President Obama & Housing

Last week, President Obama met a group of Facebook employees for a town hall meeting in Palo Alto, CA. The WSJ reported on the event and I am taking excerpts from their reporting on the Q & A associated with housing.

“Housing is probably the biggest drag on the economy right now”

The housing crisis will not go away:

“Underwater borrowers aren’t spending much because they’ve lost wealth and job mobility is hindered because people can’t easily sell their homes and move”

“It would be hard for some buyers today because credit had become too easy during the bubble, when many investors took advantage of easy money and rising prices to flip homes for a quick profit.” “We’ve got to strike a balance”

“And what…I’m really concerned about is making sure that the housing market overall recovers enough that it’s not such a huge drag on the economy, because if it isn’t then people will have more confidence, they’ll spend more, more people will get hired, and overall the economy will improve.”

“But I recognize for a lot of folks who want to be first-time homebuyers it’s still tough out there. It’s getting better, in certain area, but in some places, particularly where there was a big housing bubble, it’s not.”

As you all know by now, I am a strong proponent that:      As housing goes…..So goes the economy.
You be the judge on whether his responses provide the proper focus on housing and job creation. I am disappointed that there isn’t a national policy on how to turn the industry around. Declining values doesn’t bother me. After all, if families purchase a home to become part of a community, the values will return. The problem is jobs. People are still losing their jobs and this will cause stress in paying mortgages which could lead to foreclosures and then house values declining again --- we need to stop the vicious cycle.