Politics Counts: The Housing Industry’s Waiting Game
As Washington debates how to fix the economy, one essential piece of the puzzle, the housing market, remains a drag.
At its go-go peak in 2005, the residential housing industry made up about 19% of the national gross domestic product. After the housing crunch and the foreclosures that poured into banks, the industry’s percentage of GDP dropped sharply. In 2010, the industry was down to about 15% of GDP. It has improved since, but is still limping along.
This week saw a few more pieces in the housing turnaround effort fall into place, including the billion-dollar settlement of some banks over their housing practices and new rules for mortgage lenders from the Consumer Financial Protection Bureau.
But despite the best efforts of policy makers, greasing the skids for a housing recovery presents some unique challenges for Congress and the Obama Administration. And a big part of any turnaround equation may simply involve waiting. The housing collapse wasn’t just a hiccup or a temporary correction, it created long-term problems that cannot (or at least not easily) be turned around by administrative or legislative fiat.
For the rest of this Politics Counts column, please visit the Wall Street Journal's website. You'll need a subscription.