President Obama’s jobs speech
We recently reported on rumors that Obama believes housing to be a “high priority” with White House aides alluding that his jobs speech would mention housing, but did housing get lost in the fray as many feared it would?
Out of over 4,000 words in the President’s speech, this is the only portion devoted to real estate:
“And to help responsible homeowners, we’re going to work with federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4 percent. That’s a step — I know you guys must be for this, because that’s a step that can put more than $2,000 a year in a family’s pocket, and give a lift to an economy still burdened by the drop in housing prices.”
Housing as a high priority?
The aides had alluded that Obama would promote the idea of refinancing loans, which Obama did stick to, and although it was a jobs speech, most believe that it fell short of proving housing to be a “high priority” given how interconnected it is to employment.
Bob Nielsen, chairman of the National Association of Home Builders (NAHB) said, “While the nation’s home builders commend President Obama for tackling critical employment issues, it’s discouraging that the Administration still fails to recognize that housing has a central role to play in restoring the nation’s workforce. In normal times, housing accounts for 18 percent of the nation’s gross domestic product, and nothing packs a bigger local economic impact than home building. Constructing 100 average single-family homes generates more than 300 full-time jobs, $23.1 million in wage and business income and $8.9 million in federal, state and local tax revenue.”
Visual breakdown of address:
Broken down visually according to the number of times each word was used, the address puts jobs front and center as it should have (given that it was a jobs speech), but housing is not an obvious priority as some had hoped the speech would reflect:
Click to enlarge.
Construction references
Various references to construction were made during the address, but the context was typically that of road construction workers, not housing construction.
Nielsen noted, “Housing has traditionally led the nation out of past recessions and needs to be playing a far bigger role than it has so far in today’s lackluster recovery. That won’t happen until federal regulators move to end the credit freeze for new home production, banks allow qualified home buyers access to affordable home loans and policymakers acknowledge there is a clear need to support homeownership and get housing moving again to spur growth, create jobs and restore consumer confidence.”
Supporters note that the President has a lot on his plate and effectively addressed his way forward for jobs, even noting his goals of helping startups while critics call it a stump speech. Either way, aides were correct in alluding to a mention of refinancing, but incorrect that the address could support that housing is a priority for the administration.
Manhattan Beach Realtor
September 16, 2011 at 9:59 am
One of the major factors leading to the real estate bust was that housing WAS A PRIORITY for politicians. Since housing touches such a large extent of the population, it's the simplest way for politicians to "buy" votes; just profess that you'll do something that will increase your voting constituents' home prices and you're a shoe-in for office!
After so many decades of over-capitalization of housing via preferential legislative and loose monetary policies, it would behoove policymakers to reverse the mistakes of the past, and leave housing to the free market. Let home prices reflect economic realities-no subsidizing debt over equity with income write-offs, no support for GSE's like Fannie and Freddie, and no HUD promoting homeownership for everyone. These are tough things for the public to swallow, but we'll all be better off in the long run if capital is allocated according to reality, not political expediency.