articles about “Obama”
Housing Misery in the Swing States
In Nevada, Florida and Michigan, the Presidential Candidates Will Have to Talk About Housing
Housing got little play during the Republican primary season, as we predicted, but will it get any attention in the presidential election? With the general election campaign now underway, we updated our Housing Misery Index to see if — and where — the candidates will focus on housing.
The Most Miserable Housing States
Our Housing Misery Index takes two important indicators of a state’s housing market and adds them together. These are:
1) The percentage change in home prices from each state’s own peak during last decade’s bubble until today, from FHFA. Big price drops lead to more underwater borrowers and less household wealth, which hurt the housing market and hold back economic recovery.
2) The percent of mortgages either severely delinquent or in foreclosure, from CoreLogic. Defaults and foreclosures damage consumer confidence in the housing recovery, and foreclosures hurt not only the people who lose their homes but also their neighbors.
Four states continue to stand out from the rest for their housing misery: Nevada, Florida, Arizona and California. In these four states, home prices are 40% or more below their peak – and almost 60% in Nevada. In addition to big price declines, Florida has, by far, the highest share of homes where borrowers are either delinquent or in foreclosure; the state’s judicial foreclosure process means that foreclosures take much longer to complete than in most other states. But things are slowly improving: in three of these four most-miserable states – except Nevada – the Housing Misery Index has fallen several points in the last year.
0 commentsOops! Manufacturing Not Leading Recovery.
Sorry, Obama. Despite making the push for more manufacturing jobs in his State of the Union address, a new employment projections report is betting on service and construction industries.
In last week’s State of the Union speech, President Obama gushed about manufacturing. He envisioned “an economy built on American manufacturing” and told us of the “huge opportunity at this moment to bring manufacturing back.”
But before unemployed machine operators and homeowners in factory towns get their hopes up, hear this: Obama’s speechwriters didn’t check with Obama’s experts. This morning, the Bureau of Labor Statistics released the official employment projections for the next ten years. What do the numbers say? Manufacturing will look more like the caboose than the engine of the economy. These projections deliver hard truths about manufacturing that the government, job-seekers and house hunters need to keep in mind:
- Manufacturing shrinks even as the economy grows. Manufacturing jobs are projected to slip by 0.6% between 2010 and 2020, even though overall jobs will grow by 14.3%. That means that manufacturing will drop from 8.1% of all jobs in 2010 to 7.0% in 2020. The decade will be especially grim for apparel and leather manufacturing, both of which will shrink by more than half. Because manufacturing productivity is high, it accounts for a much bigger share of output in dollars than of jobs. Even so, manufacturing’s share of overall output will also drop, from 19.2% in 2010 to 17.6% in 2020. No matter how you slice it, the economy is not built on manufacturing today and won’t be in 2020.
- Lots of jobs in manufacturing industries are really service jobs. Only 56% of jobs in manufacturing companies involve making or fixing actual stuff, what the government calls production, installation, maintenance, and repair occupations. (If you’re doing the math, that means only 4.5% of jobs in the U.S. involve making or fixing stuff in manufacturing industries.) What’s the rest? Service jobs: management, finance, sales, office support and so on. And don’t look to high-tech manufacturing for production jobs, either: just 32% of jobs in the computer and electronics manufacturing industry involve production, installation, maintenance or repair.
- The fastest growing sectors are service industries and a construction rebound. Professional services, education and health care will be the fastest growing sectors through 2020, along with construction. The fastest growing occupations will include higher-wage jobs like biomedical engineers, diagnostic medical sonographers and market research analysts, and lower-wage jobs like personal care and home health aides and construction helpers.
What does all this mean for housing? Over the long run, housing demand, sales, and home values go up in cities where there’s job growth. And local job growth depends a lot on which industries happen to be there: when high-tech booms, Silicon Valley and Austin grow; when the car industry melts down, Detroit suffers. The continued decline of manufacturing in America means rough times for housing markets in manufacturing cities.
