The other day I mentioned that FHA has declared June as National Homeownership Month with its theme of “Dare to Own the Dream”.
Well, come to find out, from my good friend (and now retired) Gerry Glavey, that this is quite common. June has been designated as Homeownership Month for many years – under both Republican and Democratic administrations.
The intent is to promote the social and economic advantages of owning a home vs renting. It is celebrated by all the agencies as well as the GSEs – it is not a HUD/FHA initiative. There had been many events conducted during prior administrations to promote homeownership during the month of June.
Leave it to Gerry to still set me straight. Thanks, pal.
So, it seems our government has been pushing homeownership for quite some time now. Have their efforts created more harm than good? Maybe they should concentrate on the economy, jobs, and wage growth and leave the housing market to good old supply and demand economics.
With homeownership now out of reach, many consumers are renting. This increases the demand for rental housing and units. Opportunities then exist for some homeowners to sell to investors to move up. That demand helps stabilize home prices providing other homeowners the opportunity to build equity.
The increased demand for rentals leads to increases in rents. This increase in rents then makes it more attractive for qualified consumers to buy. With the current low down payment programs available, and the low mortgage rates, these qualified buyers have plenty of viable options to purchase and finance a home and share in the dream.
The key is not more, low down payment programs, or the easing of credit standards, or fancy outreach programs and slogans, it’s in having more consumers able to qualify for their loans under the current lending environment. That comes from more people with god jobs and adequate incomes. That comes from a strong economy.
In the words of James Carville during Bill Clinton’s run to the white house, “[It’s] the economy, stupid”. A better economy will result in more people working, wage growth and a healthier housing market. All are needed for more people to realize their dream of homeownership.
As I said before, we need to get more consumers ready and qualified to own a home. The rest will fall into place.