Homeownership has been stifled since the housing market meltdown by an historic foreclosure crisis, high unemployment and a growing number of families turning to rentals to ride out tough times or as a result of insurmountable hardships.

‘American Dream’ of Owning a Home Falls to 18-Year Low, Data Shows

‘American Dream’ of Owning a Home Falls to 18-Year Low, Data Shows

'American Dream' of Owning a Home Falls to 2-Decade Low

President Obama is promoting “a better bargain for the middle class” in speeches this month. The “bargain” includes helping more Americans realize homeownership. (photo: Whitehouse.gov)

The housing market recovery has lifted home prices and sales of new and existing properties — but it has failed to revive the rate of homeownership, which peaked at a record 69.2 percent in 2004.

The new U.S. Census figures released this week show homeownership dropped in the second quarter to an 18-year low of 65 percent.

That rate — an indicator of how many families are realizing what had been known as the “American Dream” — is now where it was when President Clinton was in his first term.

Homeownership has been stifled since the housing market meltdown by an historic foreclosure crisis, high unemployment and a growing number of families turning to rentals to ride out tough times or as a result of insurmountable hardships.

In coming days, President Obama will promote his “Better Bargain for Middle Class Jobs” campaign, a string of strategies to lift the economic plight of Americans, including helping families to purchase or keep their homes.

The president continues to push for allowing a broader range of “underwater” borrowers to refinance their mortgages, despite owing more than the worth of their homes.

But with homeownership on the decline, is it too late to reverse the trend, especially as mortgage rates have reversed course away from historic lows?

Richard Barrington, of Money Rates, told Foxnews.com that homeownership is returning to more reasonable levels. He also said that the federal government should not push consumers into buying homes they can’t afford.

“In the heat of the housing boom, mortgage lenders pushed the envelope too far in terms of whom they allowed to qualify for a mortgage,” Barrington told FoxNews.com. “A more selective population of homebuyers should also be a more stable one.”

Meanwhile, the housing industry has been pushing lawmakers to soften mortgage standards to facilitate home purchases for more consumers while prices and interest rates are still affordable.

However, the government must weigh helping borrowers on one hand, while protecting the housing industry from another crisis on the other.

The Consumer Financial Protection Bureau finalized several mortgage rules in January 2013.

Of those, the Ability-to-Repay rule protects consumers from irresponsible mortgage lending by requiring that lenders make a reasonable, good-faith determination that prospective borrowers have the ability to repay their loans.

In May, the CFPB released final amendments for the ability-to-repay rule, creating exceptions for small creditors, community development lenders and housing stabilization programs.

Said David H. Stevens, CEO of the Mortgage Bankers Association, following the amendments: “We are particularly pleased at the adjustments made to the rule as it relates to smaller lenders, regardless of business model, that will allow them to continue to provide the safe and sustainable mortgage products that they are currently offering their borrowers.”

However, the apartment housing market is thriving, as more consumers leave homeownership behind in favor of rentals.

Commercial and multifamily mortgage origination volumes during the second quarter of 2013 were 7 percent higher than during the second quarter of 2012, and a sharp 36 percent higher than during the first quarter of 2013, according to the MBA’s latest update on this market released this week.

“The apartment market continues to be the belle of the ball, with multifamily mortgage originations running 31 percent ahead of last year’s first half total,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research.

 

 

1 Comment
  1. Doesn’t Obama and the government realize that the people who foreclosed on their home CANT get a loan!!!!! the guide lines are minimum 3 years from the date of foreclosure and then you have to jump thru hoops to get the loan. We can get a loan until April of 2014 because our foreclosure took so long. It was April of 2011 and we had a contract on the house and the bank denied and it went to foreclosure – they got less from the sheriff sale than the contract for the short sale… So.. it is only logical that people are renting because they HAVE to.. What they have to do.. is offer programs to people who have had the foreclosure and take it by case by case… because I am certain most people did NOT want to foreclose.. but were forced to.. and to know that the mortgage practices were corrupt and turned the other way when people were asking for help.. it just drives me crazy!!! Sending a settlement saying yes we know we did not help you and you still cant get a loan until the time is up..and then they wonder why people are not buying homes or the housing market is gearing toward the renters.. and the kicker is… rent is so high because it is in demand -its hard to save money. and the loan wont be easy to get .. it seems like a vicuous cycle.. trying and trying to own your own home again… If there is a program out there that does not require 3 years .. please respond because I have called around and researched it… and that’s what I get!!!

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