While appearing at the National Housing Symposium in Washington, D.C., HUD Secretary Ben Carson stressed the need for more to be done to assist millennials in entering the housing market.
“The homeownership rate today is at 63.6 percent,” Carson said in prepared remarks. “In some states, homeownership is over 70 percent, and first-time home buyers make up 35 percent of all homebuyers in the last 12 months. The Federal Housing Administration (FHA) has a strong role to play. FHA has already helped more than 46 million Americans purchase or refinance their homes. An estimated 40 percent of all first-time homebuyers use FHA.”
However, Carson added that the housing market is becoming a “lost dream” for some credit-worthy millennials.
“In the 1920s, Hemingway’s contemporaries were famously called ‘the lost generation.’ I worry that millennials may become a lost generation for homeownership. We must find a reasonable, prudent path to link millennials with investors and lenders – and the housing market itself.”
Carson noted that the first step toward homeownership is often the purchase of a condominium. Under the Housing Opportunity through Modernization Act of 2016, the FHA was authorized under certain circumstances to lower its required owner-occupancy standard for approved condominium developments.
The owner-occupancy minimum has been reduced from 50 percent to 35 percent.
Carson stated that this action will allow for more people, including millennials, to use FHA to buy a condo, and thus enter the housing market. However, true to his previous statements, Carson added that an overreliance on government should be avoided.
“Remember when, in response to the troubles of 2008, the federal government was virtually the only lender for homeownership? That was not a good role for FHA or Fannie Mae or Freddie Mac. Lenders, bankers and mortgage providers need to do everything possible to help credit-worthy millennials buy their first home,” Carson said. “The taxpayer cannot be the sole solution.”
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