If I had a housing-debate bingo card, I would have tossed it out halfway through the debate. In the only debate focused solely on domestic policy, the candidates never mentioned foreclosures, refinancing, Fannie Mae, or Freddie Mac. Instead, Romney gave a shout-out to "qualified mortgages" -- which was definitely too obscure for my bingo card. What happened tonight? Two mentions of housing:
First, in his opening remarks, Obama said "housing has begun to rise." He's right: the housing market is in better shape today than when he took office in 2009. More surprising was that Romney didn't argue. Romney did point out several ways that broader economic performance worsened during Obama's presidency, but the housing market wasn't one of them. Had Romney wanted to point to the ongoing pain from the housing crisis, he could have pointed to the stubbornly high foreclosure rate in many states or the fact that the market is still not even halfway back to normal. But he didn't.
Second, Obama and Romney were more focused on preventing the next housing crisis than getting out of this one. They mentioned housing only in their brief debate over government regulation. Obama cited banks' risky lending practices in the past as reason for why regulation is important for the future. Romney got into the weeds, agreeing that mortgage regulation is important and, in fact, blamed the continued uncertainty over the Dodd-Frank "qualified mortgage" rules for banks' reluctance to lend today. (What is a "qualified mortgage," anyway? Those will be mortgages meeting standards that automatically "count" as being within a borrower's ability to repay, for legal and financial purposes.) Two cheers to the candidates for focusing on rules to prevent the next housing crisis.But that was about it for housing. There's a long list of what the candidates didn't say about housing. Not a word about refinancing, principal reductions, selling government-owned foreclosed homes, or the mortgage interest deduction -- all hot-button housing issues. Why wasn't there more debate over housing? Three reasons:
- The worst of the housing crisis is behind us. In almost every way, the housing market is improving: prices, sales, and construction are all increasing; vacancies, inventories, and delinquencies are all falling. Housing policy doesn't feel as urgent as it did two, three, or four years ago.
- Housing isn't really a winning issue for either candidate. As the incumbent, Obama needs major housing policy successes to point to; as the challenger, Romney needs compelling fresh new housing ideas to put forward. Unfortunately, neither candidate has what he needs to make housing a winning issue for him.
- Economic policy is the best housing policy. The housing market recovery depends on the broader economy. Jobs lead to housing demand; economic confidence leads to more lending and construction. Whichever candidate is better for the economy is almost certainly the better candidate for the housing market.