A press release from the National Association of Home Builders has expressed disappointment over the jobs speech delivered on Thursday evening by President Obama. The speech touched on a number of ideas for trying to create more jobs, but the housing market, a crucial part of the U.S. economy was not even mentioned.
Housing is one of the largest single components of the nation’s gross domestic product, and according to the press release, accounts for about 18% of GDP in “normal” times. It is estimated that building 100 homes creates 300 jobs, produces millions of dollars in income for workers and generates about 9 million dollars in tax revenue for local governments.
But the much touted speech on jobs did not even include mention of a tax break for home buyers, which was used effectively during 2009 and 2010, but was allowed to expire in July of 2010. The tax break helped revive the housing market somewhat, but since it’s expiration, home prices have continued their downward slide.
The Obama administration’s housing agenda seems to be more in favor of renting than buying, and they have previously released statements supporting consideration of renting over buying. There are currently ongoing discussions about using HUD foreclosures as rental property.
It seems that the administration simply has no new ideas for the housing industry, and is more focused on building roads, bridges and schools instead of housing. Then again, housing is not thought of as a heavily unionized business model. Perhaps this has been a factor in the choice to focus on jobs in other sectors of the economy, in spite of the traditional importance of housing to the U.S. economy.
NAHB President, Bob Nielsen, a home builder from Reno, Nevada said in the press release:
“Housing has traditionally led the nation out of past recessions and needs to be playing a far bigger role than it has so far in today’s lackluster recovery. That won’t happen until federal regulators move to end the credit freeze for new home production, banks allow qualified home buyers access to affordable home loans and policymakers acknowledge there is a clear need to support homeownership and get housing moving again to spur growth, create jobs and restore consumer confidence.”