Thursday, August 26, 2010

Samuelson on The Homeownership Fetish and the American Dream

Robert J. Samuelson (Newsweek/Washington Post economics columnist) has an article called Remodeling the American Dream (Newsweek) or alternatively How a Homeownership Fetish Hurt the American Dream (WaPo).  Samuelson writes about some of the topics we have been talking about here, such as the question of whether the overpromotion of home ownership as national policy inflated the bubble that burst into the mortgage crisis.  The article begins:

The question of what to do about Fannie Mae and Freddie Mac -- the two government-created enterprises that have backed massive loans to the housing market -- involves much more than finance or real estate. It marks the end of an era. The relentless promotion of homeownership as the embodiment of the American dream has outlived its usefulness. . . .

Unfortunately, we let a sensible goal become a foolish fetish.

Samuelson goes on to critique the Fannie/Freddie story but pulls back from the precipice of radical reform in conclusion:

"This is not a good time to make permanent solutions for housing," says Guy Cecala, publisher of Inside Mortgage Finance. The single-minded promotion of homeownership failed and, paradoxically, undermined the American dream. It contributed to the housing "bubble" and favors housing investment over new industries and technologies. But to end it, we need to make haste slowly.

Matt Festa

Financial Crisis, Housing, Mortgage Crisis, Mortgages, Real Estate Transactions | Permalink

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