In a highly anticipated speech on Tuesday, President Barack Obama laid out his plan to continue moving the nation’s housing forward. The president, who has been visiting towns throughout the country over the last few weeks, has focused his efforts on creating a better life for the middle class as of late.
The White House even published this chart to serve as a visual guide to the new plan.
“Everyone who works hard has a chance to succeed,” said President Obama, who acknowledged the challenges that Arizona in particular has faced the past nearly five years, as the nation fought its way back from a devastating recession.
“We’ve cleared away the rubble of the financial crisis,” said Obama. However, the president noted, as Washington heads toward another budget debate, the stakes could not be higher. “We’re not yet where we need to be.”
The president stated his highest priority is to allow Americans to “make it” when they try. “Right now, we’re not delivering as much as we should on these promises,” he said.
Last Tuesday, the president went to Tennessee to discuss the first cornerstone of middle class security: a good job. Today, he addressed the second component: the chance to own a home.
“A home is the ultimate evidence that here in America, hard work pays off,” the president said to a crowd gathered at Desert Vista High School in Phoenix’s Ahwatukee Foothills section.
Over time, responsibility gave way to recklessness — whether it be reckless lenders giving loans to people they knew couldn’t afford a home or reckless buyers who took out a loan, despite their inability to make payments. It was this recklessness that created the bubble, especially in places like Arizona, the president noted.
By the time Obama took office, home values had fallen almost 20% from the year before. “People here in Phoenix, they saw that devastation,” he said.
“The truth is, it’s been a long, slow process,” he added. Since taking office, the Obama Administration has helped million of homeowners stay in their homes, but our housing market is only beginning to heal, the president noted.
“We’ve got to turn the page on this bubble and bust mentality that helped create this mess in the first place,” said Obama, who reiterated his plan is to help responsible, middle-class homeowners who still need relief, yet are willing to make payments and realize that owning a home requires responsibility.
And so, the president unveiled his plan to offer more middle-class Americans a better life. First, homeowners with non-GSE loans should be allowed to refinance their mortgage at today’s rates, which could save them on average $3,000 a year. Next, the president plans to take executive action to cut red tape so responsible families can get a mortgage.
Thirdly, Obama stated that fixing the nation’s broken immigration system will help increase home values. “When more people buy homes and play by the rules, home values go up for everybody,” he said.
Fourth, communities that were hit hardest by foreclosures during the housing crisis need to be rebuilt, including Arizona, the president said. Finally, Obama noted creating and preserving affordable rental housing for those who choose to not own a home by passing a bipartisan Senate proposal is crucial to creating a better life for many middle-class Americans.
“As home prices rise, we can’t just re-inflate another housing bubble,” Obama said. “What we want to do is something stable and steady,” he added.
Moving forward, the president believes it is imperative that Fannie Mae and Freddie Mac start to wind down. “The good news is, right now there’s a bipartisan group of senators working to end Fannie and Freddie as we knot it,” said Obama, who noted he supports a limited government role.
The president added the core principles for durable, fair housing finance reform: put private capital at the center of the housing finance system; terminate Fannie and Freddie’s failed business model so taxpayers are never again on the hook for bad loans and bailouts; guarantee widespread access to safe and responsible financing like a 30-year fixed rates mortgage; and support affordability and access for renters and homeownership for first-time buyers, partially by strengthening the Federal Housing Administration so it can give today’s families the same chance as families in the past.
Put all these principals together, that’s going to protect our entire economy and improve the housing market, not just here in Phoenix, but across the state and across the country, the president said.
“No program or policy is going to solve all the problems in a multi-trillion dollar housing market,” Obama said. By restoring home values, we will also restore common values, the president concluded.