In Obamacare, a Different Perspective, a well meaning Texas retailer advances his speculation that through the wonder that is Obamacare, fewer of our housing prospects will be forced into medical bankruptcy and a typical manufactured home retailer or stick built homebuilder might enjoy an increase of five or six sales per year. I believe our Texas retailer is well meaning with his speculation but several factors are not included in observation.
First: Having Obamacare does not mean you will be free from a risk of medical bankruptcy. Given the higher premiums being forced onto unwilling buyers along with massive deductibles, the risk of bankruptcy has in all likelihood been increased. Although we encounter very few medial bankruptcies, most of the ones I have encountered are able to find a path to home ownership because the medical burdens of the past are behind them. Under Obamacare the misleading information that premiums would drop has proven to be one more burden on the current administration as it proves to be untrue.
Second: Employers have laid off workers, decided to cancel expansion plans that would have required new workers and cut back the hours of existing workers due to the regulatory burden of complying with Obamacare. I have lost far more sales in 2013 due to these factors than a hypothetical increase in sales might have brought about had Obamacare been in place at the first of the year. We can get the bankrupt prospect past that event in their life and onto a path to homeownership. I can’t say the same for a client whose hours have been significantly reduced to the point of not budgeting for a reasonable house payment or a client who has lost their job.
Third: This same client will now be forced to purchase a federally mandated level of coverage which is an even greater drain on his discretionary income. Lower discretionary income means a lower likelihood of qualifying for the loan.
Fewer jobs, lower income, part time jobs, higher outgo, lower discretionary income will most likely not add up to an increase in business for the housing sector whether it be site built or factory built. Off topic, but to this mix you can add the new Qualifying Mortgage and other Dodd-Frank rules that will further erode sales. We need to dig in and adapt the best we can to all the changing rules that are headed our way. I respectively suggest that Obamacare will not be a boon to sales as was suggested.