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What’s the Future of the Government’s Role in Housing?

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    Trulia Chief Economist Jed Kolko on the outlook for the housing market.

  • Duration 4:08
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The president facing another four years and at the center of the issues he will deal with the country's housing problem some ten million homeowners remain under water.

Owing more than their homes are worth struggling to sell or refinance or debt so what does another four years of Obama mean for these Americans let's ask.

Jet -- trillions chief economist Jeff welcome back to the -- You know what are the interesting thing she said the pre interview with that the issue was not talked about in the debates tell us about that.

Downstairs could be back.

Housing -- the most important issue facing the country that got pretty much no attention in the campaign.

I think there are a couple of reasons why the candidates really did everything they could not to talk about housing.

For one thing the housing market -- started to recover.

Prices are up construction is rebounding sales are up vacancies are -- And -- -- a long way to go here I mean in reality the real problem is -- so many people can't get out from under these mortgages.

Now -- you mentioned that the president has -- refinance program but let's face it it's had precious little traction.

With Americans out there the banks don't seem to want to play they're slow to the party -- To refinancing -- -- loans.

What's the likely impact to the federal government on housing isn't gonna be -- recovery that starts from the ground up not the top down.

There is still long way to go -- a couple of the pressing issues as you mentioned underwater borrowers.

-- that is improving -- prices are rising but there's also still big foreclosure inventory in some states particularly Florida and some states in the northeast and -- midwest.

That's a challenge most of the people who -- going through that process and for the local markets because those foreclosures are gonna weigh down on home prices.

You there's been a lot of talk about that doing some thing to.

Make Fannie Mae Freddie Mac work better get rid of them what do you think is the right solution to the problem.

That's a big long term question.

That Obama and future administrations.

We'll have to deal with.

Right now.

The government is involved in guaranteeing or investing in a vast majority of new mortgages and that's -- that's not sustainable but the -- also so important you can't just take the government out of housing suddenly.

-- dozen mortgage market would come to a halt.

The biggest immediate question is what happens -- mortgage regulations.

At the end by the end of January the new consumer -- protection bureau was an issue the new rules around the the types of mortgages that they deem a bar were able to repay.

And that will determine the types of mortgages that banks -- may be willing to write.

Do you think that's gonna make a big difference -- to consumers because they're selling it adds -- look you're gonna -- information you didn't have before.

But -- you know look we had a boom in mortgages when they were supposedly.

Completely.

A difficult to understand.

We think it's going to be the real impact that you say that banks will decide how what kinds of loans are gonna give that.

Ultimately what's what's the real impact I mean how might they change how they land.

The real impact will be whether it gets easier for consumers to get a mortgage -- not.

Right now home mortgage lending standards are as tight as they've been moved -- throughout the housing crisis that's the credit score you need remains high.

Surveys of loan officers say that mortgage credits not getting any easier.

Now some some of the barriers to homeownership is saving for a down payment.

But consumers also need to it'll get a mortgage and if that doesn't change it's going to be hard for people who want to become homeowners to do -- -- you think that banks will make it harder to get loans on the basis of these new regulations.

Is that -- -- saying.

These new regulations.

Could have a big impact on the legal liability banks have.

In the -- that they originate and also how much they have to keep on their books or hold against those loans again we don't know exactly.

What the mortgage standards are going to be and what those standards will mean.

And that'll really influence what the mortgage market looks like after January 10 thanks for coming on tonight appreciate your time.

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