Feds missed chance to repair housing – Trulia economist

The worst moment of the credit crisis has come and gone.

And, with it, went Washington’s political will to enact meaningful change to heal the suffering housing market and the financial condition of its homeowners, according to the chief economist at real estate data firm Trulia.

Jed Kolko said the housing market is in better shape now than in early2009, but Americans are more pessimistic about what both the presidential administration and Congress can do to get back to normal. Four years into the housing crisis, Kolko and most economists say is years away.

“In election years, politicians don’t take risks,” Kolko told HousingWire. “Election years are more talk and less action. With the economy slowly recovering, inventories declining and prices no longer plummeting, the housing market is not in enough of a crisis to force political opponents together.”

Recovery in the housing market depends on consumer confidence, and lowering defaults and foreclosures is key to rebuilding that confidence.

“Americans won’t believe our economy is improving until they see real proof,” Kolko said. “As long as there are foreclosed homes and lingering for-sale signs in neighborhoods across the country, people are faced with constant, everyday reminders that the housing market is still struggling.”

A new Trulia survey found that 57 percent of Democrats and 73 percent of Republicans believe housing will hurt President Barack Obama’s chance of reelection. With the U.S. economy still struggling, 54 percent of Americans are not confident the president can stabilize the housing market in the next 12 months. This is a notable increase since Obama took office in 2009 when only 32 percent shared this sentiment.

“Five years of the housing crisis has hardened Americans,” Kolko said.