Owning a home has long been the #1 way for families to gain some wealth. It also provides predictable, lower-cost housing for seniors if people are able to buy earlier in life and have a paid-off house before retiring. Additionally, communities with high owner-occupancy rates tend to be cleaner and safer, with more engaged residents (though it’s likely that the types who could traditionally qualify for mortgages are more likely to be responsible neighbors). For these reasons alone, it makes sense for the govt to push for more owner-occupied housing.
The main reason for prices shooting up so much during the bubble, and even now, is because speculators and investors have been flooding into the housing market. I think this is damaging to the economy over the long run, not only because of the boom-bust nature of speculative markets, but also because it prevents stable ownership and the benefits it tends to bring to individual families and society, as a whole.
If we want to see stable communities while also giving as many people as possible the opportunity to own their own **affordable** home (which I believe is the right thing to do), we should enact policies that encourage this by keeping speculators out of the market, while providing assistance to buyers of a single, primary residence.
We should never have government-backed/subsidized mortgages for speculators/investors. No GSE, FHA, USDA, VA, etc. loans except for a single, primary residence. For FHA/VA loans with low downpayment requirements, the loan limits should be at or below the median price for the area; I agree with BG that these loans should be geared toward working-class neighborhoods, not beachfront properties or homes in exclusive areas.
All government-backed loans should have strict underwriting guidelines with low debt-to-income ratios and high credit score requirements.
Speculators should have to use the “free market” to get their financing; no need for the taxpayers/government to subsidize their profits.
