The Future of Homeownership

One of the big issues left unresolved after the financial reform debate is what to do about Fannie Mae and Freddie Mac. Truth is, the bigger issue is “what to do about homeownership policy in the United States?”

Treasury and HUD pulled together a panel for a public hearing yesterday on just that question. This is big picture, complex, and meaningful work. I’d prefer to dig into it later, but if you want a quick overview, here’s Tim Fernholz on the conference:

Moving forward on housing-finance reform, there are much harder questions about how much support the housing market actually needs. The U.S. rate of homeownership is artificially inflated and not conducive to sustainable energy or employment policies; it distorts the market and hurts already underfunded and undersupplied stocks of affordable rental housing. Once a consensus on appropriate balance between supporting ownership and rentals can be found, debate will continue on any number of mechanisms to replace or modify the current housing-finance model, which Democrats have promised to scrap.

For the meantime, the Obama administration has forced everyone to admit publicly what for so long was implicit, hidden, or ignored: The government makes affordable homeownership possible, and done right, that’s a good thing.

Of course, if you don’t want a quick overview, but instead would rather dig deep, I’d recommend digging into the Mortgage Finance Working Group’s response to questions initially posed by Treasury and HUD about the future of housing finance. Our Ellen Seidman played a role in the Working Group (which was sponsored by the Center for American Progress.)

Much more to come on this front.