Where are the manufacturing jobs? Manufacturing is relatively big in Midwest metros like Grand Rapids, MI, Gary, IN, and Milwaukee, WI, and also in southern spots like Greensboro, NC, Greenville, SC, and Louisville, KY. At the other extreme, there are almost no manufacturing jobs in south Florida or in the big east coast centers of New York, Washington and Boston. But the overall picture for long-term job growth and housing demand is not just about where manufacturing is – it depends on how fast all local industries are growing. I’ll do a deeper dive on longer-term growth soon. Stay tuned.
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State of the Union: Small Missing Pieces in the Messy Housing Puzzle
Trulia's Chief Economist shares his thoughts on what President Obama did and didn't say about housing in his State of the Union address
You might have missed it among the long, long to-do list Obama gave tonight, but the President announced two new housing proposals: more refinancing, and more investigations of banks. Neither is a breakthrough: they fill in some of the missing pieces in the messy jigsaw puzzle of Obama’s housing policy. Here’s what he proposed:
1) Letting more borrowers refinance. Obama proposed that “every responsible homeowner” be able to refinance. The existing refinancing program (HARP) lets borrowers who are current on their mortgages refinance even if they’re way underwater – but only if their loans are guaranteed by Fannie Mae or Freddie Mac. Obama’s proposal would extend refinancing to borrowers who are current but whose loans AREN’T guaranteed by Fannie or Freddie – which the New York Times reports could be two or three million borrowers. It sounds like Obama will ask Congress to let the Federal Housing Administration (FHA) guarantee refinancings by underwater borrowers and charge big banks a fee to cover the costs. If Congress is involved and banks are asked to pay … well, let’s just say it’s not a done deal. Obama doesn’t always get his way with Congress or with the banks.
And if this happens? It won’t save the housing market. Letting borrowers refinance only if they’re current on payments won’t help people on the verge of losing their homes. And, refinancing won’t reduce principal, so underwater borrowers stay underwater. Refinancing is economic stimulus: it gives homeowners with mortgages more spending money. (I said the same thing last October about the expansion of HARP.)
2) Investigating mortgage lending and securitization. Again, this proposal fills in missing pieces. That big robo-signing settlement – which Obama didn’t mention tonight but could come soon – would punish banks only for their foreclosure practices. The new, proposed investigation would have those same states’ attorneys-general plus the feds go after risky lending and securitization practices. It’s great politics to punish banks, and maybe they deserve it. But remember, the robo-signing controversy has gummed up the foreclosure process as banks wait for the settlement to set clear rules on foreclosures. What if this new investigation gums up lending and securitization? That could make mortgages scarcer and more expensive.
The only real housing fireworks were the swipe Obama took at Republican candidate Mitt Romney. The President said “responsible homeowners shouldn’t have to sit and wait for the housing market to hit bottom,” a direct hit at Romney’s comments in Nevada last October that the foreclosure process should “run its course and hit the bottom.” If Romney gets to face Obama in the presidential election, you can bet Obama will be tossing that quote back in Romney’s face again and again. Here’s to 2012!
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Housing Cheat Sheet for State of the Union
Leading up to the 2012 elections, here are 4 hot topics that matter most to the state of housing in America.
President Obama will deliver his annual State of the Union address to the nation tonight. It will tell us where Obama thinks he’s succeeded and fallen short. It will also set the tone for how he will fight in the election. I’ll be watching to see what he does (and doesn’t!) say about housing.
Specifically, here’s what I’m looking for:
1) Will Obama be upbeat or downbeat about the market? On the plus side, sales and construction are rising and inventory is falling. On the minus side, prices keep slipping and a foreclosure wave is coming. Which story will Obama tell?
2) Which policies – planned, coming or surprises — will Obama talk about? Will we hear about:
–The robo-signing settlement
–Expanded refinancing through HARP
–Sale or rental of government-owned homes (REO-to-rental)
–Changes to the mortgage interest deduction
–Changes to conforming loan limits for Fannie/Freddie/FHA
–The future of Fannie and Freddie
–Or something else?
