The Foreclosure Crisis That Will Not Go Away

When the financial crisis broke in September 2008, it was widely understood -- both in policy-making circles and in popular conversation -- that problems in the U.S. housing market were central to the unfolding events. But thereafter, the events themselves took center stage: and the problems of the housing sector, though not forgotten, slipped down the political agenda and off the popular radar. That was a mistake. Problems in the U.S. housing market remain central to our continuing difficulties -- problems experienced by people wanting to buy houses, and problems experienced by people who already own one. Economically and politically, a resolution of the U.S. housing crisis remains a key requirement for long term prosperity and, more immediately, for the continuation of a Democratic White House.

Economically the current recovery is slow in part because the housing sector remains sluggish. The housing sector remains sluggish because the inventory of unsold houses remains high; and the inventory of unsold houses remains high because the foreclosure crisis refuses to go away. Politically, Obama and the Democrats are losing popular support because unemployment and job insecurity are rife. Unemployment and job insecurity are rife because the economy remains sluggish; and the economy remains sluggish in part because there are still so many foreclosed homes on the market. People are losing their homes in record numbers in contemporary America, and they are doing so now on Obama's watch, not on Bush's.

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