Fixing Housing Key to Better Economy

Congress returns next week with a number of pressing issues on the docket. One of the largest—if not the largest—is the worsening housing crisis.

You can get a sense of how important the housing crisis is to the public by looking at a question posed by Ipsos-AP on who deserves the blame for the country’s economic problems. Respondents were given a series of institutions and political leaders and asked to rate them by whether they deserved a lot, some, only a little, or none of the blame for today’s problems.

The public assigned the most blame to “mortgage lenders,” with a majority (56 percent) saying they deserve a lot of blame. The next highest was President Bush, with 44 percent saying he deserves a lot of blame, followed by Congress (37 percent), consumers (22 percent), Wall Street (20 percent), and the Federal Reserve (19 percent).

The public, unsurprisingly, wants action to deal with the housing crisis and sees such action as central to reviving our flagging economy. A mid-January Fortune/Abt SRBI poll found that two of the top four steps Americans want taken to help the economy involve fixing the housing crisis: “Limiting rate increases on adjustable rate mortgages to keep them more affordable” (favored by 75-21) and “Helping people who can’t afford their mortgages by suspending foreclosures on houses until the economy gets better” (favored by 55-39).

Similarly, the public in an early February Gallup poll favored “instituting a 90-day moratorium on home foreclosures and freezing adjustable mortgage rates for five years” by more than two-to-one—63 percent in favor compared to 30 percent opposed. The public’s views are clear; now it’s time for Congress to act.

To learn more about housing proposals from the Center, please see the Housing page on our website.