Recognizing National Homeownership Month
I would like to thank the Chair of our subcommittee, Mr. Ney, for his support, not only for this resolution but his support for all of the members serving on our subcommittee on both sides of the aisle for all that we are attempting to do to expand homeownership opportunity. I am excited about the leadership that Mr. Ney has provided on FHA, to support the CDBG, his support for section 8. All of these programs lead to homeownership.
And I am delighted to be on the floor with him today.
I would also like to thank Mr. GARY MILLER, the vice chairman of the subcommittee on Housing and Community Opportunity, for sponsoring this resolution. This is an extremely timely resolution. June is National Homeownership Month, 2006.
And I also want to applaud all of those who joined on the resolution as original cosponsors: Mr. Hinojosa; Mr. Scott of Georgia; Ms. Harris; Ms. Millender-McDonald; Mr. Neugebauer; Mr. Frank, the ranking member of the Committee on Financial Services; Mr. Ney, of course, chairman of the subcommittee on Housing and Community Opportunity; and the distinguished chairman of the Committee of Financial Services, Mr. Oxley.
Mr. Speaker, and Members, homeownership is like motherhood and apple pie. I believe that just about everyone would agree that homeownership is important to the overall quality of life in communities across the country and to the economic well-being of individuals and families in America.
While National Homeownership Month has been celebrated for the past 5 years, we really do owe a great deal of credit to the many nonprofit organizations and public policymakers who have concentrated on making the American Dream come true, as well as others who have formed public-private partnerships to expand homeownership opportunities in America. Without these cooperative relationships and bipartisan relationships, we would be hard pressed to have reached many of the low-and moderate-income persons and families who have been able to afford a home.
Mr. Speaker and Members, it is commendable to applaud homeownership in this country, but it takes a little bit more to create the opportunities for the average American to own a home, and it requires real support and assistance by public policy-makers. I am pleased and proud to serve on this subcommittee because, again, I see that commitment on both sides of the aisle.
Homeownership has a rich history in America. Let's take a walk back in time and we will see just how important homeownership has been in America. From 1900 to 1920, the first 20 years of the last century, the homeownership rate declined slowly but steadily. Then homeownership soared in the 1920s, but declined to its lowest level in the 20th century, 44 percent by 1940. Of course, after World War II, we witnessed a dramatic increase in homeownership as the postwar economy boom contributed to American prosperity. Purchases of homes were central to building that prosperity; and by 1960, homeownership had grown to 60 percent because of favorable tax treatment and attractive financing related to homeownership.
During that same year, my State of California reached its high water mark for homeownership tying the national average of 60 percent. By 2000, two in three households in the United States owned their own homes. In 1990 less than half owned their own homes, whereas today 70 percent of all Americans own their homes.
In addition, the median value of single family homes in the United States, according to the census, rose from $30,600 in 1940 to $119,600 in 2000. But of course, today the median value in some places, such as California, have increased tremendously, almost to $500,000.
The benefits of homeownership are truly remarkable. Homeownership provides a broad range of benefits to individual homeowners and to society as a whole. Many children of homeowners did better in school and are more successful in life. Homeownership acts as a powerful economic stimulus, benefiting the individual homeowner and the national economy. Homeownership benefits neighborhoods, providing economic and social capital. Homeowners are more likely to participate in local organizations. Homeownership in distressed communities raises neighborhood property value by a significant amount, and homeowners state that they are more satisfied with their living situation than renters.
The benefits might seem inconsequential to some. But believe me, if we could transfer the benefits of homeownership across this country, we would wipe out much of the crime in our communities, lower high school drop-out rates, reduce poverty, and improve the overall quality of life for countless numbers of Americans.
Just think of the benefits to children. Children of homeowners score better on academic tests, graduate at higher rates, have fewer behavioral problems, and enjoy a better social environment. Children of homeowners are more likely to become homeowners, adding to the paradigm of wealth creation.
Homeownership benefits the U.S. economy. Homeowners generate equity. Home equity is often the source of start-up capital for a business or for financing our children's education and our retirement. High rates of homeownership in a community add to the value of property as much as $5,000, according to one recent study.
A home is a real source of wealth. Homeownership is central to individual wealth and to the wealth of the U.S. economy. The growth in new housing starts in the last few years contributed directly to the growth in the U.S. economy. Just look at the housing sector, and it will usually tell you a lot about the overall wealth and direction of the economy.
Mr. Speaker and Members, homeowners confer benefits to the communities in which they live. Homeowners vote and participate in important community organizations such as our schools. Homeownership benefits distressed neighborhoods, resulting in increased property values and more stable communities. Stability is the key to improving the quality of life in America. Homeownership in America is the key to stability.
Despite the benefits of homeownership in America, some Americans still are not benefiting from homeownership. African Americans and Latinos still lag behind others in their rates of homeownership. According to the "National Urban League's State of Black America Report for 2006," less than 50 percent of African American families in America own their own homes. The rate of homeownership is about the same for Latinos, approximately 49 to 50 percent.
