One step toward recovery
Reports from the end of last year point to signs of life in our nation’s long-dormant housing market.
The Commerce Department last week stated that sales of new homes rose 4.4 percent in November from October to a seasonally adjusted annual rate of 377,000, according to a report by the Associated Press. That marks the fastest pace since April 2010, and was aided (in large part) by a federal tax credit which had most likely boosted sales.
Also of note: New-home sales increased 15.3 percent over the past year, though sales continued to remain below the 700,000 that economists consider healthy.
Experts credit steady job gains in 2012, combined with ultra-low mortgage rates for the boost of newly built and previously occupied home sales.
"Another big reason for the rebound," according to the AP report, "is the excess supply of homes that were built during the housing boom has finally thinned out." According to the Commerce Department’s report, only 149,000 new homes were for sale at the end of November, just above a record low of 143,000 in August.
And while this can be viewed as an improvement in the overall housing market, what about the other side of the story? More than one-fifth of homeowners with mortgages - almost 11 million households - now owe more than their homes are worth, and these people have yet to see any help from the Obama administration.
These people are trapped in their current situations, unable to move and find new jobs without "taking a hit" on their housing investment. Or simply move to a more manageable living situation (cheaper house; lower taxes; etc.).
And while the current administration has policies in place to assist those whose mortgages are backed by the government, there are many restrictions (and caveats) in place.
As our colleagues at the Sentinel and Enterprise have said, housing remains one of the most troublesome aspects of the nation’s gloomy fiscal outlook.
It has been reported that the White House may be considering a plan which would allow Fannie Mae and Freddie Mac the ability to offer help to millions of homeowners, with mortgages elsewhere, refinance their so-called underwater loans provided they’re up to date with their payments.
This refinance deal is worth further consideration, provided Congress could somehow find a way to unite behind it. (A daunting task, to be sure.) We believe offering any stability to the housing market would be one step in the country continuing to pull itself out of the ongoing recession.
If we can take enough positive steps forward in the coming year, who knows where we’ll find ourselves in 2014.
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