According to an article I read on HousingWatch.com, Obama and his Administration are tackling the housing market with the intent to discourage homeownership and encourage affordable rentals. Unlike their predecessors, they are contemplating walking away from the longstanding policy of encouraging homeownership towards encouraging affordable rentalscombined with "sustainable homeownership" by winding down "some government backing for home loans, but increase the focus on affordable rentals."
They are expecting these changes to lead to a more stable housing market eventually but it can have a major impact on the economy, homeowners, renters and borrowers:
- higher down payments;
- higher interest rates;
- less government backed home loans;
- more barriers to lower-income buyers;
- fewer buyers; and
- and fewer homeowners.
The NAR in its Social Benefits of Homeownership and Stable Housing writes:
- During the war years President Franklin Delano Roosevelt once said that a nation of homeowners is unconquerable.
- Margaret Thatcher, with a mantra that homeowners become responsible citizens, privatized and moved 1.7 million families from public housing into private ownership.
- President Bill Clinton has stated his belief that homeownership and decent housing are an essential part of the American Dream and wanted to make the dream of homeownership a reality for all Americans.
- President George W. Bush has said ownership has the power to transform people. Thus, the promotion of homeownership has been an integral part of President Bush's vision of an "ownership society."
- Even in the earliest days of civilization, before the collection and touting of statistical data, Aristotle had argued that ownership promotes virtue and responsibility.
The Federal Housing Administration, Federal Home Loan Banks, and Fannie Mae were all created during the Great Depression, the worst economic crisis our country ever faced. Lawmakers back then understood the value of homeownership in fostering communities, creating social stability and building wealth over the long term.
As written in the Social Benefits of Homeownership and Stable Housing, research and studies have shown the positive social benefits of homeownership, including lower juvenile delinquency rates, lessens welfare dependency, lower teen pregnancy rates, and higher student achievement among children of homeowners versus that of non-owners of similar socioeconomic background.
Many homeowners are underwater, owing more on their mortgage(s) than their house is worth to sell in today's market. However, buyers who bought within their means with the intent to stay in their homes (who suffered no financial setbacks like loss of job or reduced income) for more than a few years have the opportunity to build long-term wealth. Homeownership is a sound financial investment that historically outperforms the stock market in building long-term wealth. A fixed-rate mortgage may be for 30 years; but renting is forever.
As agents, where does that leave us now that the Obama Administration is looking to discourage homeownership and replace the American Dream of Homeownership with Affordable Rentals?
How do we support the housing industry, the American Dream of Homeownership when the President of the United States and is discouraging homeownership?
The NAR needs to take a stand on this and protect the American Dream of Homeownership! Can this really be the end of the American Dream of Homeownership?
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