As the battleground for the Republican presidential nomination moves to Florida, the key issue has become the nation’s housing crisis. Both the New York Times and U.S. News & World Report noted that as a result, frontrunners Newt Gingrich and Mitt Romney have altered their rhetoric on housing.
Romney has previously said that the best cure for the housing market is time. He’s supported a hands-off approach that allows the market to hit its bottom and then recover naturally. But immediately upon hitting Florida he declared that “it’s time to turn around” declining home values. The Times also quotes him saying yesterday “the idea that somehow this is going to cure itself all by itself is unreal.” Rather than extoll his policies aimed at remedying the crisis, Romney turned to critiquing Newt Gingrich’s highly-paid involvement in Freddie Mac, which Romney said was among the biggest factors in the bust.
Gingrich, on the other hand, has managed to avoid getting his principles and his housing policy tangled by focusing on banks. He wants to repeal Wall Street regulations, such as Dodd-Frank, that he claims are preventing smaller banks from lending to prospective buyers whose demand could help clean up the housing mess.
U.S. News & World Report used Trulia data to show the weight Florida’s housing market carries with the country as a whole, proving the importance of each candidate leaving the state with a clear policy.
“So much of the search activity we see comes from the Northeast and the Midwest, so people all over the country care about the Florida housing market,” said Jed Kolko, chief economist at real estate website Trulia. “Because the Florida housing market gets more national attention, it takes on more importance.”
Because of the depths of the foreclosure backlog in the state, Kolko said classic conservative laissez-faire policy would likely be unpopular and ineffective when it comes to housing. [NYT] and [USNews]