It's long been a truism that homeownership is a pillar of the American dream. Yet many Americans today are increasingly losing confidence in their ability to afford a home.
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We've long recognized that when individuals and families are able to purchase their own homes, they are stepping onto a reliable path toward achieving long-term financial capability. Moreover, high rates of homeownership give people a stronger stake in their neighborhoods, leading to more stable and secure communities. For these and other reasons, policymakers have long sought to encourage homeownership as a cornerstone of our financial inclusion strategy.
But over the last several years, that model has been under severe strain, as a tight inventory of available housing, a growing population, elevated home prices, rising interest rates and higher costs for construction materials have resulted in many buyers being locked out of the market.
Particularly affected by these trends are first-time homebuyers — especially younger buyers and members of marginalized minority communities who are seeking to buy a home as a means to start climbing the economic ladder. Likewise, middle-income buyers — those making up to $75,000 per year, the U.S. median household income — are also feeling the pinch due to a pronounced shortage of available homes in their price range,
Such trends are undermining confidence in the housing market. But the good news is there are steps we can take to alleviate this situation and to restore homebuyers' hope.
Under guidelines proposed this month, credit unions would see changes in the quality standards for computer-generated appraisal systems, along with when and how financial institutions and consumers can request reconsiderations of value.
As one of my duties as a member of the board of the National Credit Union Administration (NCUA), I've recently assumed the chairmanship of the board of directors of
Policymakers should focus on creative ways to encourage more investment in affordable housing. Such solutions could include regulatory reforms, adjustments to onerous zoning restrictions that restrict new construction and funding to boost the supply of homes.
Finally, as a member of the NCUA board, I will continue to encourage the financial industry to take a leading role in homeownership. One great example I point toward is the GreenState Credit Union in Iowa, which launched an initiative called "10 Over 10" to boost homeownership opportunities among minority populations. GreenState pledged to direct 10 percent of their total assets, $1 billion, to home loans for people of color over the next 10 years. So far, they've committed about $300 million toward that goal, so they're almost a third of the way there. This is a great example of how the financial services industry can contribute to addressing the nation's housing challenges. Industry leaders should study such examples and share ideas to see how these types of approaches might be adapted in other states and localities.
The reality is that our housing problem doesn't have a single "silver bullet" solution — it will require solutions, in the plural, to ensure that the complexity of this problem is addressed. But we have the tools at our disposal to start addressing our housing challenges, through a creative mix of regulatory reforms, policy changes, incentives and investment. What's needed is the will and leadership to put those tools to work addressing the problem. We should use National Homeownership Month as a spur to action to get that process started now.
