The news this past week or so has been peppered with glimmers of hope for the residential real estate market.
The average monthly mortgage payment is almost 40 percent cheaper than in 2006. Mortgage applications increased 10.3 percent this past week as more homeowners refinanced existing mortgages or took advantage of lower interest rates to buy homes.
Industry insiders, especially locally, will welcome this news. Through September, home sales in Massachusetts are down more than 10 percent from the same time a year ago. It’s been a rough year of comparisons, considering government stimuli are a thing of the past. Nonetheless, executives predict home sales will continue to slip heading into 2012.
A perpetuated housing market decline is only halting the overall economic recovery. Two of the most influential housing analysts in New England and the country have recently made a distinct connection between the two.
Northeastern professor Barry Bluestone, director of the Northeastern University Dukakis Center for Urban and Regional Policy, explained the connection while presenting his annual Greater Boston Housing Report Card.
He said the chief reason the economic downturn has been so deep and long is because of the housing crash. When housing production slumps, many other industries suffer, including the appliance and furniture industries, lumber mills, plastics and infrastructure construction. Housing has led the economy out of past recessions. It creates jobs and is a catalyst for spending on goods and services.
Federal Reserve Chairman Ben Bernanke said his peers in the Fed and others in the Obama administration are putting a fresh emphasis on healing the housing sector. The effort to buy more mortgage debt to jolt the broader economy proves that a healthier real estate market would go a long way in strengthening the economy.
President Barack Obama recently promised to expand a government program that helps people refinance their mortgages at lower interest rates. He also proposed a new effort to rehabilitate distressed real estate in areas hard-hit by foreclosure.
The recent good news about mortgage rates and refinancing activity is only bolstered when the nation places a greater priority and focus on the housing market. Despite scandal and political obstinance, voters are still expressing an interest in housing and in creating effective housing policy.
A new survey by online real estate company Move Inc. found that 69.6 percent of voters say housing is a key issue they will follow in the 2012 presidential election. When looking at the millennial generation, the importance of housing issues edged even higher, with 70.7 percent of this cohort saying they plan to pay close attention to the candidates’ views on housing. The majority of those surveyed (82 percent) agreed with Bluestone and Bernanke and think housing is key to the nation’s economic recovery.
The foreclosure crisis, which was once a viewed as a rare and distant problem, has hit close to home – literally. In fact, almost one in three respondents believe helping homeowners avoid foreclosure should be the president’s top priority during the first 100 days of the new term.
Of those in the 35-to-64 age range, 42 percent said the government’s role in housing should be reduced. Meanwhile 67.4 percent of millennials said the president and Congress should either reduce or keep the role of government the same.
Errol Samuelson, chief revenue officer of Move Inc., said a focus on housing could be the issue that propels any new candidate into the Oval Office in 2012.
“The survey illustrates candidates who share the concerns of the American people and make housing a top priority will win their confidence,” he said.
There isn’t one person – or policy – that will rectify the mess that is the housing market. But if the nation can agree that a housing recovery must be placed ahead of other trivial problems, we’re well on our way.
