|HUD No. 00-17|
|Further Information:||For Release|
|In the Washington, DC area: 202/708-0685||Thursday|
|Or contact your local HUD office||January 27, 2000|
1999 HOMEOWNERSHIP RATE HITS RECORD ANNUAL HIGH OF 66.8%
WASHINGTON - A record 66.8 percent of American households owned their own homes in 1999 - a higher percentage than in any year in American history, Housing and Urban Development Secretary Andrew Cuomo announced today.
The percentage of households owning their homes - known as the homeownership rate - has risen steadily since President Clinton took office, jumping from 64 percent in 1993 to 66.3 percent in 1998 before setting another new record in 1999.
"This is the latest in a long line of remarkable economic statistics that show just how dramatically Clinton Administration policies have improved the lives of America's families," Cuomo said. "Homeownership has always been the American Dream, and now the dream is becoming a reality for more and more of our people."
As a result of the rising homeownership rate and the nation's growing population, a total of 70.1 million families owned homes in 1999. There were 8.7 million more homeowners at the end of 1999 than when President Clinton took office in 1993.
There were 57.7 million white, 6 million African American, 4.2 million Hispanic, and 2.2 million Asian American, Native American and Pacific Islander homeowners in 1999 - all record high annual numbers and annual percentage rates, according to Census Bureau statistics.
Here's how the homeownership rate has risen since 1993, measuring the percentage of all households owning their own homes and then listing breakdowns by major racial and ethnic groups, as well as location. The category of OTHER includes Asian Americans, Native Americans, and Pacific Islanders. CENTRAL CITIES are the major cities in metropolitan areas.
A total of 40 percent of the net new homeowners since 1994 are minorities - even though minorities account for just 24 percent of the population. In addition to hitting annual record highs in 1999, the African American and Hispanic homeownership rates continued growing twice as fast as the white homeownership rate, but still lagged too far behind, Cuomo said.
"While we've made important strides in increasing minority homeownership, the homeownership gap dividing whites from minorities remains far too wide," Cuomo said.
Homeownership has many benefits. Homeowners generally enjoy better living conditions than renters; accumulate wealth as their investment in their homes grows; strengthen the economy by purchases of homes, furniture and appliances; and tend to be more involved in promoting strong neighborhoods and good schools than renters. For many families, taking a second mortgage on a home is a way of financing a new family business or a college education for a child. When parents who own a home die, the home is usually the most valuable asset they pass on to their children and helps the next generation find economic security.
While the booming economy and low mortgage interest rates created by Clinton Administration policies have been the main factors in the growth in homeownership, Cuomo said Administration homeownership programs have also increased homeownership and will continue to do so in the future. For example:
· HUD is working to make more mortgage funds available to minorities, low- and moderate-income families, and city residents. In July, Cuomo announced a policy to require the nation's two largest housing finance companies to buy $2.4 trillion in mortgages over the next 10 years to provide affordable housing for about 28.1 million low- and moderate-income families. The historic action by HUD raised the required percentage of mortgage loans for low- and moderate-income families that finance companies Fannie Mae and Freddie Mac must buy from 42 percent of their total purchases to a new high of 50 percent in 2001.
- The Federal Housing Administration (FHA), which is part of HUD, insured about 1.3 million home mortgages in 1999 at a value of $124 billion. Without FHA insurance, many families would be unable to get mortgages to become homeowners. In January this year, FHA began insuring home mortgage loans of up to $121,296 in communities where housing costs are relatively low and loans ranging up to $219,849 in communities where housing costs are high.
- HUD's crackdown on housing discrimination, which was ordered by President Clinton, is opening up new housing opportunities to minorities. HUD is also conducting a major study of housing discrimination around the country as part of its continuing efforts to eliminate discrimination that stands as a barrier to minority homeownership.
- The National Partners in Homeownership - a coalition of 66 national groups representing the housing industry, lenders, non-profit groups and all sectors of government - was created in 1995 as part of President Clinton's National Homeownership Strategy. The Partners have successfully implemented initiatives to make buying a home more affordable, faster and easier. Activities to increase homeownership are also being carried out by 153 local homeownership partnerships established to support the national strategy. Among the activities developed by the partners are homeownership counseling, homebuying fairs, and help with locating homes.
- The Community Reinvestment Act, a federal law that requires lenders to make loans to all segments of the communities they serve, has resulted in some $1 trillion in loans to people in low- and moderate-income neighborhoods since it was enacted in 1977. A significant portion of these funds has been used for mortgage lending that has boosted homeownership.