3) How will Obama sell his housing ideas to the public? Will he tackle the tough questions about:
–Who pays for housing policies – Taxpayers? Banks? Investors?
–The “heads I win, tails you lose” problem: how will he sell policies that reward bad choices that some homeowners, banks and agencies made?
4) Will Obama make housing a partisan issue? Housing is a bipartisan issue. Trulia’s survey of consumers shows that most Democrats AND most Republicans want the government to support homeownership and want to see more action on housing (full survey results here). But the Republican presidential candidates have shied away from housing policy. Will Obama use housing to attack the Republican candidates?
Stayed tuned – I’ll be giving my take on his speech tomorrow.
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Asking What Our Country Can Do For Housing
5 years later and the housing market’s still stuck in the mud. Obama’s definitely got an uphill battle come election year (oh snap, that starts in two weeks!)
2012 is going to be a big year for Washington DC. Not only are we going to get more political skits from Saturday Night Live (remember this gem from 2008?), but we’re also going to hear a ton of campaign promises on how candidates plan to make things better for the economy, the government purse and housing.
But before we go down that rabbit hole, let’s take a step back and ask the American people what they want rather than listening to politicians tell us what we need. To do this, we asked people across the country (through an online survey conducted by Harris Interactive), what they thought needs to be done to fix the economy. We also asked them what would actually make them believe that things are getting better and if they still believe Obama can turnaround the housing market.
So what did our Winter 2011 survey tell us? To give you the inside scoop, we put together an infographic to help us walk though all the key findings. Let’s get started…
Get Your Priorities Straight – Jobs Before Homes!
The bigwigs at the capital might still be battling it out over how to fix the economy, but if you were to ask everyday Americans what they think the government needs to do, they’ll give it to you straight. Helping people find jobs needs to come before helping people buy homes. To flip this would be putting the cart before the horse, and it’s a sentiment that’s shared by both team elephant (Republicans) and team donkey (Democrats). Just check out the bar chart below to see just how aligned everyone is.
It’s About Keeping What Ya Got
While housing ranked lower on almost everyone’s to-do list, 72% of Americans said government policies and programs should be pimping out homeownership. But wait! Before you get all up and arms about how “irresponsible” that is, let’s point out a notable caveat first. By encouraging people to be homeowners, what Americans are really saying is that they want Uncle Sam to help current homeowners keep their homes, rather than helping renters buy their own pads. The chart below spells this out much better, illustrating the housing policies and proposals that voters care most about.
Housing Recovery? Seeing Is Believing
While the housing market isn’t crashing and burning like it did five years ago, things aren’t exactly coming up roses right now. But really, what’s the light at the end of the tunnel when it comes to a recovery?
To find out, we asked people to tell us what will make them feel better about buying and selling homes (by picking 3 things out of 10 options). Interestingly, the top three beacons of hope were things that you can see with your own two eyes. This includes fewer foreclosures, fewer lingering for-sale signs and fewer empty houses. Check out the flow chart below to see where prices and lower mortgage rates ranked.
A Change of Confidence We Can Believe In
Back in 2008, Obama asked the American people to “vote for change” – there was a bit of marketing magic in how he united the nation around his vision that “yes we can” make things better. Now fast forward to today and it’s almost safe to say that the more noticeable change we’ve seen is a change in consumer confidence.
How do we know this? Well, we had asked people back in 2009 about their confidence in the incoming president’s ability to turnaround the housing market. We then asked this same questions again in 2011 and then graphed the results in a side-by-side comparison. Clearly, America’s faith in Obama’s ability to stabilize the housing market has waned.
So long story short, if the president hopes to have a second term, then he best be ready to fight for it. With about 65% of Americans saying that housing hurt Obama’s re-election, Obama’s got an uphill battle waiting for him. Only time will tell if the President can bring back Candidate Obama from 2008.
To see the full results from our latest consumer survey, click through the slideshare below:
To view a video of our Chief Economist Jed Kolko discussing the findings, see below.
To download the infographics pasted above, check out our Flickr account:
http://www.flickr.com/photos/truliavisuals/
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