Here Are 3 Ideas That Will Help Fix The Housing Market

house for sale

This post originally appeared at The Atlantic. 

It has been six years since U.S. housing markets began their tumble. Prices continue to fall despite the few markets that have stabilised. Foreclosures continue at historic levels and housing starts are at their lowest level in decades. Meanwhile, nothing the federal government has done to address the situation to date has had much impact.

The crisis has devastated millions of American families, but it also has stalled the recovery of the economy as a whole. Despite this, the gravity and magnitude of the situation have yet to sink in among leaders in Washington. 

Even President Obama made only passing mention of the housing crisis in his State of the Union address. His proposals – yet another investigation of mortgage fraud and yet another mortgage refinancing program – will do no more to revive housing markets than similar efforts in the past have.

Little on the horizon promises change. Jobs are returning, but at a rate that will take years to bring back full employment and with it strong demand for new housing. Despite historically low interest rates, banks continue to constrict mortgage financing while the residential mortgage–backed security market remains dormant, leaving the federal government the primary source of mortgages. 

There are ways the federal government could revive housing, three of which are discussed below. But as will be evident, the two most significant ideas are politically controversial and would require stronger leadership than has been shown on housing to date. 

Read the rest of the story at The Atlantic >
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