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Here’s How to Fix Housing, Create Jobs & Boost the Economy

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More than three years into this economic tailspin and with no end in sight, it's safe to say most Americans are of the mind that it's time to try something new to get the U.S. economy going again. Richard Suttmeier, the chief market strategist at ValuEngine.com is among them, and has momentarily stepped away from the charts and key levels that dominate his daily routine, to make a pitch for housing.

As he points out in the attached clip, home builders peaked in 2005 and home prices have fallen by a third since middle of 2006. As Suttmeier sees it, if you help housing, you create jobs, and if you create jobs, you help the economy.

One idea he's pushing is to put more money in ''healthy homeowners pockets" by allowing them to take advantage of low interest rates. The obstacle he wants to see removed on this front is the appraisal, which currently has about 25% of homeowners under-water (or owing more than the property is currently worth) on their mortgages.

"If you allow people to refinance, regardless of whether they are underwater on their mortgage or not, that would really put a lot of money in the pockets of healthy homeowners who will spend it, and if you spend it, then you'll build more new homes and that creates quite a few jobs," Suttmeier says.

Another idea he thinks should be implemented would be to allow homeowners to move investment funds from their retirement account - without penalty or taxation - to pay down mortgages. The thought here, he says, is that people have always considered their home to be a part of their long-term portfolio and any reduction in debt would reduce monthly payments and simultaneously increase disposable income.

While this Florida-based financial whiz says he is seeing ''glimmers of hope" within the new homes segment of the sector, where home builders have record low inventories, the same cannot be said for existing homes. Not long ago, housing accounted for 17% of GDP but Suttmeier says we are "no where near that now."

Other ideas include getting banks to lower principal, as well as what he calls a ''Mortgage Mulligan plan'' that would be available to all healthy homeowners and not just those Fannie Mae of Freddie Mac financing.

In short, he says, fix housing and you will help fix the economy.