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Not Everyone Should Own a Home

On May 2, 1995 Clinton’s White House released the “The National Homeownership Strategy: Partners in the American Dream”.  You can download this fantastic historical document right here: National HomeOwnership Strategy PDF

They synopsis of the report and its desire can be summed up in the first few sentences:

For millions of America’s working families throughout our history, owning a home has come to symbolize the realization of the American Dream. Yet sadly, in the 1980s, it became much harder for many young families to buy their first home, and our national homeownership rate declined for the first time in forty-six years. Our Administration is determined to reverse this trend, and we are committed to ensuring that working families can once again discover the joys of owning a home.

Well…guess what?  Homeownership was fairly range bound until politicians got their hands in it:

HomeOwnership

The political game continued with the Bush administration because of a political desire to make home-owning citizens (or possibly banks) happy.  We all know how that turned out.

It is extremely sad when you walk through the time series of events:

  1. Individual is tricked into buying an over-priced home with a non-amortizing or option ARM mortgage (most likely embedded with high fees)
  2. Loses home, down-payment, and money spent on the investment because housing prices drop precipitously and he/she lost job due to housing crisis induced recession
  3.  Institutions and wealthy individuals buy the houses in  (government subsidized) foreclosures at fire-sale prices
  4. Individual starts renting the same house from a “savvy” investor who continues to raise rental rates even though wage growth has been stagnant

Sounds like the plan worked out great…

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