By Staff
These are dark days for the nation's economy. Its inherent strength is being sapped by the worst housing downturn in generations.
Millions of families worry that they will soon lose their homes to foreclosure. Millions more desire to buy a home but are discouraged by a challenging mortgage market where a high down payment and sterling credit rating are far too often what it takes to get a foot in the door.
In the hardest-hit areas, existing home owners are seeing housing prices continue to drop, eroding the personal wealth they have been able to amass in home equity over the years. Recent buyers in the most devastated housing markets increasingly are seeing the value of their home fall below the amount they owe on their mortgage.
Home builders have dramatically curtailed new production and are putting most of their effort into working down unsold inventory. It's slow going, and those efforts aren't helped by the large numbers of foreclosed properties going back up for sale.
It's spring, the prime time for home buying. Mortgage interest rates are near historic lows. House prices have become significantly more affordable. But the market is in the doldrums. Consumers have lost confidence. Many have lost their jobs and many more have lost a sense of financial security in an economy that feels like it's not headed anywhere but down.
Fortunately, there is an effective solution to what ails our battered economy. For months, the U.S. Congress has been working hard to assemble a package to restore the health of housing and end the dangerous downward spiral that threatens to plunge the economy into a deep recession. Those efforts are nearing fruition. Both the House and the Senate have signed off on strong legislation to address today's mortgage credit crunch and rally home sales. They are now working to reconcile their differences and send a bill to the President's desk, hopefully before the Fourth of July.
Among the provisions that will put housing and the economy back on track:
A temporary home buyer tax credit will stimulate home buying and reduce excess inventories.
Modernization and expansion of the Federal Housing Administration will help first-time home buyers get a mortgage and payment-burdened home owners refinance to an affordable loan.
An extension in the use of business losses against past taxes will help businesses weather the downturn and make their payrolls.
Expanding the mortgage revenue bond program will help strapped borrowers who are seeking to refinance their home loans.
Reforming the regulation of Fannie Mae and Freddie Mac will increase their mission emphasis to increase the flow of capital to housing markets and provide the lowest possible mortgage rates.
The American economy is well overdue for some good news. That's why Congress needs to come through with a landmark housing and economic stimulus bill and avert the hard times that are lurking at the nation's doorstep.