The Republican and Democratic conventions are almost upon us, and the housing crisis has finally been inserted into the presidential election.
Maybe the President and his Republican rival see homeowners as nothing more than another campaign issue to be exploited, or maybe they are finally starting to understand how central the need to tackle the foreclosure problem is to the American public.
Some days it is hard to tell. But at least the narrative is starting to move forward. It is a start, if a meager one at best.
The housing market is indestructibly woven into the economy. The whole narrative is actually very simple.
Housing has led the economy out of every recession since the Great Depression.
A refi boom inevitably takes hold as interest rates drop and folks refinance their mortgages for lower interest rates.
The extra money from the lowering of your monthly mortgage payments goes right back into the economy, whether its buying new tires, taking the family out for dinner or going to the shore for the weekend.
Those activities stimulate the economy from the ground up. That unfortunately didn’t happen this time because there wasn’t enough equity in our homes and thus the banks refused to refinance your loan.
But of course you and I have known this for a long time now, long before those in power were paying attention.
A year ago I told you underwater mortgages were the “900 lb. gorilla in the room” that could derail President Obama’s re-election campaign.