The Challenges to Homeownership in America

Good afternoon. I am honored to have been asked to share a few thoughts on the current housing and economic challenges faced by many of America’s families and communities. Since the collapse of the housing market and onset of the foreclosure crisis, the idea of and public policies to support homeownership have been under attack.
Six years into the crisis, the housing market continues to struggle, and many influential policymakers have made it their goal to significantly limit access to homeownership for the American public, in particular first-time homebuyers, borrowers of color, and low- and moderate-income families. Yet for more than 60 years, owner-occupied housing has not only been a source of pride and self-esteem for America’s families but also the cornerstone of the American Dream and the most significant and reliable source of asset building for the typical household.
The assault on homeownership can be linked to widespread misunderstanding by many key policymakers, as well as the public, on three critical housing issues:

  1. The reasons for the collapse of the housing market and the foreclosure crisis
  2. The government’s role in ensuring the availability of the 30-year fixed-rate mortgage and the to-be-announced market
  3. The current state of the housing recovery and its implications for families, communities, and the overall economy

1. Reasons for the collapse of the housing market and the foreclosure crisis
In spite of a voluminous amount of data and other information on the causes of the foreclosure crisis, there remains substantial misunderstanding and confusion about the housing market’s collapse. There are three dominant public narratives on these causes: (1) A failed experiment in expanding homeownership to households that were not prepared to accept that responsibility; (2) the Community Reinvestment Act, or CRA, forced banks to make unsound and risky loans; and (3) people took out loans they could not afford. 
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