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20 Years Later, Bill Clinton's Home Ownership Dream For America Is Dead
In “America’s Housing Problem: Buying And Renting Are Both Unaffordable,” we documented the rather disconcerting situation facing America’s renters.
Despite the fact that Fannie Mae and Freddie Mac now back home loans with down payments as low as 3% (down from a previous floor of 5%) and despite the fact that the FHFA’s move to lower the down payment requirement effectively forced FHA to cut premiums in order to stay competitive, presumably making housing even more ‘affordable’, the homeownership dream is quickly slipping away for many Americans.
In short, non-existent wage growth (remember, wage growth in America is now almost solely concentrated in the hands of what the BLS describes as ‘supervisory’ workers who make up less than a fifth of the labor force) and crushing student debt (the Class of 2015 graduated with an average debt load of $35,000) are conspiring with the BEA’s fabricated, double-adjusted “recovery” to make saving enough for a down payment virtually impossible.
Meanwhile, the very fact that many Americans are shut out of homeownership means more demand for rentals which in turn drives up rents, squeezing household balance sheets further and effectively leaving many stuck between homes they can’t buy and rents they can’t afford. The result: the homeownership rate in America is now back to where it was 20 years ago and some Americans face the very real possibility of not having a place to live at all.
Now, the question is whether the homeownership rates that persisted in the years leading up to the crisis were realistic in the first place or simply represented what happens when a political mandate (promote the “American Dream”) meets the Wall Street securitization machine.
Whatever the case, renewed scrutiny on the demise of the American homeowner comes at a rather inconvenient time because, as WSJ reports, this month marks the twenty year anniversary of Bill Clinton’s National Homeownership Strategy which was unveiled with the help of Jean Mikitz, an Allentown, Pennsylvania resident who, at the time, had just bought a home with her husband Jim with the help of an FHA guaranteed loan — Jim eventually went into foreclosure. Here’s more:
This month marks 20 years since President Bill Clinton unveiled his “National Homeownership Strategy,” a 100-point action plan that put as its overarching goal achieving an “all-time high level of homeownership in America within the next six years.”
That set in motion an effort by both parties in Washington to work with the private sector to loosen lending standards and make it easier for middle-class Americans with less savings or inherited wealth to purchase homes.
Jean and Jim Mikitz of Allentown, Pa., had just bought a home using a loan backed by the Federal Housing Administration when the Clinton administration was rolling out its homeownership campaign. Their mortgage broker connected them with administration housing officials, which is how Ms. Mikitz ended up introducing Mr. Clinton at his June 1995 speech, a few weeks after they closed on the purchase.
The homeownership rate, then at around 64%, steadily climbed to 69% in 2004, after President George W. Bush similarly embraced a goal of increasing homeownership. Today, the homeownership rate has fallen back to below where it was 20 years ago following the bursting of the housing bubble, which led to millions of foreclosures.
Mr. and Ms. Mikitz’s story, it turns out, also ended in foreclosure. Mr. Mikitz, a 41-year-old mechanic, lost the house in 2004, according to public records. Mr. Mikitz said they stopped making payments on the home when he and his wife divorced. “It pretty much forced me into bankruptcy,” he said. His former wife couldn’t be reached for this article.
There you have it.
The American Dream in one cautionary tale.
We’ll leave you with Clinton's 1995 speeach introducing The National Home Ownership Strategy.
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Easy credit and lowering lending standards can make any plan come to life. Hindsight proves how toothless it really was.
Honestly, I care less about the rising cost of homes and more about the rising cost of property taxes. Few people can afford "rent" on top of a mortgage.
But hey, at least we get these awesome government services and top rate public schooling!
Around here it is rising valuations and lower property taxes. But they get a fatter check. Congratulations! We lowered your property taxes but now you have to pay more because your valuation is way up!
100 points is at least 95 too many.
Government is evil.
We need less evil.
Clinton didn't have a "dream," but rather a scheme with the banksters.
Thanks Ignatius.
"You want some Truth with that?"
We bought 20+ years ago when you needed 20% down and interst rates were 8+% (we paid points to get down to 8 3/8%). You couldn't spend more than 36% of your income on the mortgage, property taxes, insurance and other assorted taxes. With TWO decent incomes we were well into our 30's when we bought (and had a 1 year old - the first of TWO children we had). We worked our tails off to get the 20% down and bought a wreck of a place I'm still not done working on after more than 20,000 hours of my own labor.
