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What Does an Obama Second Term Suggest for Housing?

by Peter Thomas Ricci

nahb-webinar-housing-market-obama-second-term-fiscal-cliff-gse-reform-taxes-mid

Now that President Obama has been reelected to a second term, what’s next for the housing market? The NAHB surveyed several areas in a free webinar.

By Peter Ricci

In a free webinar open to the public, the National Association of Home Builders (NAHB) assessed the politics and economics surrounding the housing market following the reelection of President Obama.

Featuring Jerry Howard, the association’s CEO, Jim Tobin, its senior vice president of government affairs, and David Crowe, its chief economist, the wide-ranging webinar looked at both the many issues facing real estate as the age of Obama begins its second wave.

NAHB Webinar – Politics and Real Estate

In a segment that looked at housing legislation, Tobin, who also acts as the NAHB’s chief lobbyist, said the election made one thing clear – voters are in favor of President Obama’s mandates for both health care and the financial sector.

  • Though “Obamacare,” as it’s called, will affect housing on a more implicit level, the Dodd-Frank regulatory bill will have serious implications for the future of housing, particularly with its QM and QRM regulations; and with Obama’s reelection, Tobin added, it’s safe to say both are here to stay.
  • And regarding his lobbying efforts, Tobin said the emphasis will be to avoid any major shift in government policy during the lame-duck session, though he anticipates most major policy discussions, aka tax reform and the like, will be reserved for the next Congress in January.

Fannie, Freddie and the Fiscal Cliff

Howard’s segment dealt with the fiscal cliff, taxes and Fannie Mae and Freddie Mac, the three most pressing arenas of housing policy in the coming months.

  • With all the coverage we and other outlets have devoted to the fiscal cliff, its importance should be self-explanatory – $500 billion in automatic spending cuts and tax hikes, which would throw the financial markets into “turmoil,” in Howard’s words, and threaten the housing recovery.
  • On the matter of taxes, Howard said the NAHB is firmly against any “tinkering” with deductions, particularly the mortgage interest tax deduction, which has been floated as a possible source of reform during fiscal cliff discussions by even President Obama himself. Such changes to housing, he suggested, would almost surely impact the housing recovery.
  • And finally, Howard said that he and Tobin’s sources on Capitol Hill are saying Congress will begin debating the future of Fannie Mae and Freddie Mac, and what, if any, reform efforts should be pursued. Neither extremes, Howard said – Republicans arguing for a complete elimination of the GSEs, Democrats arguing for absorption by the FHA – are likely to happen, so the NAHB is suggesting a compromise, where a new secondary mortgage market is created, one featuring private companies that still boasts an implicit government guarantee.

So what do you make of these topics? Is the NAHB’s focus sharp, or are there any major, pressing issues regarding real estate and the housing market that you think they should focus on?

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