President Barack Obama's recently announced jobs plan doesn't address problems in the one sector of the economy that threw the country into recession and remains the one area that can really put the nation back on the path to recovery — housing, says Moody's Analytics Chief Economist Mark Zandi.
"That's probably the biggest missing ingredient here," Zandi says, after reviewing Obama's proposed $447-billion package of tax cuts and infrastructure spending, the Los Angeles Times reports.
Many Americans are in foreclosure or owe more on their houses than they are worth, which is seriously hampering recovery in that millions cannot demand as much as they used to or sell their homes to start new jobs.
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The housing meltdown wiped out more than half the $13.5 trillion that homeowners had in equity in early 2006, the Los Angeles Times adds, citing Federal Reserve data.
Plus construction on new homes remains weak, which is also hampering economic recovery.
Add to that, financial institutions are still reeling from the housing bust and ensuing recession and are lending less.
"Housing — it's not the American dream, it's the nightmare," says Karl E. Case, co-founder of the Case-Shiller home-price index, the newspaper adds.
Others agree that challenges remain.
"There's still a huge pipeline of homes that are going to be foreclosed upon, and the weak job market certainly isn't helping," says Scott Brown, chief economist at Raymond James, in St. Petersburg, Florida, according to Reuters.
"One of the big concerns is you've got a lot of homes where the mortgage holder is still underwater and most of those homeowners will continue to make payments."
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