Mark Calabria
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The most glaring absence during the hard-fought campaign between President Barack Obama and Mitt Romney was any offer of substance regarding the housing market. It was, after all, a housing bubble-driven financial crisis that helped propel Obama to victory in 2008 and recent improvements in the housing market that perhaps helped secure his re-election Tuesday night. So housing policy was always there, even if only in the background. What does the next four years likely hold for the housing market?

Well, Obama's victory means that Federal Reserve Chairman Ben Bernanke will keep his job, at least until the end of his term in 2014. That means the Fed's policy to hold interest rates at record lows will continue. While mortgage spreads over Treasuries have been elevated, mortgages overall will likely hover near historic lows over the next year, providing some upward pressure on housing prices.

Regardless of who the election winner is, the primary driver of housing policy will be the housing market. With home prices recovering in many areas and foreclosures on a slow but steady decline— due in part to rising prices and an improving labor market — Obama is likely not to introduce new foreclosure prevention programs in his second term. With Republicans maintaining their control of the House, legislative efforts to force broad-based reductions in underwater mortgage balances are essentially dead. While re-tools of Obama's signature HAMP and HARP programs are likely, those will be modest. In many ways, I believe the White House is eager to put the foreclosure crisis behind them and move on.
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Mark Calabria

Mark A. Calabria, is director of financial regulation studies at the Cato Institute.