Though most economists believe the nation’s housing crisis shares the stage with unemployment as the two fronts where we are failing in America’s war to revive its economy, housing barely received a mention in President Obama’s first State of the Union message last night.
With homes sales plummeting again, three million foreclosed homes clogging inventories across the nation and the Administration’s program to fend off foreclosures falling short of expectations, it’s no secret that twelve months after taking office housing has proved to be more difficult than anticipated.
In his speech, the President mentioned the first-time buyer credit and vowed to “step up refinancing so that homeowners can move into more affordable mortgages,” though there were no details. Nor were their bold new ideas to address foreclosures, improve home values, restore faith in the mortgage-backed securities markets, shore up FHA, resolve the fates of Freddie Mac and Fannie Mae, or rekindle demand with the tax credits expire in three months.
Yet he attacked the unemployment aggressively, devoting two-thirds of his speech to the economy and declaring jobs to be “our No. 1 focus in 2010.”
To add a touch of irony to the situation, today HUD is expected to dust off a program launched by the Bush Administration?Hope for Homeowners?to help homeowners who owe more than their properties are worth. The changes would be at least the third lease on life for the program, which began in October 2008 and has so far helped just 96 of the 400,000 homeowners originally targeted.
Two hours after he finished, RealtyTrac released its statistics on leading foreclosure markets in 2009. The data underscored the link between foreclosures and jobs.
“While it was expected that cities from states with the highest levels of foreclosure activity would top the charts, there is evidence that we’re entering a new wave of foreclosures, driven more by unemployment and economic hardship than what we’ve seen over the past few years,” said James J. Saccacio, chief executive officer of RealtyTrac.
“Areas like Provo, Utah, Fayetteville, Ark., Portland, Ore., and Rockford, Ill., all posted foreclosure rates above the U.S. average in 2009. And markets like Honolulu, Minneapolis and Seattle saw foreclosure activity increase at more than twice the national pace over the past 12 months - although all three of those markets still had 2009 foreclosure rates that were at or below the U.S. average.”
The lack of attention to housing did not go unnoticed in some communities where foreclosures are bleeding local housing markets dry. In Fresno, Representative Jim Costa (D-Fresno) stated, “The president made no mention of the two most serious issues affecting our Valley’s economy: water and housing.”
“I’m pissed off,” Rep. Dennis Cardoza, D-Merced, said Wednesday. “The Obama administration did not cause these problems, but they’re not working hard enough to fix them.” Citing the department’s “complete incompetence,” Cardoza declared he had “lost confidence” in Donovan and all but demanded the Cabinet secretary’s resignation.
The congressman blames the housing secretary for failing to adequately assist valley cities such as Merced, where the foreclosure crisis ranks among the nation’s worst. He blames Obama for not visiting the San Joaquin Valley, wracked by chronic unemployment and extended drought.
Cardoza’s not alone in his frustration. According to a Harris Survey conducted for the Trulia web site and released yesterday, only 36 percent of Americans give the president a passing grade or better for restoring the American dream of home ownership. A year ago, he received passing grades from 54 percent.