Morning Joe | January 24, 2013
>>> at 45 past the hour, it's time now for the "must-read opinion pages." we're also going to do rattner's charts as well this block. david ignatius writes this in "the washington post ." "an idealist no more. but obama didn't get much for his post-partisan attempts to unite the country other than gratuitous swipes from republican legislators. at times over the past four years, he seemed like the past learn in washington to believe in the center, but no more. now to the politics of the agenda, of the patient, dry-eyed battle to move forward on issues
that matter to him: climate change, gay rights , economic justice and the protection of social programs. the country needs a president who can do more than advance incrementally a partisan agenda. an obama who could somehow rally the country to restructure medicare and social security so they can endure through the 21st century might be a great president. but obama moved in another direction on monday." jon meacham , is there a chance that we will see a different focus during the state of the union ?
>> possibly, but there was a chance -- i agree with david -- i think that the most important line -- actually, it's from one of rattner's charts -- is the falling household income over the last 12 years. and there was not a discussion, not a call for the kind of sacrifice that we're going to have to do to make an investment in the future because as we all know, you can cut every bit of discretionary spending, right? and that's 20% besides defense. and if we don't find a way to put our appetites in line with our means, then the american dream of the last 60, 70 years is not going to be there.
>> that blends perfectly into the charts that you made for us this morning on the housing scene.
>> yeah, actually a little bit of good news on the housing scene. as everybody knows, housing has been a big part of the economic problems we faced, a big part of the downturn. it was the collapse of the housing market that sent us over a bunch of these cliffs to start with. and it looks like finally after a few false starts that housing is really beginning to recover. so let's take a look first at what's been happening since housing prices peaked back in august 2006 . and you can see that on a national basis, they are still down about 30% from their peak. and there have been a few false starts, as i said, but i think most analysts actually feel that right in here now we're beginning to see the beginnings of an upturn. housing prices are up about 4.2% nationally year over year. the biggest increase we've seen in a while. and there's some other indicators that i'll show you that are equally promising. if you're curious in terms of best and worst markets, the best market over this period since the peak has been dallas. other markets like denver and charlotte have also been very strong. the worst market, perhaps not surprisingly, las vegas . and you've also had phoenix and miami as very weak markets, although sun belt markets that participated in the boom certainly participated in the bust without showing a lot of sign of life just yet. now, what's key to gdp are new housing starts . you build more houses, you get jobs, you get improvements in gross domestic product . and so here you can see that off of this bottom where we sat for quite a number of years, we've now had a significant almost to a million new housing starts , well below the peak and the bubble. that's actually probably a good thing in some ways. but a very significant increase that has played a role in the economic recovery. the other thing that's played a role in the housing recovery are mortgage interest rates . and this, i'm sure, is something that's of interest to lots of people who have houses. you can see, not surprisingly, that from 6.7% back at the peak of the housing market , this is a 30-year fixed-rate mortgage is now 3.38%. that is about as low as we've ever seen it. i think it's about as low as it's going to go. this is not a personal finance show, but if i were thinking of buying a house or refinancing a house to get 30-year money for 3.4% down from that 4% a year ago is a pretty good deal.
>> i was going to ask you, if someone's watching this show, that number's going to jump out at you that you should probably move now or soon. how high will it go up if you wait a year in
>> that's what makes markets, willie. we don't know. mortgage rates are starting to edge up. i don't know how high they'll go, but this is about as low as it gets. this all plays right back into gdp and into our gdp numbers. so if you look at the role of housing in gdp , you can see part of why we had this huge recession was this enormous negative drag that we got from housing , really for three straight years. and again, in the good-news support, what you see is housing now making a small -- not quite as big as it made back in the boom years -- but a small contribution of positive gdp . and combined with housing start numbers i showed you, housing sales that are going on, modestly well for the economy.
>> is there any correlation with unemployment numbers, income numbers with this trend? in housing ?
>> not directly, no. and to your point, income numbers have been weak, a little bit of strength lately, but they're generally weak. unemployment is obviously weak. but there's a huge amount of pentd-up demand. there have so few people that have been buying houses the past few years that even with those numbers still weak, there are a lot of people out there. inventory for houses is only about four months nationwide. it was a year a couple years ago. so however they're doing it, people do want to buy houses right now, and they're finding the money to buy at lower price points than they used to buy.
>> steve rattner, our personal finance editor.
>> there you go.
>> to buy now.
>> news you can use.
>> how to save the auto industry in 30 seconds.
>> we wanted to put up steve 's cell phone in case people had any more questions.
>> or if we want a mortgage.
>> steve 's house of mortgages.
>> you're not getting 3.38% from rattner, though.
>> i want to be on that side of that trade.
>>> still ahead, nfl hall of famer super bowl champion john elway going to be right here with us. we're back