Our property taxes have more than TRIPLED over 20 years with local services getting WORSE (the local roads are so potholed you risk blowing tires). This is in a relatively affluent burb north of NYC (not top tier but far better than average). Property taxes have been far more than our mortgage payment for a while now. WTF?
Our local schools are better than most public schools but far from where they should be - the kids at the top (my own included) are there because of their own innnate talent and intelligence and parents that worked hard - reading and all the other things you need to do as a parent. Lots of overpaid school administrators that nobody can figure out what they do and lots of BAD teachers they should (but won't) get rid of. Not all that different from most public schools. Half the local cops and firemen retire with 20 - and way too many seem to be collecting disability (for WHAT?!). Working for local gov seems to be the best con going these days.
A few years after we bought (at the market bottom when there were hundreds of houses to choose from), you had low interest rate ARM's, NINJA mortgages and houses being bought by people who couldn't afford to rent - driving up housing prices. Too many people bought houses they NEVER should have gone near. You saw people buying new houses WAY up in the boonies with 90 minute commutes (real fun when gas prices skyrocketed).
I waited for the crash - though the bubble lasted far longer than I exected. People were buying who couldn't afford to do so and being sold overpriced crap. After 9/11 you had all the yuppies in Manhattan panicking and moving to the burbs to raise kids driving up prices in 'better' burbs and crowding schools. A good number of these types are a blight - not involved in the community, no plans to stay after kids get out of school and completely uninvolved in raising spoiled ill-behaved brats.
Would love to 'retire' and move elsewhere but decent healthcare is still a 'benefit' coming from work and the good jobs are here NOT in the boonies. Hard to save enough for retirement when you're paying full freight for college (no aid for the upper middle class - at least we saved up and can afford it). NO real safe return on any savings with ZIRP so you take major risks to earn on your money or try to preserve capital (even that is hard with inflation far higher than reported).
Do 'the right thing' - live and act responsibly - and you get screwed no matter what.
Time to move whatever wealth you have out of the reach of the leaches.
Your comments are very similar to my experiences.
similar here - including the feeling that oozes from your sentences - it's just unfair and it goes against everything many of us were taught to uphold.
Are most gen X too rich by now to give a damn? Is that it? You don't revolt because pockets are full for you and your future gens? That's the only thing I can think of, because certainly I was not the only one to be raised with enphasis on character and ideals.
What da fuck am I supposed to teach my kids now? how to win in a unsustainable environment? If that's the case I might as well just put some lipstick on and parade myself in front of a mirror: "fuck me..fuck me" - both options make the same sense to me.
Hi, I'm from the government and I'm here to help...
Yes, but Gramm-Leach-Bliley and the Commodity Futures Modernization Act of 2000 have worked their perfect destruction of the US, just as planned.
It's all part of the plan.... to squeeze every dime out of every 99-percenter and toss them out into the street.
Don't you know...it was never your money in the first place
Sometimes home owners that sold at a profit just rent until the market goes down again.
"Bill can't come to the phone right now, he's at Epstein's pedophile Orgy Island in the Caribbean screwing children"
The road to hell is paved with good intentions
Clinton's good intentions.... Like sicking the DOJ on banks to push them to make loans to people with bad credit in bad areas. There is a reason that back then the Congressional Black Caucus types called Clinton the First Black President. How we forget.
20 yrs of production done in what would normally be in 5 was a dumb idea
http://www.bizjournals.com/houston/news/2015/06/10/houston-home-sales-co...
in retrospect it was exclusively a huge profit-generating plan of Wall Street, by Wall Street, for Wall Steet, sorry but I mean "the people".
Clinton was responsible for the policing problem we have today as well with his "First Reponders" initiative. Remember that one? Wanted to put a kazillion more cops on the street and offered FED $$$ to communities to expand their policing roles...well that funding had an expiration date. That is a huge part of the problem in places like Ferguson where the police are out collecting revenue instead of just responding to calls. Their rolls grew, but that FED $$$ was gone. Bill Clinton was a total destructor when he was in power, yet he is lauded, loved, and lusted after by the American mouthbreathing electorate and the complicit media machine.
