The housing market received some well-earned recognition last night in President Obama’s State of the Union address, with the president praising the market’s rising home prices, strengthening purchase market and the rebounding construction sector.
What the president did not mention, though, was any new legislation or policy to further support housing. Though news reports had teased the possibility that Obama would introduce bold new measures for the housing market (especially through an aggressive, Executive Branch-led refinancing initiative), those prophecies were unfulfilled.
The Obama Housing Policy: More of the Same?
Here are Obama’s comments on the housing market from his speech, in full:
Part of our rebuilding effort must also involve our housing sector. Today, our housing market is finally healing from the collapse of 2007. Home prices are rising at the fastest pace in six years, home purchases are up nearly 50 percent, and construction is expanding again.
But even with mortgage rates near a 50-year low, too many families with solid credit who want to buy a home are being rejected. Too many families who have never missed a payment and want to refinance are being told no. That’s holding our entire economy back, and we need to fix it. Right now, there’s a bill in this Congress that would give every responsible homeowner in America the chance to save $3,000 a year by refinancing at today’s rates. Democrats and Republicans have supported it before. What are we waiting for? Take a vote, and send me that bill. Right now, overlapping regulations keep responsible young families from buying their first home. What’s holding us back? Let’s streamline the process, and help our economy grow.”
Though he didn’t mention it by name, the president was likely referring to the Menendez-Boxer housing legislation, which would make technical tweaks to the government’s Home Affordable Refinance Program, or HARP, including waiving certain FHFA fees for refinancing borrowers. Senators Robert Menendez (D., N.J.) and Barbara Boxer (D., Calif.) have been pushing the legislation for some time, and though the bill will likely appear before the Senate this spring, it’s fate in the Republican-controlled House is unknown.
Housing Policy in 2013
So where does this leave government housing policy in 2013? In a recent article for the Wall Street Journal, Nick Timiraos wrote that a “universal refinancing” bill could be on the way, which would extend HARP refinancing privileges to borrowers without government-backed loans; according to other Journal reports, the plan would change the charters of Fannie Mae and Freddie Mac to allow the GSEs to buy the newly-refinanced mortgages.
The FHFA, who regulates Fannie and Freddie, have apparently been in discussion with Senator Jeff Merkley, a Democrat from Oregon, about the bill, but as with anything in Washington nowadays, the odds of such a bill getting passed remain uncertain.