Obama: Housing Essential to Economic Stability

President Barack Obama sits with Zillow CEO Spencer Rascoff during an online forum to answer consumers' questions about housing.

President Barack Obama sits with Zillow CEO Spencer Rascoff during an online forum to answer consumers’ questions about housing.

President Barack Obama reiterated his view that a recovering housing market is essential to an improving U.S. economy in an online forum Wednesday where consumers grilled the president on his housing plans.

“Homeownership is a quintessential element of the American dream,” Obama said. “Keeping the overall economy moving in the right direction means that there’s a stronger market for homes.”

The 30-minute event, moderated by Zillow CEO Spencer Rascoff, was live-streamed on the White House’s Web site. Zillow fielded housing questions from consumers ahead of time via social media and selected a handful to present to Obama at the forum.

The questions covered topics such as the Home Affordable Refinance Program, Fannie Mae and Freddie Mac, home affordability, and the effects of student loan debt on housing.

Rascoff said about 10 percent of the thousands of questions Zillow received were about HARP, the government program that allows underwater homeowners to refinance their mortgages. The Obama Administration is trying to expand HARP to help more struggling homeowners. Congress is currently weighing the next iteration of the program, known as HARP 3.0, which would qualify non-government-backed loans for refinancing.

NAR has supported HARP in the past.

“There shouldn’t be an ideological barrier to getting this done,” Obama said, referencing HARP 3.0 and reforms to mortgage giants Fannie Mae and Freddie Mac. “I have hope for them.” He said that he hopes the measures pass by the end of the year.

On Fannie and Freddie, Obama said he is aiming to reduce their portfolio of loans. His long-term goal is to have the private market “get in there and provide those loans, and have the government step in to make sure that homes that are not too upscale are available for young families, for veterans, for folks who may have some limited means,” he said. “We’re confident that the private market can step in and do a good job.”

NAR has long called for replacing Fannie and Freddie while ensuring continued mortgage market liquidity through the maintenance of an explicit federal presence in the market.

Another theme that surfaced during the online forum was affordable rentals. When one young man asked the president how he would be able to afford a mortgage while strapped with a massive amount of student loan debt, Obama suggested that more Americans should consider renting a viable option.

“All of us, long-term, have the aspiration of owning a home of our own,” Obama said. However, “[renting] is not something that people should shy away from … that renting is the best option until you can purchase safely and soundly.”

He said that he is putting forth initiatives to get more affordable rental housing on the market to service those who can’t qualify for a mortgage yet. He also said he is focused on driving down college debt.

Obama talked mainly about what his administration has done thus far to help homeowners, and he hit some talking points from his housing-policy speech in Phoenix on Tuesday. He did not offer any new policies during Wednesday’s forum.

Graham Wood

Graham Wood is a senior editor for REALTOR® Magazine. He can be reached at gwood@realtors.org.

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  1. Nobody ague that housing is essential to the US economy, but why then mortgage financing is in such decline especially in Florida when most of the potential borrowers are being declined of obtaining financing regardless of their credit and employment history. Most of the banks are pretty much willing to borrow money but federal regulators wouldn’t allow them to do it. These post-recession rules should be re-considered and adjusted to nowadays market demands. There’s the situation here in Florida when most of the condo and house purchases are 100% cash and sellers are not expecting to sell otherwise because they don’t believe that potential buyers would secure finance. With inventory declining and prices rising even cash buyers fill frustrated that they can find property that match the value of their money!

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  2. Why has the NAR long called for eliminating Fannie and Freddie, and what role do they want the government to have in the mortgage market if not insuring loans?

  3. Housing and Jobs are essential for American Growth. Purchasing a primary home is the American dream. Fair lending is required for that to take place. We are still fighting our way out of unfair lending and bank misrepresentations. Great progress has been made and finding a REALTOR who is an expert in the housing sector anyone is interested in will make a more informative buying experience. With as many displaced homeowners and unemployed investing in real estate for rental purposes is lucrative and helpful to the overall economy, and should be encouraged. Again an expert REALTOR is needed to navigate the upside and downside of the residential and commercial rental business. There is a lot of unrest in the Arab nations, many African nations, and economic problems in many western countries so American Real Estate is looking very attractive again on the world stage. Key for our growth is re-training education, keeping up with technology in all sectors, and work towards the future instead of being stuck in the past. We need affordable health care and the legislators better find a way to cut my payments and everyone else’s in more than half!. There are many organizations the the government can turn to labor unions, trade organizations such as REALTORS, Lawyers, doctors, legislators, professionals, etc that can be added to the pool to get costs down.