In honor of the first day of National Homeownership Month (so declared by President Donald Trump this week), the Department of Housing and Urban Development hosted a housing forum on Thursday, replete with an appearance from HUD Secretary Ben Carson.
During his opening remarks of the forum, entitled “A New Era of Homeownership,” Carson spoke of the importance of homeownership and HUD’s efforts to ensure that “every hardworking and credit-worthy American enjoys a fair chance at becoming a homeowner.”
Carson spoke at length on homeownership’s importance to the country and its economy, saying that homeownership has long been codified into the very fabric of the country.
“The importance of homeownership is apparent to all of us: security, certainty, safety, wealth creation, a path forward, self-sufficiency, a place to live with loved ones, to raise our families, the location of our neighborhood,” Carson said, per his prepared remarks.
“And our homes are the places that our pets, kids, friends and relatives create their world. In our homes, we live, grow and thrive as one, together,” Carson continued.
“Our Founding Fathers linked property with happiness and life itself. It is the essence of freedom, a stake in the city and the political system,” Carson added. “They saw that homeownership was as vital as commerce, trade, and community.”
In Carson’s words, homeownership is the “foundation of the economy, the spark for vast investment, lending, and finance.”
Carson also noted the improvements made to America’s housing system since the crisis.
“After the turbulence of 2008, the market has become relatively stable, secure, and sound. The system is functioning. Yes, there is room for improvement, more stability, more growth,” Carson said.
“There are still small, significant fluctuations. But the dramatic highs and lows of the past have evened out to become steady, almost predictable, a reasonably straight and rising line forward and upward on the charts,” Carson continued.
“The cycles have become less dramatic,” Carson said. “And, we are seeing good news in startups, sales, demand, labor, mortgage rates, sentiment, stocks, building, turnover, and inventory, among the many sides of homeownership.”
Interestingly, Carson went on to tout the homeownership rate as a strength of the housing recovery, even though the homeownership rate still hovers near record lows.
As Carson noted, per the latest data from the U.S. Census Bureau, the homeownership rate in the U.S. is currently 63.6%, up slightly from 63.5% in the fourth quarter of 2016 but down from 63.7% in the first quarter of 2016.
Last year, the homeownership rate dropped to its lowest level since 1965 when it hit 62.9% in the second quarter.
“In some states, homeownership is over 70%. And first-time homebuyers make up 35% of all homebuyers in the last 12 months,” Carson added.
“These figures represent more than paper, facts, titles, and mortgages,” Carson said. “We can see the hopes and dreams, the aspirations and excitement of homeownership. And we know that homeownership is the thread that runs through almost every aspect of our economy and our nation. This good news will continue.”
Carson went on to caution against returning to the lending activities of the mid 2000’s.
“Of course, there are some who find bad news in good news. That is part of the marketplace of ideas,” Carson said.
“We must listen and learn. They worry about lending patterns, down payments, rates of investment, rates of borrowing, rates of interest, and many other of the sides of homeownership,” Carson said.
“I can appreciate their concerns. We must heed worries and warnings. We must be prudent and wise, far-reaching and visionary. We want to make sure that homeownership is on solid ground, now and in the future,” Carson continued.
“We need ethical behavior, risk within smart boundaries, and best practices, personally and financially. We must follow those practices that are fair, responsible, transparent, and prudent,” Carson said.
“The bankers, lenders and investors are not playing with monopoly money. They have been entrusted with a duty to safeguard the hard-earned money of others,” Carson continued. “And we must hold them to their duties, fiduciary and otherwise, not just in words, but actions and investments. As we learned in 2008, the consequences of irresponsible behavior are national and international.”
Despite speaking at length about the market and the importance of homeownership, Carson did not touch on the impact of Trump’s budget proposal for HUD.
Under Trump’s budget proposal, HUD’s funding would decrease about 13.2% to $40.68 billion. That decrease would lead to the elimination of several community development programs, including: Community Development Block Grant Program, Choice Neighborhoods Initiative, HOME Investment Partnerships Program, and the Self-Help Homeownership Opportunity Program.
Affordable housing advocates bemoaned those proposals.
“We’re not talking about marginal cuts here,” Chris Estes, National Housing Conference president and CEO, said recently. “The budget proposes complete elimination of federal help that communities big and small rely on.”
Carson didn’t address those issues, but HUD did put out a press release earlier in the day touting Trump’s budget’s impact on the department.
“President Trump is committed to growing America’s middle class and strengthening the national housing market,” HUD said in the release. “The 2018 Budget continues to support homeownership through the Federal Housing Administration’s mortgage insurance programs, providing up to $400 billion in new loan guarantee authority. In addition, the Budget seeks $500 billion in new guarantee authority for Ginnie Mae, a part of HUD.”
Carson closed his speech with a callout to the HUD employees in the room.
“Our words and our actions are weighed, scrutinized, and evaluated worldwide, every day. That is one reason why our work is important. We represent America to the nation and the world. Your hard work matters,” Carson said.
“So this topic, homeownership could not be more important and timely,” Carson concluded. “And thanks to each one of you for your work to enhance self-sufficiency, freedom, independence, wealth creation, and the future security of American homeowners.”