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The two lines from Obama that rocked housing

President Barack Obama’s State of the Union Address contained over 6,500 words and only mentions housing twice, once at the beginning and in the middle.

At the forefront of his speech, Obama said, "Here are the results of your efforts: The lowest unemployment rate in over five years. A rebounding housing market. A manufacturing sector that’s adding jobs for the first time since the 1990s."

Further along in the speech, Obama touched on housing again and said, "And since the most important investment many families make is their home, send me legislation that protects taxpayers from footing the bill for a housing crisis ever again, and keeps the dream of homeownership alive for future generations of Americans."

The full transcript of Obama’s 5th State of the Union address can be read here.

Obama's minor mention of a bill to protect taxpayers and avoid a housing crisis ever again may have more meat to it than his simple approach suggests.

"The statement lacked specificity and appeared to serve more as a rhetorical bridge between the discussion of MyRA and health care than as a policy point of focus," analysts with Compass Point Research & Trading explained. For the housing market, the president seems to be suggesting GSE reform.

As a result, Compass Point does not believe that President Obama’s GSE reform commentary, or the Congressional response, signal a change in the underlying dynamics of the GSE reform debate.

But Obama’s brief comments were still enough for industry associations to hang onto.

"Just as the President mentioned tonight, we believe that the time is now for Washington to take a more active role in housing reform," said David Stevens, president and CEO of the Mortgage Bankers Association. "Be it through legislation as President Obama suggested, or other measures that don’t require Congressional action, strengthening the real estate finance system is good for borrowers and will only improve our recovering economy."

Homeownership is a key part of the American Dream. But too many credit worthy borrowers are still unable to purchase a home of their own, said Rick Judson, chairman of the National Association of Home Builders and a home builder from Charlotte, N.C.

"With the right policies in place, housing can lead the economy to higher ground," Judson said. This includes creating more than 300,000 full-time jobs and $8.9 billion in tax revenues that are essential to help local communities build schools, hire police and firefighters, and fix roads, by building just 100,000 homes, he added.

National Community Reinvestment Coalition President and CEO John Taylor also pointed out that, "Homeownership is the single most effective path to the middle class. "The President needs to ensure that the affordable housing goals, which help to create homeownership opportunities for creditworthy borrowers, remain in full force and effect."

Obama outlined some of those goals in his State of the Union Fact Sheet: Opportunity for All.

"The President is encouraged by the leadership of Senate Banking Committee Chairman Johnson and Ranking Member Crapo in seeking to forge bipartisan legislation. The President is also appreciative of the bipartisan efforts of other members of the Senate, such as Senator Warner and Senator Corker," the fact sheet stated.

"It is not at all surprising and basically he is throwing his support behind what is being discussed in the Senate banking committee right now. He is encouraged by the leadership of the committee and appreciates the works of the bill," noted Bill Hampel, chief economist of the Credit Union National Association.

But do not expect Fannie Mae and Freddie Mac reform to happen anytime soon, Hampel explained.

"Since they are making a lot of money, it takes a bit of the urgency off of Congress to fix this. They know they need to in the long term," he added. "Under any reform system, borrowers need to have access to a fairly diverse source of lenders."

"It is encouraging the President called for action on the critical issue of housing finance reform," said Tim Pawlenty, CEO of the Financial Services Roundtable. "Reforming Fannie and Freddie so that taxpayers are no longer on the hook is critical and the time to act is now."

As a whole, while Obama barely referred to housing, most of his opinions were outlined in an accompanying fact-sheet, said Jed Kolko, chief economist and vice president of analytics with Trulia.

According to Kolko, Obama did not refer to housing for four reasons: not pressing enough, mostly settled, too local and too messy.

"Tonight he didn’t reveal any new thinking on the fundamental challenge: how to keep the 30-year fixed-rate mortgage relatively cheap and widely available while minimizing taxpayer exposure to the next housing meltdown," Kolko pointed out. "Any housing-finance reform that could achieve that would be too complicated, too dependent on Congress, and would take too long to succeed for a speech about a year of action."

For second-by-second coverage of Tuesday night’s speech, check out HousingWire’s archived live blog from the event.

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The latest tumult in real estate feels like our world has been turned upside down yet again. But underneath all the frenzy, I see a genuine opportunity for us to turn this into a positive and come back even stronger than before. I often think of the term “Anti-fragile” from the book of the same name by Nassim Taleb. The principle is that people and organizations can build their success around being able to come back even stronger after a wallop, instead of just withstanding the impact. This is real estate’s moment to become even more anti-fragile.

3d rendering of a row of luxury townhouses along a street

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