Many Americans believe that the only way the housing market will recover soon is if the federal government takes an aggressive role in its improvement. That will require a sea change in the way the government has approached the problem so far. The Obama administration’s modest programs have had modest results. Its flagship Home Affordable Modification Program has helped only 700,0000 homeowners with permanent alterations to their mortgages.
A new Gallup poll shows that:
The majority of Americans, 58%, prefer that the government act to prevent foreclosures, whereas 34% prefer the housing market resolve its problems on its own. A sharp partisan divide exists, with 76% of Democrats and 61% of independents favoring government action and 64% of Republicans opposing it.
Since so many Americans are homeowners who have watched the value of their homes drop — in some cases sharply — the poll’s conclusion is predictable.
Gallup’s researchers point out what is also already obvious. Home value improvement will not take hold until unemployment improves. Unemployment will not improve until American consumers and businesses increase their economic activity. Both groups continue to be concerned about the future of the U.S. economy. That circle still has not been broken.
The investment that government would have to make to have a meaningful impact on the housing market would be colossal and incalculable. Research firm Zillow reports that home values fell by $681 billion in 2011. How even part of that hole could be filed is nearly beyond imagination.
It is only natural that Americans would like to turn somewhere other than the free markets to fix the home-value disaster. But the solution will have to come through those free markets. It is too large for the government to afford an intervention.
Methodology: “Results for this Gallup poll are based on telephone interviews conducted Jan. 5 – 8 and Jan. 14 – 15, 2012. Each poll included a random sample of 1,000 adults, aged 18 and older, living in the continental U.S., selected using random-digit-dial sampling.”
Douglas A. McIntyre