mitt Romney, “Issues,” accessed April 23, 2012, http://www.mittromney.com/issues
Jeffrey Sparshott, “Rising Rents Outpace Wages in Wide Swaths of the U.S.,” The Wall Street Journal, July 29, 2015, A3.