The crux of his call, however, will be for more mortgage refinancing, which is, ironically, harder now that mortgage rates are rising. Rates are rising because the Federal Reserve is signaling that it will stop buying mortgage-backed securities now that the economy is improving.
Applications to refinance are already down nearly 60 percent from a year ago, according to the Mortgage Bankers Association. Mortgage rates on the 30-year fixed rose from 3.5 percent in May to nearly 5 percent in July, settling now around 4.5 percent.
The government’s Home Affordable Refinance Program has been successful, allowing more than 2 million borrowers, some with negative home equity, to take advantage of lower rat, but only borrowers with government-backed mortgages qualify.
That has left millions of borrowers out. Obama has pushed for more refinancing in the private mortgage market and will call for it once again. Senior administration officials, however, admit that “the window is closing given interest rates coming up over the last few months.”
(Read more: Homeownership may be for the few rather than the many)
The president will also push for more community-based assistance to help first-time homebuyers get into vacant, foreclosed homes.
Phoenix perhaps is not the best backdrop for this. The recovery there was driven more by private investors in distressed homes than by any government-backed mortgage rescue. Investors bought these homes in bulk and are now renting them for profit.
These same investors, largely using all-cash, pushed first-time buyers out of the Phoenix market and continue to do so in several other markets across the nation, where lower-income buyers might have been able to take advantage of distressed homes.
Obama will offer “targeted ways to make sure first-time buyers have a fair shot competing,” an administration official said.
—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.
Article source: http://www.cnbc.com/id/100940811