In a rare second-term election for a president facing economic turmoil, President Barack Obama got a boost from recovery in the housing market, a cornerstone of the economy.
“Housing trends was a tailwind for President Obama’s second term win. Recent gains gave voters hope for a sustained housing recovery,” according to Clear Capital’s Home Data Index™ (HDI) Market Report released two days after voters turned out in near record numbers.
(Editor’s note: DeadlineNews.Com called it way back in June 2011, in “Housing to take center stage in 2012 election”)
With millions of votes still uncounted, the election drew some 120,000,000 voters to the polls. That number could go higher. Only the 2004 and 2008 elections drew a larger turnout – 122,267,553 and 131,144,000 respectively.
Given the boost Obama received from housing, housing advocates expect the reelected president to go full throttle and pull out the stops on further support for a sector with a track record for boosting the economy-at-large.
Housing, including shelter itself, household operations, insurance, fuels and utilities, water, sewage and trash services and furnishings, among other expenditures, account for about 40 percent of the Consumer Price Index, an index of consumer expenditures, according to the U.S. Bureau of Labor Statistics.
Consumer spending, for better or for worse, is the juice that fuels the economy.
“Now that the election is finally behind us, there should be no more political risk in addressing the housing problem head-on. President Obama’s housing policies must evolve to turn the recovery’s sprint into a marathon,” said Dr. Alex Villacorta, Clear Capital’s research and analytics director.
(Note: Since this article published, Florida turned blue, with President Obama winning both the popular vote and Electoral College vote in the Sunshine State.)
Chris Estates, the National Housing Conference’s president and CEO also sent a challenge to the other side of the political aisle.
“Both parties must recognize that the economic recovery that we are all looking for cannot occur without a housing recovery, which will take strong and careful policies to create,” Estates said.
“Whether directly or indirectly, it would be hard to find a voter who hadn’t been adversely affected by the housing collapse, and many are still at risk. While prices are up 4.6 percent over the year, they remain 37.6 percent below the peak. Given these losses, a home purchased for $200,000 in 2006 would likely be worth just $124,800 today. Obviously, housing is a central issue for many voters, and we still have a long road ahead of us,” Clear Capital reported.
Clear Capital said progress in housing, one of the bright spots in economic recovery, helped give voters confidence that economic gains would continue under a second term for Obama. Now, the president can help the middle class by further supporting housing.
Housing progress Clear Capital reported included:
• REO saturation in October declined to just 18.1 percent. Since the peak in 2009, REO saturation dropped 23 percentage points.
• Since 2009, just over 1 million loan modifications, through HAMP, and 1.5 million refinances of underwater mortgages, through HARP, have taken place.
• Quarterly price gains picked up momentum in October, after a soft September. While current quarterly gains are all under 5 percent, October marks the fifth consecutive month of quarter-over-quarter home price growth.
• Nationally, prices edged up 2.1 percent over the rolling quarter, a slight uptick over September’s rate of growth.
• The West, and Northeast, where President Obama effectively won reelection, quarterly gains were up 3.7 percent and 1.9 percent respectively.
• In the South, where Gov. Mitt Romney won a largest share of the vote, prices posted gains of 2 percent over the rolling quarter.
• In the Midwest, where both candidates enjoyed some victories, quarterly home price growth was up only 1 percent.
“But there are certainly states within the Midwest, like Ohio, that have made notable progress. Ohio’s recorded quarterly gains of 1.6 percent are secondary to its more substantial long-term price growth of 15 percent since President Obama took office. Ohio is a great example of how housing was on the President’s side,” Clear Capital reported.
The road ahead
NHC said during the Obama Administration’s hard-fought second term, the administration must work with the new Congress to:
• Strengthen the housing finance system, so that there are multiple efficient channels of capital for homeownership and rental homes.
• Rebuild communities damaged by foreclosures, while strengthening the foreclosure prevention policies that limit further aftershocks from the crisis.
• Plan communities for the future, by better aligning housing, transportation, environmental, health, and other policies.
• Create a stronger, balanced federal housing policy, that provides essential housing assistance, draws in private capital and entrepreneurship, and provides both homeownership and rental housing opportunities for all in America.
Also see: “Laughing off the presidential election”