This is the third instalment of my discussion of Housing, Americas Future study.[1] My intention is to summarize the various points the Bipartisan Policy Think Tank addresses through this study while I promote the involvement of mortgage professionals in the shaping of our industry.

Part 1, Part 2

Following the order of the study, TODAY IS DISCUSS THE IMPORTANCE OF A HIGH RATE OF HOMEOWNERSHIP FOR OUR SOCIETY.[2] In our country, we associate homeownership with self determination, freedom and a way to a prosperous life. In the last 50 years, we have observed homeownership rates above 60%; before the housing bust, we saw a 67.6% homeownership rate, which today stands at 64.6%. Research by the Urban Institute projects a homeownership rate of at least 59.99 for the next 16 years.

From the financial perspective, in average, the financing of a home will be the most critical decision Americans make in their life. The monthly mortgage payment and potential home appreciation of the home is the most common savings vehicle for average Americans, and the most common investment which often will help many of us secure our financial future. But after our last financial crisis, many analysts attribute Federal policies that promote homeownership to the bust. In fact, the main problem with last housing bust was the over-relaxing of underwriting standards.

One of the main factors that led to the over-relaxation of underwriting standards was the belief of never ending home appreciation by many people through the mortgage industry. In an overreaction to our mistake, we have tightened underwriting standards to a degree that may have made it difficult for responsible borrowers to access credit. This poses a risk for the growth of the housing market, and curtails the potential benefits we derive from high rates of homeownership. Therefore, the authors of this study suggest lenders and investors maintain fair and realistic underwriting guidelines that maintain credit access to responsible borrowers.

Aside from credit availability for responsible borrowers, the commission suggest the institutionalization of housing counselling as a way to promote a sustainable growing housing market. Evidence shows that if potential borrowers receive housing counselling and borrowing coaching, they are more likely to meet the responsibilities of homeownership. Borrowers who failed in their quest to become home owners can be better equipped if they give it another try.

The study was release more than a year ago, early 2013, and I would like to note that Housing Counselling has become an institution that is widely promoted by the various Federal Housing Agencies. I agree with the studys finding that as a society we associate home ownership to self determination and the pursue of happiness. It is true that home ownership requires we meet many responsibilities, but these are worth it if we want the benefits of stable communities. As we evolve into a more dynamic society, I suspect homeownership will take new forms, and the end of this chapter takes a few paragraphs to talk about these. I value the information provided by this chapter, because it prompted me to wonder how new generations will think of home ownership, the struggles of getting a mortgage, and the responsibilities of owning a home?

Do you think that younger generations will see homeownership as primary goal in life?

Do you think that a mortgage is a good savings and equity building vehicle?

> Part 1 > Part 2

1) http://bipartisanpolicy.org/library/report/housing-america%E2%80%99s-future-new-directions-national-policy

2) http://bipartisanpolicy.org/sites/default/files/BPC_Housing%20Report_web_0.pdf#page=29

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