Another poignant fact is that some of the disparity in homeownership rates for these groups is the result, sometimes, of discrimination and predatory lending. The Center for Responsible Lending just completed a major study which found that African Americans are still more likely to receive higher-rate home purchase rates and refinance loans than similarly situated white borrowers, particularly for loans with prepayment penalties. African Americans with prepayment penalties on their subprime mortgages were 6 to 34 percent more likely to receive a higher-rate loan than if they had been white borrowers with basically the same qualifications or risk factors. Indeed, Latino borrowers had the same experience as African Americans. Latino borrowers purchasing homes were 29 to 142 percent more likely to receive a higher-rate loan than if they had been a non-Latino white borrower. Each of the above findings was also documented in a Federal Reserve study last year.
These findings are very real for African Americans and Latinos, and that should be enough. What the findings mean is that African Americans and Latinos still face obstacles to homeownership that other Americans do not face. Obstacles to homeownership are obstacles to the achievement of our vision. If homeownership in particular is the key to stronger and healthier communities, financial independence and the accumulation of wealth in America, then it is essential that we not only recognize June as National Homeownership Month, but that we commit ourselves to eliminating obstacles to homeownership for all Americans.
As such, I ask all of my colleagues to support June as National Homeownership Month of 2006 as embraced by H. Res. 854. Remember, we continue to pursue a broad range of policies and programs to encourage homeownership opportunities in America.
We have fought to restore budget cuts that have been proposed from time to time in funding for Federal programs to promote homeownership, including CDBG, HOME and HOPE VI. We have led efforts to raise FHA loan limits so that middle-income families in high-cost areas like Los Angeles have affordable mortgage loan options.
And I want to tell you, the bill that was alluded to by Mr. Ney, our chairman, on FHA is exciting. It will be coming up on this floor to receive support from this Congress, and it will be one of the most profound pieces of legislation that have been passed on this floor certainly in this session and for a long time.
This will not only revitalize FHA, it will increase the loan limits. Because the price of housing has been rising so quickly that FHA was not able to accommodate those who still need affordable housing, and we will afford to FHA borrowers the opportunity to participate in new opportunities, no down payment products, et cetera. So I am very much looking forward to that.
I am joining with Mr. Ney and others, and we are leading the effort today to make FHA relevant again to the needs of first-time home buyers and working families. We must do all we can to ensure that this goal is achieved.
As we recognize the month of June as National Homeownership Month for 2006, we must recognize that the American dream still escapes many in America. When this is no longer true, we will be able to celebrate homeownership in America not as a dream for some but as a reality for all Americans.
Mr. Speaker and Members, those of us who work on this issue from both sides of the aisle and in our committee, sometimes we push very hard and we are a little tough because we know that there are working families out there who work every day, who pay their bills on time, they pay their utility bills, they pay their other bills, but they still are not able to get a mortgage and have a home for themselves and their families, but they deserve it. And so we look very closely at what these financial institutions are doing.
None of us like predatory lending. We don't mind having a subprime market, but it must be a subprime market that will allow people to buy a home and perhaps even sometimes start out with a little bit higher interest rate, but they must be reduced as those homeowners demonstrate their ability to pay for these mortgages.
We don't like our American workers to be taken advantage of. We don't want them to have high interest rates that are above and beyond what the average borrower would be able to get. We don't like the fact that Americans lose homes. We want everybody who enters into this business, this contract, of buying a home to be able to pay that mortgage and to be able to hold onto that home.
I am so adamant about homeownership and understanding what it can do because I can recall when I was a single parent with two children and was able to put together a down payment to purchase a little home that I paid $26,000 for. Just a couple of years ago, I sold it for almost a half million dollars. Just think, if every American had the opportunity to get into purchasing a home, just realize the amount of wealth that could be created not only to start businesses, to pay for education but also to be there for retirement in our old age.
So I am perhaps a very vocal and a very persistent supporter of homeownership because I know what it can do and I know what opportunities are afforded to all Americans who have the ability to do this.
Mr. Speaker and Members, let me just say what a pleasure it has been for me serving on this subcommittee with Chairman Ney. Not only has he provided strong leadership for homeownership, as he alluded to, we have made visits not only in California but in Louisiana and Mississippi, not only looking at CDBG and section 8 and these very important programs that are helping Americans have decent and safe living conditions but leading to homeownership oftentimes.
The attention that was paid to Katrina victims and what took place in the gulf coast region has not been matched by anyone. Mr. Ney took it upon himself and his committee to go there and to spend the time taking a look at all aspects of this disaster.
And while we were there, we were able to understand what the insurance companies were or were not doing. We were able to understand what was happening with public housing. We were able to understand what was happening with the trailers, who was getting them, who was not getting them. And we were able to work very closely with Mr. Baker, with Mr. Jefferson and with others who come from that region to begin to talk about how we are going to build homes, how we are going to replace those homes, how we are going to be able to use CDBG funds to make sure that people have the opportunity to not only rebuild their homes but to restore their lives.
With that, Mr. Speaker, again I thank Chairman Ney. I thank Vice Chairman Miller.