President Barack Obama said Wednesday that it will likely be another year or more before the housing market picks up and home prices and sales start rising.
ATKINSON, Ill. (AP) — President Barack Obama said Wednesday that it will likely be another year or more before the housing market picks up and home prices and sales start rising.
But he said Washington, lately the target of public ire, can’t make that happen on its own. He said consumers, banks and the private sector will need to help, too.
Obama spoke at a town hall in the western Illinois town of Atkinson on the third and final day of a bus tour of politically important Midwest states. His comments were in response to a question from the owner of a local real estate company, who said she had begun to see a turnaround in late spring. But her phones stopped ringing after last month’s "debt ceiling fiasco," when the government came close to defaulting on its financial obligations.
"We have no consumer confidence after what has just happened," she told the president. "I should be out working 14 hours a day and I am not."
Obama agreed that the lengthy, last-minute negotiation over lifting the debt ceiling was a "self-inflicted wound" that shouldn’t have happened. "It was inexcusable," he said.
"But moving forward, a lot of this has to do with confidence, as you said," Obama said.
He said companies are more profitable than ever, but are hoarding cash and not investing it. He said many banks have overcome their financial woes but are not lending as freely as before.
Obama said the administration is mulling how to encourage banks to start lending again, among other ideas for which he offered no specifics.
"But I’ll be honest with you, when you’ve got many trillions of dollars’ worth of housing stock out there, the federal government is not going to be able to do this all by itself, government is not going to be able to do this all by itself," he said. "It’s going to require consumers and banks and the private sector working alongside government to make sure that we can actually get the housing moving back again.
"It will probably take this year and next year for us to see a slow appreciation again in the housing market," Obama added.
He said growing the economy overall will also help the housing sector.
Obama was wrapping up a tour of Minnesota, Iowa and Illinois. He was to preside over a second question-and-answer session Wednesday afternoon with residents of Alpha, Ill., before leaving his customized black bus and boarding Air Force One to return to Washington.
Copyright 2011 The Associated Press.
(AP Photo/Carolyn Kaster)