June is Homeownership Month

JUNE IS HOMEOWNERSHIP MONTH

The overall U.S. homeownership rate is at a record 68.6% in the first quarter of 2004. For the first time in American history, the majority of minority family households are now resident-owned too. The minority homeownership rate stands at 50.6% in the fourth quarter of 2003 (latest figures available).

Economic indicators suggest that the American economy is now in full recovery. Over the past four quarters the economy has expanded at a 20-year record. We have had several months of strong job-growth. During the most challenging months of the past few years, the real estate and re-finance industries set records and helped prevent the economy from becoming
much worse.

June has been designated "National Homeownership Month" by the White House. The purpose is to spotlight the pride and value that comes with owning a home, as well as to help more families become first time homeowners.

Mortgage rates hovering at 40-year lows have been among the chief catalysts for the boom in refinancing and strong home sales. According to National Association of Realtors calculations, existing home sales for the first quarter of 2004 rose more than 7% over the first quarter of last year and nearly 9% versus the prior month, which is the largest monthly increase in nine months. Housing starts in March 2004 exceeded two million on an annual basis, which is 15.2% above the prior year and 6.4% over the prior month.

Homeownership benefits the community and American families. When families own their homes, they become "stakeholders" in the community. They tend to become active in charities, churches, and schools. Owning a home is also one of the best opportunities to create wealth by building equity. It is with good reason that owning a home is referred to as the "American Dream."

For that reason, the name, "the American Dream Down Payment Act," which I supported, was given to a new law, designed to help about 40,000 families a year with their down payments and closing costs for their first homes. The greatest obstacle between many families and home ownership is the barrier of saving for the down payment. The American Dream Down Payment Act provides assistance overcoming that hurdle for qualified, first time home buyers.

To make first-time home buying even more affordable, I am also excited to co-sponsor the Zero Down Payment Act, currently under consideration by the House. The Zero Down Payment Act would allow families to qualify for FHA loans without having to pay cash at closing. It would insure 100% of the cost to acquire a home for first-time homebuyers. The program would assist creditworthy working families who can afford the monthly mortgage payment but have not had the opportunity to save for the down payment. If passed, the Zero Down Act is estimated to generate 150,000 new homebuyers in the first year.

Real estate and refinancing have been strong sectors of the economy during the past several years. Homes have increased in value even as the stock market has fluctuated. Record homeownership is evidence of a healthy economy. The capital gains that homeownership has produced for many American families are the source of many American Dreams.

First time buyers who want to participate in the American Dream can seek out information and federal government resources through the Department of Housing and Urban Development (HUD). If you are a renter, visit HUD's website at www.hud.gov and consider participating in the "American Dream" of home ownership.