The Heritage Foundation argues here that the way to end the housing crisis is to abolish two of the primary instigators of the housing bubble, Fannie and Freddie. Instead, it seems the Obama administration is yearning to repeat the same mistakes.
In a town hall last week, President Obama remarked that “the continuing decline in the housing market is something that hasn’t bottomed out as quickly as we expected.” So what’s he planning to do about it? The Wall Street Journal reported Monday that the White House may have “taxpayer-owned mortgage giants Fannie Mae and Freddie Mac relax their rules for loans to investors” as one way to tackle the housing slump.
For those with short memories, Fannie, Freddie, and government policies aimed at making it easier for people to purchase homes is how the housing market wound up in its current state. And that state isn’t a pretty one. In the years since housing prices peaked in the second quarter of 2007, the value of household real estate has fallen by about $6.6 trillion—30 percent—and it continues to fall.
