Clear Capital’s Home Data Index Market Report concluded that homeowners’ new-found confidence,  home price gains and REO declines provided a tailwind for President Barack Obama’s second-term victory.

But now the real work begins, the data and real estate valuation firm said.

Obama and his GOP rival Mitt Romney spoke very little about the troubled housing market during the election cycle. But now that the rancorous election is over, Obama should handle housing issues head-on, Clear Capital said.

“President Obama’s housing policies must evolve to turn the recovery’s sprint into a marathon,” said Director of Research and Analytics Alex Villacorta. “With a re-election secured, President Obama has the opportunity to stimulate lending activity by being bolder on policy.”

October housing trends, which continued a quarter-over-quarter home price growth, provided homeowners with confidence that the industry is steadily improving.

National home prices were up 4.6% over the year, the highest since 2010. Even though that’s still 37.6% below the peak, it gave voters enough security in housing recovery.

REO saturation decreased to 18.1% in October. Since 2009, REO dropped 23 percentage points.

The major metro market with the highest REO saturation rate is Atlanta, with 37.8% of the housing market REO. But Atlanta’s quarter-over-quarter home price growth of 8% is a clear indication of the housing recovery in diverse cities.

To view REO saturation, please click the graph below. 

Clear Capital believes the most efficient way improve the fledgling economy is for the president to support middle-class homeowners.

“Even with the higher than historical annual average returns, lenders are still understandably cautious in the current environment of regulatory uncertainty,” Villacorta said. “And that’s left the middle class out in the cold, enticed by record affordability levels but unable to qualify for a loan.”

Obama should “press policymakers to clear up regulations,” he said.

Since 2009, more than 1 million loan modifications through Home Affordable Modification Program and 1.5 million refinances of underwater mortgages through the Home Affordable Refinance Program have taken place. Both programs reduce the delinquent loans that inevitability lead to REO inventory.

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