Housing Election - Which Candidate is Better for Homebuyers?

by 12 Sep 2012
To quote a man much wiser than myself  -  it’s the economy, stupid.

(TheNicheReport) -- This is an election that has come down, tooth and nail, to pretty primal questions about economic recovery and what is best for the American taxpayer. While the 2004 election centered on questions about defense and national security, this year’s incumbent-versus-challenger dialogue has swung far towards questions of which contender is best equipped to help lift America from this economic quagmire.   While I’m not here to advocate for any particular candidate’s economic policies (and elections are not won solely on economic platforms alone), I feel it is more than sound reasoning for any real estate wonk to dip their toe in the pond typically occupied by policy wonks. Both candidates offer their own economic and tax platforms, and both candidates offer incentives and drawbacks for those keen on home purchases and real estate investments. In no prejudicial order, let’s examine our incumbent candidate:

Barack Obama assumed office only shortly after the 2008 recession began snowballing. While his first presidential run was built on a platform of social change and broad reforms diametrically opposed to the policies championed by the preceding Bush administration, lingering debt in the public coffers and private sector stagnancy have forced the national discourse in a radically different direction.   President Obama’s economic platform is much more aligned with Keynesian doctrine, which endorses limited but important input from the federal government in shaping economic policy. Keynesians are much more likely to endorse social security and social safety nets, in addition to limited business regulation and public debt relief. Barack Obama’s brand of neo-Keynesianism has won supporters ranging from economist Paul Krugman to veteran economic liberals like Senator Dianne Feinstein while building resistance from more libertarian advocates like Mark Spitznagel and congressional conservatives like Paul Ryan and Rand Paul.

However, here are breakdowns of the possible pluses that a second Obama term could provide homeowners and real estate investors:  
  • Obama supports extending homebuyer credit to those interested in purchasing their first home.
  • The Obama administration has consistently vouched for mortgage debt relief. While the evaluation of economic observers remain mixed, the Making Home Affordable Program (MHA) offers support for mortgage payment in addition to relief for those facing foreclosure and underwater mortgages.
  • The reduction of interest rates under Obama has made borrowing and loans easier to sustain, which could spell positive ramifications for those who handle their mortgages with prudence.
Mitt Romney had long been expected to emerge as the Republican contender against Barack Obama in the 2012 election, and only recent accepted the party nomination. While his ideological stances have shifted over the course of his political career, his elevating of Paul Ryan as his running mate has affirmed his platform’s allegiance with staunch fiscal conservatism. Paul Ryan has long endorsed public sector austerity measures, and brings an angle to the Romney-Ryan ticket that can be framed as the fiscal opposite to Barack Obama’s neo-Keynesianism.

Ryan’s crafting of the Path to Prosperity budget has shown him strongly in favor of loosening government regulation of the private sector, and cutting taxes for the highest-earning income bracket. Congressman Ryan’s major impetus for this position has been the belief that high-earning Americans will invest their capital in various holdings or private enterprise. Ryan has argued that this will stimulate the private sector and encourage job growth that drives away many of the post-recession woes, including a sagging housing market.   However, generalizations about the VP-hopeful’s fiscal leanings aside, here are areas in which Mitt Romney as president could provide boons to homeowners and property investors:  
  • Mitt Romney has frequently been critical of lowered interest rates. Increasing interest rates would prove a blessing for homebuyers with a high volume of personal investments.  
  • Mitt Romney broadly endorses rolling back government programs like MHA and encouraging the capital back into the private sector. Those who advocate this position (like his recently confirmed running mate) point to it as a means of stimulating the economy and overall curtailing the recession.  
  • Those who hold faith in government-exempt solutions to lifting the economic quagmire will likely take heart with Romney’s favoring of cutting targeted programs like debt relief and housing loans, and letting the private sector economic gears turn unaltered.
Whether voters usher in a second term for Obama, or a Romney presidency, it’s clear that both candidates maintain attention to America’s uneasy real estate market. Whoever ends up occupying the oval office come 2013 will quickly be forced to address our national property concerns.

This is a guest post from Harrison Stowe, a writer for NVR Inc., a homebuilder in Montgomery County, MD . Blogging about a range of real estate topics including investment, mortgages, and new construction, Stowe combines finance knowledge with experience in the current real estate market.


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