The ongoing housing crisis remains one of the biggest drags on our economic recovery. But less than three months before a presidential election viewed by many as a referendum on the economy, housing is little more than a side conversation on the campaign trail.
President Barack Obama has barely mentioned housing in recent months, aside from occasional pitches for reforms to help more homeowners refinance. Presumptive Republican nominee Mitt Romney’s 59-point economic plan unveiled last year makes only a couple of passing references to housing, and Gov. Romney is yet to release any substantive housing proposals since.
As our presidential hopefuls stay silent, the sluggish housing market continues to plague our economy. The historic decline in home prices since 2006 has cost Americans more than $7 trillion in household wealth, forced millions of families out of their homes, and left nearly one in four homeowners owing more on their mortgages than their homes are worth. Private investment in housing is a fraction of its historic norm, translating to billions in lost economic output and millions of missing jobs. And more than five years into the crisis, the U.S. mortgage market remains on life support as the federal government guaranteed more than 95 percent of home loans made last year.
The U.S. housing market is where the Great Recession began and we’re unlikely to see a full recovery until the market heals. The housing sector historically accounts for about one-fifth of our economy and housing booms paved the path to our last three economic recoveries. But few analysts expect such a boom anytime soon.
We can no longer afford to ignore these problems. As the presidential campaign shifts into high gear in the coming weeks, President Obama and Gov. Romney must lay out their respective visions for housing in the United States. This brief lays out seven essential questions the presidential candidates need to answer on housing. Each question includes key facts for voters, reporters, and other key stakeholders, as well as a brief discussion of why the issue matters and CAP’s recommendation for fixing the problem.
1.Five years after the housing bubble burst, experts suggest we may be only halfway through the resulting foreclosures, with millions still to come. Do you think the federal government should do more to help prevent unnecessary foreclosures? If so, how?
Foreclosure is often the worst-case scenario for every party involved, since it results in
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