Bush Administration Budget Highlights Housing Slump
- Feb 05, 2008
administration’s fiscal 2009 budget, released Monday, has a common theme: Housing woes.
The budget frequently mentions the current slump and makes it clear that housing will continue to affect economic growth next year. That’s no shock to any members of the residential building, development, sales or financing industries–or anyone who reads the newspaper on a regular basis–but as we search for signs that the housing gloom and doom is coming to an end, it’s worth noting yet another governmental body doesn’t think that’s going to happen anytime soon.
Last month, we saw the Fed finally acknowledge the housing decline’s severe impact on the economy with two "aw, shucks" rate cuts. After a summer of waiting the situation out, the Fed’s long road to recession fear started in fall–and looks like it will continue through at least part of 2008.
Although the Bush administration budget said that housing "should cease to be a negative influence on growth" beyond this year, it offered up several suggestions to help curb the effect housing will have on the economy, including:
- Restructuring the Federal
Housing Administration–which would allow it to help 280,000 first-time buyers in 2009–and increasing regulation of Fannie Mae and Freddie
- Providing homeowners and residents with housing counseling, which would cost $65 million.
the Federal Housing Administration’s loan limit even more than the stimulus plan suggests, raising it from
$362,790 to $417,000.
According to the Bush administration, the Department of Housing and Urban Development also will
finalize regulations that will provide clearer credit
card and mortgage disclosure practices–which have been cited as key factors in the mortgage industry collapse.
Certainly something needs to be done to buffer the housing decline’s impact: But are the budget’s proposed housing fixes what the U.S. economy–and homeowners–need?
Which is the most likely to succeed–and which most likely won’t? Do any sound too similar to the ideas put forth in the economic stimulus plan? (We’re still waiting to see if the reaction to the budget’s suggestions will be anywhere near as negative as the initial reaction to the stimulus plan.)
MHN wants to hear your take. Post your opinion–and start the discussion.