What We're Reading: October 28

Throughout the week, the BPC Housing Commission will highlight news articles that address critical developments in housing policy. Any views expressed in the content posted on this forum do not necessarily represent the views of the Commission, its co-chairs or the Bipartisan Policy Center.

Fannie Mae, Freddie Mac unlikely to need more taxpayer money, feds say

By Zachary A. Goldfarb

The Washington Post

“Mortgage finance giants Fannie Mae and Freddie Mac are unlikely to need any more taxpayer money and will soon start paying back their loans, bringing the total cost of the government bailout of the firms to $124 billion by the end of 2014, according to federal officials. To date, the companies, which play a central role in the Obama administration’s response to the housing crisis, have cost taxpayers $141 billion. But soon, Fannie and Freddie will begin to generate enough profit to begin to pay back taxpayers.” Read more here.

Apartment Values Rise, as Do Rents

By Dawn Wotapka

The Wall Street Journal

“While concerns about the economy are cooling the market for most other types of commercial real estate, apartment rents and occupancies continue to be boosted by demand from millions of people who are victims of foreclosure or are unwilling or unable to buy their own homes. At the end of the third quarter, 5.6% of the nation’s apartments were vacant, down from 5.9% in the second quarter, and the lowest level since 2006, according to Reis Inc., a real-estate data service.” Read more here.

Romney’s Finest Hour

Editorial

The Wall Street Journal

“Campaigning last week in Nevada, the epicenter of the housing bust, Mr. Romney was asked by the Las Vegas Review-Journal editorial board what he would do about housing and foreclosures. His reply: ‘One is, don’t try and stop the foreclosure process. Let it run its course and hit the bottom. Allow investors to buy homes, put renters in them, fix the homes up. Let it turn around and come back up. The Obama Administration has slow-walked the foreclosure processes that have long existed, and as a result we still have a foreclosure overhang.’ “How’s that for refreshing? After five years of politicians trying without success to levitate the housing market by postponing foreclosures, Mr. Romney dared to tell the truth. Parts of the U.S., including Nevada, still have too many homes, and that supply needs to be sold off and fixed up so the market can find a bottom before home prices can start to rise again. The faster that process proceeds, the faster the recovery will take hold.” Read more here.

Underwater, Out of Mind

By Stacy Kaper and Jim Tankersley

National Journal

“Falling home prices have robbed Americans of huge amounts of presumed wealth and, as a result, drained consumer spending power, investment activity, and borrowing ability for prospective small-business owners. The median home price slumped from its 2006 high of $227,100 to $158,700 in May, a 30 percent drop, according to data from the National Association of Realtors. Homeowners across the country lost $7.4 trillion in equity during the housing price plunge. New home construction, which typically helps lead the way in a recovery, is at its lowest level since World War II. At least 5 million people have lost their homes to foreclosure, and another 3.5 million are expected to do so in the next one to two years, according to Moody’s Analytics chief economist, Mark Zandi. Nearly 15 million borrowers owe more on their mortgages than their properties are worth. One in three homes sold today are short sales or foreclosed properties.” Read more here.

Economy Alters How Americans Are Moving

By Jennifer Medina and Sabrina Tavernise

The New York Times

​ “Mobility always tends to slow in times of economic hardship, and there has been a gradual decline in American mobility for decades. But census numbers released earlier this year showed that domestic migration in 2010 had plummeted substantially since the recession began and reached the lowest level since the government began tracking it in the 1940s.” Read more here.

Housing Affordability: US Is the Envy of the Developed World

By Edward Pinto

Real Clear Markets

“Even though overall affordability today is lower than in 1989, homes in most areas of the country are affordable and that’s before taking into account current low interest rates and the impact of rising rents. This means that once policies promoting permanent private job creation are put in place, the housing market is poised to respond.” Read more here.

Are rich foreigners the answer to America’s housing crash?

By Richard Blackden

The Telegraph

“So why is housing making a policy comeback? The state of the market still remains a headwind to many Americans whose spending habits will be central in deciding whether the economy manages to skirt a second recession over the next six months. But there’s more to it than that. With Obama’s $447 billion jobs bill getting little traction in Congress, there’s an incentive for The White House to turn to areas where it can do more without having to turn to Capitol Hill.” Read more here.

Letter to Chairman Patty Murray and Ranking Member Susan Collins, Subcommittee on Transportation and Housing and Urban Development, and Related Agencies

From Senators Blumenthal, Lieberman, Kerry, Brown, Schumer and Gillibrand United States Senate Read more here.