FACT CHECK.: Obama’s speech in Phoenix

azcentral reports

Obama’s remarks in Phoenix Tuesday focused on housing and the economy. Here’s a look at some of his claims on everything from the tax code to the impact of immigration reform on homeownership, and whether they’re accurate.

OBAMA: “And even though we’re not where we need to be yet, Phoenix has led one of the biggest comebacks in the country. Home prices have risen by nearly 20percent over the last year. New-home sales are up by more than 25percent.”

FACTS: Phoenix has led one of the biggest housing comebacks in the country. One of the reasons why the comeback in Phoenix has been so great is that the housing market in the Valley collapsed so dramatically. That means the recovery has been especially robust. Monthly housing numbers jump around quite a bit from month to month, but the figures Obama cited are generally correct. According to the May housing report put out by Mike Orr, director of the Center for Real Estate Theory and Practice at the W.P. Carey School of Business at Arizona State University, prices were up 22percent and new-home sales were up 16percent. In April, prices were up 23percent and new-home sales were up 27percent. 

OBAMA: “We’ve helped millions of Americans save an average of $3,000 each year by refinancing at lower rates, and we’ve helped millions of responsible homeowners stay in their homes.”

FACTS: According to a Columbia Business School study, published in June 2012 on the school’s website, Obama’s $3,000 estimate is not far off. “We expect mortgage payments to fall by about $35billion, benefiting about 13million borrowers (about $2,700 average savings),” wrote researchers Alan Boyce, Glenn Hubbard, Chris Mayer and James Witkin in the report. Ginna Green of Center for Responsible Lending, a nonpartisan research and policy organization, agreed that the figure “sounds about right.”

OBAMA: “Fixing our broken immigration system — it would actually help our housing market. It’s pretty simple. When more people buy homes and play by the rules home values go up for everybody. According to one recent study, the average homeowner has already seen the average home boosted by thousands of dollars just because of immigration. ... This could help home ownership here.”

FACTS: Some immigrants in the country illegally managed to get mortgages and buy their own homes using Individual Taxpayer Identification Numbers issued by the IRS. But many undocumented homeowners sold their homes or defaulted on loans when the economy collapsed and immigration-enforcement laws made it harder for them to get or keep jobs. 

The loss of undocumented homebuyers contributed to the housing crisis. But experts say immigration reform would provide a boost to the market. 

A report by the National Association of Hispanic Real Estate Professionals estimates that if the Senate immigration bill were to become law, 3million undocumented immigrants who achieved legal status would eventually become homeowners. Jed Kolko, chief economist at Trulia, an online residential real-estate site, said immigration reform would boost the housing market by creating more households who would buy houses or rent. 

Immigration reform would create more households in two ways, he said. It would make it easier for immigrants to come to the U.S. legally, and those immigrants would eventually start families and buy or rent houses. It would also legalize undocumented migrants, which would provide more economic security, giving them an incentive to buy houses. The increase in immigrant homeowners would help offset a lag in household formation caused by the recession as children continued to live with parents or roommates rather than buying houses, Kolko said.

Dennis Hoffman, professor of economics at Arizona State University’s W.P. Carey School of Business, agreed. Fixing immigration would open labor markets, which would bolster the economy and increase economic opportunity, which spur more people to buy houses, he said.

OBAMA: “And our deficits are falling at the fastest rate in 60 years.”

FACTS: It’s true that deficits have dropped in recent months, but they’re projected to rise again in coming years. More to the point, the nation’s overall debt, or the accumulation of all annual deficits, continues to grow and now stands at about $17 trillion, which will require congressional action this fall to raise the debt ceiling, according to the Congressional Budget Office.

OBAMA: “We changed a tax code that had become tilted in favor of the wealthiest at the expense of working families.” 

FACTS: The tax code changed at the start of this year, but it’s hard to argue it had been tilted in favor of the wealthiest at the expense of working families. The wealthy did, and continue to, pay taxes at higher marginal rates than less-affluent families. Starting in January, that gap between the tax rate paid by the wealthiest and the rate paid by those with lower incomes widened.