The US Census Bureau has just released news that the home ownership rate fell to 66.9 percent in the second quarter, down from 67.1 percent in the first quarter, according to the U.S. Census Bureau. This was the lowest level since 1999.
Why does this concern me? I am sure that many would say that a REALTOR wants people buying and selling homes because that is how they make their money. However, I did not become a REALTOR just because it is a great career and an excellent way to earn a living!
I want others to experience the same joy that I had when I purchased my home. I want others to experience the same feelings of satisfaction from completing little home improvement projects. I want others to feel the same way I did Sunday after cutting the grass. I want others to enjoy a glass of iced tea and smell freshly cut grass while looking at their yard. I have talked about the joys of owning a home many times before such as here and here and here. If I did not believe in the joys of owning a home, I would not be a REALTOR.
Do not get me wrong. Owning a home is not for everyone. For many years I did not own a home and was not at a point in my life that it made sense for me. If someone needs convincing that they should buy a home then I am not the person they need to talk to. It is not my philosophy to convince someone to buy but instead to help those that have already made this important decision on their own with no influence from me.
Lately, I have read several articles such as this one and especially an excellent article here that quite frankly scare me. While I am strongly opposed to the very policies that created the real estate market to tank, I do not understand why there would be a push by politicians and policy makers against what I see as a positive and good thing:
Owning Your Home
There is no doubt that many of the loose lending practices have been corrected, and probably have been over corrected. But do we need or want to discourage people from owning their homes? And because of my distrust of the government (I ask that you put your tin foil hats on), I wonder why or what is the real reason behind this shift in policy?
Could this shift mean that far fewer people will be able to purchase a home and the incentives for owning will shift to making renting more attractive? And again, I ask why? Are we going to return to the days of requiring huge down payments that will essentially eliminate many from the pool of potential home owners? Will this change in policies really benefit more Americans? Or benefit only a few?
Is the government's shift in policy going to mean that only the rich will be able to buy a home? Or is this the whole point of these changes? Shouldn't the government work to ensure reasonable housing affordability goals so all qualified borrowers can enjoy owing their home? And by that I mean everybody, including low- and moderate-income households? Why can't everyone have an opportunity to realize the dream of home ownership?
If a person has the good credit, the required down payment and necessary income, why shouldn't they get a mortgage? Just because the bank is not making a $500,000 loan does not mean that borrower is any less responsible or worthy. I know the banks claim they do not make enough money on the smaller loans but that is economic discrimination in my book. When the bank is getting over twice the interest from borrowers that they are paying for savings accounts, save the not making enough money BS for someone else!
Yes, I agree that some changes were and still are needed. Changes were needed to ensure affordable mortgage rates for qualified borrowers with easy to understand terms and an elimination of the predatory loans that caused so many of the problems in the recent past. Without a doubt we should have sound underwriting standards. I feel that mortgage originators need to verify the borrower’s ability to repay the loan based on all its terms, including taxes and insurance. I mean that is just good business and it seems ridiculous to me that it was not the way things were in the past.
Look Before You Leap!
The abusive lending and the tsunami of foreclosures from it have eroded the public's confidence in the nation’s housing system. And it is very understandable that we need to make some changes. Changes were needed to correct some of the problems but a complete overhaul is going to cause more harm than good in my opinion. We need to deliberately & cautiously reform the U.S. housing finance model. This is why we need to look before we leap as it were, and think about changes long and hard before implementing them. I am not suggesting that I know the solutions. I just know that going nuts and changing everything you can all at once is not good.
I don't know about you, but I think we had to make some changes to prevent jerks from pulling any more schemes with mortgage related securities! We need to work on transparency and soundness with respect to the disclosures and structuring of mortgage related securities. Not on making it harder for the average American to buy a home in my opinion.
And if the pool of potential homeowners is greatly reduced, many feel that this will mean that real estate prices will fall! Why is the government wanting to further erode the housing market? Why would any elected official or government official want housing prices to fall or the economy to get worse? Unless there is an ulterior motive (my tin foil hat is still firmly in place).
As much as I have personal feelings about the joy of owning a home, I think many people will agree that a strong housing market is part of the foundation of our economy. Many businesses have developed from it, and many more thrive because of it. In nearly all of our economic downturns, it has been housing that has pulled us through. If housing is hurting so is America. I know so many people that depend on housing to make a living, and i am not just talking about REALTORS! Should more lives be destroyed by changing governmental policies and laws in an effort to over correct for past mistakes?
Without a doubt, the current housing finance system is not good. Not good at all! But we must make changes that do not further erode consumer confidence and destroy the housing market with unnecessary or over zealous policy changes.
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