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Health & Fitness

Home Buyers Holding Off Until They Know Who Will Be President

The next president - whether Democratic incumbent Barack Hussein Obama or Republican challenger Mitt "Call Me Mitt" Romney - will have a HUGE influence on housing.

The next president of the U.S. - whether Democratic incumbent Barack Hussein Obama or Republican challenger Mitt "Call Me Mitt" Romney - could have a big influence over the recovery taking shape in the real estate market.

In fact, the next president, whoever it turns out to be, is going to have a couple of big housing issues to address, not the least of which is the homeowners’ mortgage interest deduction (MID). Whoever it is will grapple with such bedrock tenets as what is the government’s role in housing finance, and will consumers have access to mortgages at affordable rates?

For example, in a recent poll of 2,500 poential home buyers, more than a quarter of Americans say they want to put off purchasing a home until they know who the next president will be, with people in the South representing the highest percentage of those who said they’ll delay buying a home because of the uncertainty surrounding the presidential election. Meanwhile, Americans in the West had the largest percentage of those who said the upcoming election has no effect on their home purchase decisions.

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Pundits claim the next president will likely have a big influence over the mortgage market, such as determining how much of the real estate market could continue to be subsidized by the federal government and that decision will have a huge influence on the housing market and the price of real estate, both for the lower end of the market that competes with affordable rental housing and the higher end that has lagged, partly because of lower limits for the size of mortgages that can be purchased and resold by Fannie Mae and Freddie Mac.
 
Neither candidate so far has outlined a specific proposal for the housing market or mortgage lending. However, if re-elected, Obama is expected to continue adding to existing programs, such as foreclosure relief, loan modifications and expanding refinancing options for home owners. (This assuming the lenders will actually do what he wants them to do.) He's also expected to continue pushing for new housing finance rules under the Dodd-Frank Act,

But the President is also calling for a reduction in the MID in his proposed budget, and an outright elimination of it is still not out of the question. Either way, it could be up to a trillion dollar tax increase (yes, that's with a 'T') for Americans... and we won't know if we're going to get, um, 'tricked' until after the election. In 'Vegas, that game's called craps.

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If elected, Romney is expected to repeal the Dodd-Frank Act  -  which was supposed to reform the banking industry - and will likely replace it with regulations that would make it easier for the private sector to be a stronger player in the mortgage market.  The Mittster has said this not in so many words (heck, he's hasn't said it in any words), as he remained eerily silent on housing during his address to the RNC. Hedid release a six page housing plan that, in enlightened summation said, "housing is good." No, um, kidding Sherlock. (But only six pages[!] to address all of our nation's housing/lending/foreclosure/ finance/rental/residential construction/refinance/real estate policies?)  

In the interest of fairness, housing also didn't get mentioned at the DNC except as a passing buzzword... or complaints about the CA delegation's hotel rooms.

Veep candidate Paul Ryan and the Romulan (Romney) say the mortgage market should be privatized and they are in lockstep in disagreeing with the passage of Dodd-Frank. Privatizing the mortgage market would face heavy opposition. The Mortgage Bankers Association has warned that the absence of a government guarantee would hurt the availability of 30-year fixed rate loans and that federal participation is needed to ensure that the mortgage market still functions during deep economic slumps.

And whither current V.P.? About housing, he was last heard making his famous “chains” comment:  "(Mitt) Romney... said in the first hundred days, he's going to let the big banks once again write their own rules. 'Unchain Wall Street.' They're going to put y'all back in chains." Bottom line: Biden needs to become relevant again on housing issues.

Just remember this: The federal government committed $23.7 trillion in various initiatives to save the financial industry. (Yup, once again, that’s 23 with a 'T.') Not all of it was spent, but that figure begins to get at the depth of devastation to the housing market.  The next president – whether Pachyderm or Donkey – will, indeed, shape the housing market for the next few decades.

It just would be nice to not have to play 'Hide n' Seek' with the American Dream and have either Barry or The Mittman reveal details of what their plan might be... ya think?

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