That's it Dixie, once you create a budget for a program , it's for life and just grows & grows.
Like booking into that hotel, club thingy.
When it comes to destructive, Clinton was a piker compared to the 2 that followed him. Bush/Cheney and the neo-con cabal were real pros, and Obummer is busy sealing the deal.....and we are so stupid as a population that they all got 2 terms!
don't forget that there wasn't even a surplus either. all those "good years" were from raiding the social security trust. and that "surplus" ended up becoming tax cuts for the rich. how awesome is that?
Exactly laomei, my blood boils when I hear the drones talk about the "Clinton Surplus." Never happened.
I used to joke that his true legacy was being an impeached, disbarred, serial rapist who gave us the V-Chip, School Uniforms, and Midnight Basketball, but the more you look into the scandalous dealings of this CRIMINAL, the more maddening it is. And the media just ORGASMED over covering him and his politically expedient Alinskyite wife.
Totally contemptable people.
I refuse to believe that 2/3 families own their own property ever, unless you exclude the working classes ( and include the under class in the trailer parks ).
yeah, well when you give (certain) people money at 0% what exactly did you think was going to happen? if i could borrow a billion dollars, cost free, i'd be doing a ton of buy-to-rent also.
Bill's only homeownership dream was for a mansion for himself. Mission accomplished as far as that goes.
what the fuck did you think was going to happen by having a "made in china" sticker on everything you buy?
I didn't realize until very late in Bill Clinton's Presidency the extent to which he completely handed over the country to Wall Street. The whole home ownership thing was really the start of that, wasn't it. Then Gramm-Leach-Bliley, and the Commodities Modernization Act of 2000 hammered down the lid of the coffin. Obama's Clinton 2.0 Presidency has added Wall Street bailouts and the health insurance bailout to the pile.
The one thing to look forward to in a Hilary Presidency will be to see what's left unsubsidized in the Finance Sector. 'Cause she'll fix that oversight. But she'll have to look far and wide.
DUPLICATE
Some clown with a 550 FICO, ZERO DOWN, Locking into an adjustable rate sub prime mortgage with a massive ballon payemnt for an overpriced shitbox- what could go wrong-
Bill Jefferson's (BJ) dreams included home ownership for all Americans.
That's a good one!
So it was a trap !!! And the property taxes increasing 100% was the tell.
Every Bill Clinton 'success' can be traced to the leadership of Newt and the Republican Congress. Newt established the policies that worked and blocked the Clinton policies that would have hurt the economy. Everything after Newt left has weakened or destroyed our economy and our freedoms!
Giant Sucking Sound Ross Perot 1992 Presidential Debate flv
http://www.youtube.com/watch?v=EAHM9rXjdUo (1:56)
Bill Clinton's home ownership dream is NOT dead. He owns a home.
At least until Hillary sues him for divorce and takes it away from him.
It's America Works all over again...
Here's something "new" under consideration (zoning changes needed): CLUSTER COTTAGE Development. It looks like this:
http://cache.boston.com/bonzai-fba/Third_Party_Photo/2007/12/02/11966068...
Here's the "old" consideration: SLAVE CABINS. Here's what they locked like:
https://beyondthebubble.stanford.edu/sites/default/files/slave%20quarter...
I've been reading Christopher Hitchens lately. Christopher reviewed Sidney Blumenthal's book, The Clinton Wars in The Atlantic Monthly|July/August 2003.
Here's a quote from Sid's book, talking about what else Bill Clinton could have accomplished (remember, this was Clinton circa 1992!!!) My, my, if it isn't the Presidential bucket list revealed:
"Had the proposals Clinton made for new legislation been enacted, the United States would now have universal health insurance, affordable prescription drugs for senior citizens, universal day care, more schools, higher teacher salaries and higher educational standards, more gun safety, greater voting rights, new civil rights laws against discrimination, and an even higher minimum wage. Had his foreign policy been fully enacted, the United States would have affirmed the Kyoto treaty to address the dangers of global warming; more programs for education, disease control, and economic development for Africa; and more trade with Latin America."
http://www.theatlantic.com/past/docs/issues/2003/07/hitchens.htm