A few years ago, policies were implemented by the Clinton and Bush administrations. These policies were intended to increase the rate of home ownership. But in actuality, the opposite happened.
Initially, these policies were successful. Home ownership rates soared in the mid 1990s, and kept rising for about ten years. Why did this happen? Well, it’s a familiar story. Almost anyone could get a mortgage. All you needed was a good credit score and the ability to fog a mirror. And many people purchased homes that were more expensive than they could possibly afford.
And then, in the mid 2000s, everything collapsed. It was inevitable. It was a consequence of people responding to government incentives to incur more debt than they could afford. And the collapse continued – until now.
Home ownership rates hit the bottom in early 2016, a period which marked a 50 year low. Thankfully, the rate of home ownership is beginning to rise.
What I find curious is that nobody at the Federal Reserve or in the government has stepped forward to admit that a mistake was made in promoting those policies. And those policies caused hardship for many Americans. Many lost their homes, their savings and their good credit.
Are you surprised that nobody in the government admitted that they made a mistake?
I’m not.
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Bunny and Art Reiman