Home / Daily Dose / Homeownership Re-enters Political Discussions
Print This Post Print This Post

Homeownership Re-enters Political Discussions

saving-homesWhile the two major party presidential candidates have not said much about housing policy in the months leading up to their parties’ respective national conventions, housing is suddenly moving up on the priority list of lawmakers and industry stakeholders.

A group of lawmakers, policymakers, and thought leaders gathered in Philadelphia at the Democratic National Convention to discuss housing policy choices facing the next Congress and administration in an event titled “Under Construction: How Will the Next President Remodel Home Lending?” The group included two U.S. Congressmen, Rep. Brad Sherman (D-California) and Rep. Michael Capuano (D-Massachusetts); Anne Fadullon, Director of Planning & Development, City of Philadelphia; and Susan Wachter, Albert Sussman Professor of Real Estate, Professor of Finance, The Wharton School; Co-Director, Penn Institute for Urban Research, University of Pennsylvania.

Increasing the U.S. homeownership rate, which is near a five-decade low, was a focal point of the discussion. Wachter tweeted, “24% of 18-24 yr olds are owners & an almost equal % are living at home w their parents..an historic high” and “We don’t have the option of doing nothing. . . Fannie and Freddie are on a timeline to closing.” The capital buffer for Fannie Mae and Freddie Mac is required to be reduced to zero by January 1, 2018, at which point taxpayers will be on the hook for any losses they may incur if they are still under conservatorship of FHFA.

 

 

Mortgage rates hovering above record low levels are helping the homeownership rate somewhat, but housing has been constrained by consistently low inventory. Not only that, the low rates are encouraging many who are already homeowners to refinance rather than move and buy another house. Still, “Anything that keeps interest rates on mortgages lower...that's a salient political issue for homeowners,” Capuano tweeted.

Homeownership remains an impossibility for some families for a variety of reasons, chief among them inability to save for a downpayment or bad credit (or no credit). Fadullon tweeted, "Huge % of our pop. for which homeownership is completely out of reach & they just want a place to call home” and “We have...an affordability issue combined w a poverty/income issue in Philly.”

 

 

In order to encourage more first-time buyers to enter the housing market, Sen. Ron Wyden (R-Oregon) earlier this month that would provide first-time buyers with a refundable tax credit equal to 2.5 percent of the home’s purchase price for homes purchased for less than $600,000 (maximum credit of $10,000).

Participants in the discussion were skeptical of this, however. Sherman tweeted about Wyden’s proposal, “To GOP ‘Tax credit to accomplish the same goal is a smaller sin’ than ‘spending money to help people.’” Nevertheless, he said, increasing the homeownership rate is critical, because “The way into the middle class for many people, including me, is homeownership.”

About Author: Kendall Baer

Kendall Baer is a Baylor University graduate with a degree in news editorial journalism and a minor in marketing. She is fluent in both English and Italian, and studied abroad in Florence, Italy. Apart from her work as a journalist, she has also managed professional associations such as Association of Corporate Counsel, Commercial Real Estate Women, American Immigration Lawyers Association, and Project Management Institute for Association Management Consultants in Houston, TX. Born and raised in Texas, Kendall now works as the online editor for DS News.
x

Check Also

Housing’s Impact on Economic Growth

Some key indicators are pointing to a recession in the near future, but according to recent data, housing remains strong.

GET YOUR DAILY DOSE OF DS NEWS

Featuring daily updates on foreclosure, REO, and the secondary market, DS News has the timely and relevant content you need to stay at the top of your game. Get each day’s most important default servicing news and market information delivered directly to your inbox, complimentary, when you subscribe.