Politics

August 6, 2013

Obama pitches mortgage overhaul as housing rallies

The president proposes a broad overhaul of the nation's mortgage system, including replacing Fannie Mae and Freddie Mac.

By Julie Pace / The Associated Press

(Continued from page 1)

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President Barack Obama waves to the crowd as he arrives to speak about housing Tuesday at Desert Vista High School in Phoenix. Afterward, the president headed to Los Angeles to appear on "The Tonight Show with Jay Leno."

The Associated Press

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President Obama's plan would phase out Fannie Mae and Freddie Mac, replacing them with a system that relies on the private sector to buy mortgages from lenders.

AP

The nationwide housing recovery has been providing critical support to the economy at a time when manufacturing and business investment have stagnated. Steady job growth and low mortgage rates in the past year have also fueled more home sales. The increased demand, along with a tight supply of homes for sale, has pushed home prices higher and encouraged builders to start more homes and create more construction jobs.

Seeking to highlight the broad impact of the housing market, Obama opened his stop in Phoenix with a tour of Erickson Construction, a company that makes building frames for homebuilders in three western states. The White House said the company's workforce has expanded from less than 100 employees at the depths of the recession to more than 580.

Just two years ago, the region was in the throes of the worst housing collapse in the country, with prices down nearly 60 percent from their June 2006 peak and banks foreclosing on 70,000 homeowners a year. While the current median home price remains below peak, the levels have risen 66 percent from September 2011. Buyers are plentiful and homes for sale scarce, leading to bidding wars for resale homes.

At the high school in Phoenix, students in the audience interrupted Obama with a rendition of "Happy Birthday;" the president turned 52 on Sunday.

"I'm now 52, and Michelle says I don't look a day over 51," Obama quipped.

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