In his sixth State of the Union speech, President Barack Obama last night pointed to the cut in the annual FHA insurance premium that takes effect later this month as the kind of “middle-class economics” initiative he wants to focus on to help build on the country’s improving economic picture.
“Things like lower mortgage premiums … will make a meaningful difference in the lives of millions of families,” the president said last night in his nationally televised address before a joint session of Congress.
Obama provided no details on the FHA initiative, but in a speech he gave two weeks ago in Phoenix, the president said the FHA premium cut would save home owners an average of $900 a year in fees. NAR President Chris Polychron attended that speech and spoke with Obama prior to it about the proposal. “I told the president we received the proposal very favorably,” Polychron said last week.
Behind that number is a 50 basis point reduction in the annual mortgage insurance premium, from 1.35 percent to 0.85 percent, that’s set to take effect January 26, according to a mortgagee letter issued by the U.S. Department of Housing and Urban Development earlier this month.
Obama framed his speech around a theme he called “middle-class economics,” which is intended to lift up working families now that the economy is seeing sustained job growth, an improved stock market, and lower gas prices.
Obama said three components were required to bring about his vision of middle-class prosperity: security for working Americans, the skills required to fill 21st century jobs, and a competitive environment for businesses looking to locate and hire workers. He offered a list of ideas from child care tax cuts to free junior college tuition to strong free-trade deals with Asia and Europe.
Obama also highlighted his position on Internet net neutrality, a policy framework backed by NAR that is intended to prevent Internet service providers from creating different tiers of service levels that would impact consumers’ online experience. “I intend to protect a free and open internet, extend its reach to every classroom and every community, and help folks build the fastest networks, so that the next generation of digital innovators and entrepreneurs has the platform to keep reshaping our world,” he said.
He also noted the careful approach his administration is taking on regulation of unmanned aerial vehicles, or drones. The Federal Aviation Administration is working on rules for the use of small UAVs for commercial purposes, although it’s not clear when the rules will be released. The president said his administration is working “to make sure our use of new technology like drones is properly constrained.” NAR supports the safe and responsible use of UAVs for commercial purposes and has worked with the FAA as it develops its rules.
Much of the president’s agenda will require congressional action, setting up some difficult legislating in the year ahead. In remarks reported in the Washington Post after the speech, House Speaker John Boehner (R-Ohio) called some of the proposals “unserious” and, in other reports, said they’re “the wrong policies.”