Presumptie GOP nominee Sen. John McCain warned Tuesday against hasty government involvement in the U.S. mortgage crisis, while both Democratic candidates have called for increased regulation of lenders. An analysts considers the state of the housing market.
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The housing problem may have begun with the subprime and foreclosure crisis, but there are big worries about the national housing market, as well.
Yesterday's report from the National Association of Realtors provided a glimmer of good news: Home sales last month posted their largest increase in a year.
But the boost in sales may have been fueled by a record 11 percent drop in single-family home prices. The realtors association reported today the national median home price fell to nearly $196,000, down 8 percent from $213,000 last year.
And with foreclosures at an all-time high, all three presidential candidates are talking about the crisis.
Both Democrats want greater regulation of mortgage lenders and want to let courts modify mortgage payments for those facing foreclosure, but Senator Hillary Clinton has gone further, calling for a 90-day moratorium on foreclosures and a five-year freeze on interest rates for subprime borrowers.
In a speech yesterday, she said all Americans are affected by the crisis.
SEN. HILLARY CLINTON (D), New York: Home prices dropped almost 9 percent last quarter, home prices for everyone. If you've paid off your home, if you have a fixed-rate mortgage with a manageable interest rate, you have suffered the steepest decline on record.
Senator Barack Obama opposes an interest rate freeze, saying it would dry up credit. And he told Gwen Ifill last week it's important to modify lending practices.
SEN. BARACK OBAMA (D), Illinois: That will provide some assurance that there's not going to be just a bottomless pit of bad debt out there and hopefully banks then and other financial institutions will start having a little more confidence and start doing the normal business that needs to be done.
Republican Senator John McCain hasn't laid out specific proposals, but he said in a speech in California today that there should be limits on government action.
SEN. JOHN MCCAIN (R), Arizona: Any assistance must be temporary and must not reward people who were irresponsible at the expense of those who weren't. I will consider any and all proposals based on their cost and benefits.
Congress is expected to take up legislation in April, but it could be months before there's an impact on the housing market.