Protecting the American Dream: Homeownership Must Remain a National Policy Priority

Published in Politico

While the nation recognized National Homeownership Month in June, the fight to protect and preserve the American Dream endures all year long. Perhaps better than any other group, Realtors® recognize and understand how homeownership has the potential to change lives and enhance futures for people from every background and in every corner of this country.

Homeownership encourages people to build roots and invest in their neighborhoods. It is well documented that homeowners volunteer, serve on community boards and are even more likely to vote in local elections. What’s more, studies have shown that the children of homeowners perform better in school and go on to earn more money as adults.

Across the U.S., real estate accounts for one-fifth of our Gross Domestic Product. That figure totals more than $3 trillion – and represents a key driver of our national economy.

Grahic: Real estate accounts for more than 1/5 of the U.S. GDP

However, homeownership can be a challenge for some consumers. Rising home prices, housing supply shortages and depressed rates of new construction are making it increasingly difficult for many families and first-time buyers to achieve homeownership.

This was true for first-time homebuyers Daphne Clyburn and Michael MacEwen. The newly-wed couple always knew they wanted to be homeowners. They started saving early for their future down payment, and had a financial plan to account for household expenses. Despite all their planning, the competitive housing market in their area made it difficult to find a home in their price range. Working with a Realtor®, they learned they were able to qualify for first-time homebuyer programs. Daphne and Michael persevered and found the place of their dreams in Maryland, not far from our nation’s capital.

Graphic: Home sales in this country support more than 2.5 million private-sector jobs in an average year

In a recent study, 9 out of 10 millennials said they currently want to buy a home despite the fact that only 4.4 percent plan to do so in the next year, thanks in part to affordability concerns and student loan debt that continues to burden a significant portion of this population. Despite all of that, Daphne and Michael are a great example of first-time homebuyers who are able to live out the American Dream of homeownership thanks to the right planning and assistance.

All across the country, America’s 1.3 million Realtors® are engaged with private partners, housing industry trade groups and lawmakers at every level of government to raise awareness about the challenges facing home buyers and to promote solutions that address critical national housing needs.

Home sales in this country support more than 2.5 million private-sector jobs in an average year. For every home sold, nearly two jobs are created. There is perhaps no sector more important to America’s economic engine than ours.

Recognizing this, homeownership has had the long-standing support of our federal government, with policymakers in Washington advancing various policies that promote responsible, sustainable homeownership for much of the past century.

Arguably the best example of the federal government’s commitment to homeownership is our nation’s housing finance system. For roughly five decades, Government Sponsored Enterprises, also referred to as the GSEs, have protected the possibility of a 30-year fixed rate mortgage while promoting a national mortgage market that ensures responsible, mortgage ready Americans like Daphne and Michael can indeed become homeowners.

With the Federal Housing Finance Agency now under the leadership of Director Mark Calabria, conversations surrounding the future – and reform – of Fannie Mae and Freddie Mac are escalating. But while unity surrounding any specific policies has yet to emerge in Washington, Realtors® have a ready-made, pragmatic and workable plan for GSE reform in hand.

Our solution is a new utility model that highlights competition and remedies the failures of the pre-crisis system, ensuring market oversight without regulating away from free market growth potential. Most importantly, as utilities, Fannie and Freddie’s foremost priority would be to serve the public mission instituted by Congress when they were first chartered.

Because of the GSEs, homebuyers in Springfield, Missouri and Springfield, Massachusetts have equal access to a mortgage and pay nearly identical rates. Fixed rate 15- and 30-year mortgages are made available and protected by our housing finance system, as well. Consider the alternatives if these benefits were to disappear, and the impact that would have on homeowners and home values across small town America.

Graphic: How the GSEs Have Transformed the U.S. Housing Market

Realtors® believe – as Congress emphasized when they first authorized the GSEs – that responsible and creditworthy homebuyers should never pay more for or be unable to secure a mortgage simply because of where they live.

Ultimately, homeownership must remain a priority on the national policy agenda because it affects all Americans. The National Association of Realtors® (NAR) is who we are because of our work to defend property ownership and private property rights, but our association’s overriding commitment is to ensure homeownership is always in reach for those who have worked hard and have made the sacrifices necessary to secure a mortgage.

As the housing industry continues to evolve in the 21st century, Realtors® are also embracing the technology that consumers use to search for homes. In many instances, in fact, NAR is driving that innovation. But as real-estate agents and consumers become more tech-enabled, Americans on both ends of the transaction are still finding that a real-estate professional’s guidance is more important than ever. Recent data has shown that 90 percent of Americans who search online for property use a real-estate agent, while only 64 percent of those who do not search online use an agent.

Realtors® are more than agents and apps. We are community advocates who commit to a code of ethics and advocate for private property rights. In a transaction that is often the largest and most complex we will make in our lifetime, consumers want a trusted professional to guide them through this process. And there is no substitute for that.

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