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Can Housing Policy be an Effective Stimulus?

Changing housing policy benefits economy at a local level

The housing market predicts local economic conditions. There is a correlation between the percentage of underwater mortgages in a state (i.e., mortgages on which the homeowner owes more than his property is worth) and the unemployment rate.

“There’s no environmental review to conduct or long-delay in actually getting this into motion; underwater consumers who want to knock a few hundred dollars off their mortgages are well-incentivized to initiate, carry out and make sure this gets completed themselves. It outsources much of the bureaucratic requirements to those consumers who stand to benefit” - Mike Konczal.

washingtonpost.com

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