President Barack Obama participated in a live broadcast mediated by Zillow CEO Spencer Rascoff on Wednesday about housing affordability in America. The President spoke on HARP 3.0, the housing market, rising interest rates, and the future of Fannie Mae and Freddie Mac.
The interview-style broadcast, in which Obama took questions via social media, shed some light on the future of HARP 3.0. The President said that Congress will try to push forward HARP 3.0 starting in September upon their return from summer recess. He stated, “Let’s see if we can potentially even get this done by the end of the year.”
President Obama went on to say that it’s important for Congress to push forward HARP reform. “Let’s not just let a few people refinance,” Obama said,” Let’s allow everybody who is potentially eligible to go ahead and refinance. It can end up being the equivalent of a $3,000 tax cut.”
This comment is a hopeful sign, especially for the many homeowners whose loans are not backed by Fannie Mae or Freddie Mac. According to Rascoff, about 10% of the questions that arrived through various social media channels were about HARP.
Obama spoke about Fannie Mae and Freddie Mac for a substantial part of the 30-minute web broadcast. He said that the goal was to phase in private industry over the coming years. Private lenders would need to offer fair, affordable 30 year fixed mortgages, much as Fannie Mae and Freddie Mac do now. This would scale back the role government has in the housing market.
He said that the government was never meant to have this much hand in the housing market, and a reduction in the size of Fannie Mae and Freddie Mac would be a return to times prior to the boom and bust. These semi-government corporations reap the profits from the mortgage market, Obama said, but ultimately the tax payer is on the hook for losses.
Obama also spoke about issues that are related, but peripheral, to the housing market, such as the high cost of student loans, and immigration reform. He said that the parents of Millenials had money to put down on a home, but now their children are using that money to pay off student debt.
He also said that immigration reform could benefit communities where housing prices have fallen. More people would be able to buy homes in those communities, adding to the overall economy. He stated that immigration reform could add upwards of $1 trillion to the economy.
When asked about rising interest rates, the President said that the housing market is still robust, and many areas such as Phoenix and Las Vegas are seeing good price gains despite the uptick in rates. Rascoff added that rates in the 4’s are historically very low.
Obama also shared personal details of his own homeownership journey, stating that he and Michelle lived with Michelle’s mother to save for the down payment on their first home. He said they purchased a condo and lived in it for 10 years while they saved and built equity to buy a single family detached home.
President Obama ended the interview by talking about the Consumer Finance Protection Bureau, or the CFPB. He said this organization has focused on the mortgage market, helping consumers get a fair deal, and working toward lender transparency.
The housing market and housing affordability have been two of Obama’s top priorities during his presidency, and for good reason. There seems to be never-ending demand for purchase and refinance programs that help consumers get into homes and save money. Today’s live broadcast was another step toward offering current and hopeful homeowners more ways of buying and refinancing their homes.