As a follow-up to Tuesday night’s State of the Union, Housing & Urban Development Secretary Julián Castro sat in for a fireside chat moderated by Zillow (Z) Chief Economist Stan Humphries to discuss housing challenges going forward.

The two chatted over how housing has fared since the crash, and Humphries offered his own questions along with questions submitted through social media. (Check out #HousinginAmerica on Twitter)

Most of the questions on social media came from challenged homebuyers in expensive markets on the cost of rental housing, and first-time buyers facing uphill issues like poor credit.

Castro said that the problem is that while credit got too easy in the run up to the housing crash, the pendulum swung too far to the restrictive side, and that steps are being taken to find a middle ground that ensures lending doesn’t get reckless again.

The issue of student debt also came up as a headwind for millennial buyers.

It’s notable that most of the questions came from first-time buyers since they’ve been on the sidelines, but Castro said that it’s time for them to get in the game.

 “Investment in a home is an investment in the long run in creation of wealth,” Castro said. “A confluence of better economy, wages starting to go up and gas prices going down create some breathing room for people stuck in that rut to save some money to buy that first home.”  

Castro also touched on the reverse mortgage program, promoting it for those in the right circumstances, and said that he thinks that America is close to the right level of homeownership.

“Homeownership is not going to be right for everyone out there. It makes sense for more Americans to own a home,” Castro said. “A home is often a primary source of wealth in a family. Aside from the challenge of incomes, so many Americans have a net worth close to zero. Having a home is generational way to pass that wealth on. We want people responsible enough to own a home to have that opportunity.”

Castro said that the Obama Administration promotes more private capital in the mortgage finance market, but given that Fannie Mae and Freddie Mac account for 90% of home loans and the push is to expand that, many in the industry would be hard-pressed to find examples of initiatives to get more private label capital in the market.

“Government should have a significant role (but I) think we’ll see a continued trend of more private capital,” he said. 

The video can be viewed here