Her words resonated with an audience at the National Association of Realtors in Washington DC Wednesday, which gathered to address the near 50-year-low for homeownership.
The Senator said that tax reform legislation passed in the US Senate was a “systematic dismantling” of the structure which incentivizes homeownership. She also called for reform of the government-sponsored enterprises and protection of the 30-year fixed rate mortgage.
World-renowned economist Dr Robert Shiller spoke of the exuberance in the market leading into the 2007 housing crash.
"People saw that they had this opportunity of a lifetime to borrow at 6 percent and invest at 12 percent," Shiller said. "But where did this expectation come from?"
He also talked of the rising prices and how homes tend to sell above asking price when prices are rising but not when they are falling. He highlighted the return of “buyer panic” with buyers believing they must buy now or be priced out of the market.
"It's not just interest rates and tax law that drive prices in speculative markets," Shiller said.
Student debt is a big issue for potential young homebuyers
A panel of experts including Dr. Beth Ann Bovino, chief U.S. economist at S&P Global Ratings; Jessica Lautz, managing director of survey research and communication at NAR; and Layla Zaidane, chief operating officer of the Millennial Action Project spoke to ongoing concerns that student debt is contributing to the challenges facing young homebuyers.
"When we look at the spectrum of those who have student loan debt, only 55 percent of them are making their payments on time," Lautz said. For many of these individuals, she said, homeownership is simply not an option. But even among those who are currently making their payments, Lautz said homeownership is still largely out of reach.
She added that of those who are making their student debt payments on time, 80% are not homeowners.
The conference also addressed the low supply of homes which is driving up home prices far faster than income is rising.
"Prospective homebuyers face headwinds from the market, in the halls of Congress and in their own family's budgets," said NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty. "We can't solve them all, but we know more can be done to smooth the way for creditworthy borrowers who want to own a home."
More market update:
Dwindling hope of owning a home means the future of the United States is taking a “huge step backwards” according to Senator Heidi Heitkamp (D-N.D.).