eople who own their own compared with 48.2% of African
homes experience many Americans, and 49.5% of
benefits that renters Hispanics. Homes are simply not
don’t. Numerous studies have in reach of a large part of this
shown that homeowners are more population. In California in
likely to be involved in their 2007, the average monthly payment
communities, build wealth, and of new homes sold to first time
increase their educational level. buyers was over $3,000.
Owners of homes are also less
likely to be involved in crime or What’s the Goal?
to depend on public assistance.
Simply the stability offered by These numbers are what prompted
living in one place, and taking President Bush to proclaim this
pride in the ownership of one’s past June National Homeownership
home, can boost the standard of Month. He announced a goal of
living. The problem has always increasing the number of minority
been how to make homes affordable owners of homes to 5.5 million by
to those in greatest need of 2010. This will be challenging.
those benefits. Despite the current buyer’s
market, the cost of starter homes
The wealthy know that a homes’ is continuing to rise at a time
value will increase over time, when lending standards have
and can reduce their taxable tightened significantly.
income. But there is a huge
racial and socioeconomic gap that The tighter standards are a
has been slow to change. The result of both the US Congress
number of minorities who own and the National Association of
homes has increased slowly over Realtors pushing for stricter
the past few years. Yet 76% of regulations on the lending
whites owned homes in 2006, industry. An increase in
foreclosed homes in both 2006 and from losing their homes, other
2007 is attributed to lenders measures are needed. Freddie Mac
approving loans to applicants who and Fannie Mae, both government
clearly did not have the means to sponsored mortgage groups, will
support them. In addition, the purchase some outstanding
Mortgage Bankers Association sub-prime loans in order to help
reports that up to $1.5 trillion homeowners refinance and keep
in adjustable rate mortgages will their homes. The Federal Reserve
experience increases in their is currently holding interest
rates this year. While many rates steady. This makes
borrowers will simply refinance conventional mortgages more
on their homes, the tighter appealing. Finally, there are
regulations mean that many of many government-sponsored
those who want to refinance won’t programs to help minority groups
be able to. Some will face buy their first homes.
foreclosure of their homes. Ultimately, the ability of the
lower economic sector of
What’s the Plan? Americans to buy their first
homes will impact the rest of the
In addition to tighter lending real estate market.
guidelines to protect consumers
About the Author:
John Harris is a researcher and writer on real estate topics such as economics, credit improvement tips, home selling advice and home buying preparations. For more information please visit San Diego County Realtors
Read more articles by:
J Harris
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