Dare To Own The Dream

Newsflash!    HUD (the Department of Housing and Urban Development) has declared June as National Home Ownership Month!

Some believe the hype is a way of trying to generate better economic figures and arguments for the incumbent party to convince voters that the incumbent party deserves another four years in the White House.

According to DS News, “The housing crisis is generally regarded as over in 2016, about eight years after it began. But while mortgages are performing better and the default space occupies a much smaller portion of the mortgage industry than it did at its peak six years ago, one troubling stat lingers.”

What is the one statistic that undermines the claims that the housing recession is over?     To put it bluntly, HOME OWNERSHIP RATES stink.

Generally ranked according to surveys of industry experts, the reasons for diminishing interest in home ownership are:

1.   Over-regulation.   (This issue is worthy of your consideration.   You have Donald Trump saying he will wipe away the Dodd-Frank legislation and President Obama warning that the loss of Dodd-Frank would  wipe away “reforms” and “protections”.    How you define “protection” is important.   Is the free market or is government the better judge of  when and for whom home ownership is right?  Which was the predominant cause of the crash of 2008:  (1) Free Market Lending;  or (2) the government’s prior edict in ’80’s by the Community Reinvestment Act forcing lenders to make risky loans?).
2. Low Inventory.    (Are sellers paranoid about being able to qualify for a “move up mortgage” in these over-regulated times?  Better to keep the house you know than to risk not being able to get the house you want?)
3. Affordability.   (Low inventory has created a price increase that has out-paced income growth.  Job insecurity in our tepid economic recovery leaves potential future home owners on the sidelines)
4. Student Loan Debt.

The Article is just one opinion as to why the American Dream of Home-ownership is so elusive right now.    Among those In the camp of  opposing points are Realtors who depend at least a little on being home-ownership cheerleaders to maintain their livelihood.   The group also includes the big government advocates.   One other interesting point of view  in the camp is that of the anti-Gentrification lobby.   As more towns become cities and medium cities become big cities, older housing generally gives way to revitalization and the building of newer homes.     Often, this has the effect of displacing long time residents, who like the Reluctant Sellers mentioned in #2 above, and despite the fact that the existing housing may be blighted and unsafe, may not want or be able to afford the risk of finding replacement housing.    There are no easy solutions.   As  President John F. Kennedy stated, “a rising tide lifts all boats.”   We can hope that the restoration of economic health in America will alleviate some of these problems.  On the other hand, many conservative politicians since President Kennedy have noted that, to paraphrase, “too much government can sink all boats.”