Monday night's GOP debate included a brief mention of Florida's housing market struggles, but debate stars Mitt Romney and Newt Gingrich seemed to spend more time trading personal attacks than addressing the enormous loss of wealth and financial instability the housing crisis has caused in Florida.
But while the nation's housing crisis has largely taken a backseat to other issues in the 2012 campaign cycle, experts say candidates would be wise to start paying a little more attention to the impact the housing market meltdown has had on "battleground" states where primary showdowns loom.
According to a recent report by the Progressive Policy Institute, 15 of the 16 battleground states saw an average home value drop of more than 16 percent since October 2008. Three of those states—Florida, Nevada, Arizona—saw drops of more than 30 percent in median home prices.
Here's a look at home value declines in other battle ground states:
Source: Zillow Home Value Index, Progressive Policy Institute
Since 2006, Americans overall have lost almost $7 trillion in housing wealth—more than half of the nation's total home equity, according to the Federal Reserve—and as many as 12 million homeowners owe more on their mortgage than their home is worth.
The long and short of it is that Americans are suffering, and job loss is only half of the story. Fewer than 1 in 10 Americans are unemployed, but 2 in 3 American households own a house. "Arguably, home values directly affect more Americans than the unemployment rate," the report says, also noting that housing and housing-related industries make up 17 percent of the nation's economy.
"The direction that home values take will be a key indicator of Americans' future confidence," the report says. That confidence is crucial because it closely mirrors the spending America's consumer-based economy so heavily depends on.
Still, a single election and a single candidate can't solve the gargantuan challenges the housing market faces. Policymakers should resist a quick-fix "solution" that puts too much of the burden on banks or "irresponsible homeowners," authors of the report Jason Gold and Anne Kim argue, who instead suggest a multi-pronged approach including shared-appreciation mortgages and nixing the 20 percent down payment requirement being debated as part of the Dodd-Frank Act.
Shared-appreciation mortgages would give struggling homeowners a break by reducing the principal they owe, while not handing lenders the short end of the stick, Gold and Kim argue. Lenders would be entitled to a share of the home's appreciation when sold.
The prickly issue of Dodd-Frank's 20 percent down payment requirement would severely hobble an already wounded housing market, Gold and Kim say, and "would unnecessarily stifle demand for housing and burden prospective buyers."
Months of campaigning lie ahead, but while Americans are digesting what the presidential candidates have in mind for restoring the economy, they'll likely be keeping just as close an eye on home values and their own economic security.