I think the most important part of today's presidential address on housing is, in some ways, this graphic that the White House pushed out on social media today. Not so much for anything the chart says as for the fact that this is the message the administration wants to push. Houses, they say, have gotten more expensive under President Obama's watch.
Which is to say that the administration isn't pushing for any major rethink of housing policy in the wake of the crisis. The idea that the government should encourage people to make leveraged investments in owner-occupied housing and that these investments should be the cornerstone of middle-class savings is alive and well with us. Concurrently with that conceptual framework came a policy framework for the future of Fannie Mae and Freddie Mac that hews closely to a bill that's been introduced in the Senate by Bob Corker and Mark Warner. As befits a bipartisan bill this is a very moderate piece of legislation. It's a small-c conservative bill that tries to address some of the problems with the old Fannie/Freddie system but tries to achieve essentially the same goal—have the government intervene in housing finance to promote 30-year fixed rate mortgages for owner occupied housing as the normative paradigm in American life, while gesturing at a handful of ancillary social goals.
In the short-term, Obama is more ambitious looking to drive forward a handful of new initiatives to make it easier for people to refinance or for people with past distressed debt but current stable jobs to get loans. If we did everything the president suggests, it would definitely give the economy a short-term boost.
But the longer term vision is timid. From one point of view, it's reassuringly timid. The idea is to resolve some of the most egregious problems with the old system and avoid creating any massive new problems. But from another point of view it's a bit strange to come out of a massive crisis with its origins in the housing sector and the cult of homeownership and come out of it with a reform agenda that very much doubles down on that very same cult.