|HUD No. 00-311|
|Further Information:||For Release|
|In the Washington, DC area: 202/708-0685||Thursday|
|Or contact your local HUD office||October 26, 2000|
Statement By The President
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U.S. HOMEOWNERSHIP RATE HIGHEST IN NATION'S HISTORY
WASHINGTON - The percent of Americans who own their homes hit a record high 67.7 percent in the third quarter of 2000, U.S. Housing and Urban Development Secretary Andrew Cuomo announced today, shattering the end-of-Administration target of 67.5 percent set by the Administration in 1995. There are now 71.6 million homeowners in the United States. President Clinton said, "Vice President Gore and I came to office committed to a strategy to make it easier for American families to buy their own homes. By providing record levels of homeownership loan assistance, increasing the availability of affordable housing, providing incentives to save for a home purchase, and maintaining our commitment to fiscal discipline that has kept interest rates low, we have worked to ensure that every family has the opportunity to own their own home. I would like to particularly thank Vice President Gore and Secretary Cuomo for working with families, especially in low-income and empowerment communities to help make homeownership a reality." Secretary Cuomo said, "Credit for this remarkable, record-shattering performance rests with President Clinton and his economic policies, policies which proceed from the fundamental belief that strong families are the driving force behind a strong economy. Nothing makes families stronger than homeownership and nothing is a better indicator of the strength of our nation's economic health than the record numbers of Americans who now own a piece of the American dream. As the Secretary of Homeownership, I thank the President for his support of our work and his support of America's families."
In addition to the historic national homeownership rate, all-time high rates were set for minorities (48.2 percent), Hispanics (46.7 percent), central city residents (51.9 percent), households headed by females (53.3 percent), households earning less than the median family income for the quarter (52.2 percent), and married couples younger than 35 (61.0 percent).
"We cannot, however, fully enjoy today's success until we erase the gap in minority homeownership," Cuomo said. In order to increase minority ownership to more than 50 percent, Cuomo announced in June that within three years HUD's Federal Housing Administration will insure an additional 765,000 mortgages for minority families.
Cuomo cited a number of Administration actions as underpinning the growth in homeownership. Those activities include:
Creating a National Homeownership Strategy. In 1995, the Administration began an unprecedented partnership with more than 50 key public and private organizations to form a common strategy for achieving the 67.5 target rate.
- Lowering interest rates by paying off the national debt. The Administration has eliminated the budget deficit, which was as large as $290 billion in 1992, produced three consecutive budget surpluses, and paid off $360 billion of the national debt in the past three years. The public debt is now $2.4 trillion less than projected in 1993. As a result, a family with a home mortgage of $100,000 might save about $2,000 annually in mortgage payments.
Reforming HUD. Faced with calls from some members of Congress for the elimination of HUD, Cuomo launched a "top-to-bottom" review of the agency's operations, reducing staff by almost a third, consolidating offices, establishing firm management and inspection controls over HUD-assisted properties, increasing flexibility for state and local governments receiving HUD funds and establishing a "zero tolerance" policy against waste, fraud and abuse. David Osborne, author of Reinventing Government, has called Cuomo's reforms "one of the most ambitious and exciting reinvention plans in the recent history of the federal government."
Winning best HUD budget in 20 years. With last week's final passage of the fiscal year 2001 HUD-VA appropriations bill, HUD looks forward to the coming year with the most resources for housing, economic and community development in 20 years. After initially calling for few, if any increases, the Congress finally agreed to increases in virtually every HUD program, with additional funds provided under the Community Development Block Grant and HOME programs, for an additional 80,000 rental assistance vouchers and new funds for the nation's Empowerment Zones.
Providing record levels of homeownership assistance. In 1999, the Federal Housing Administration, an agency within HUD and one of the country's leading providers of single family mortgage insurance, insured more than 1.3 million loans representing a record $124 billion in insurance authority, more commitments than in any other year.
Making FHA "customer friendly." As part of HUD's 2020 reforms, Cuomo ordered FHA to reduce staff, streamline operations, make greater use of technology and, most importantly, to raise FHA mortgage insurance limits to levels that make FHA a competitive mortgage insurance instrument in virtually every one of the nation's cities, counties and towns.
Restoring FHA to fiscal health. In 1990, the FHA insurance fund had a negative economic value, with claims on mortgage insurance far exceeding the fund's projected revenues. A study by the accounting firm of Deloitte & Touche released in March found that, due to Secretary Cuomo's reforms, the FHA fund has a record $16.6 billion in economic value and is now able to withstand any potential economic downturn.
Building new homes. In February 1999, HUD, the National Association of Home Builders, and the U.S. Conference of Mayors signed an agreement to build an additional one million new homes throughout the U.S. in the next 10 years.
Increasing affordable housing goals. In July 1999, Cuomo established a new Affordable Housing Goals that required Fannie Mae and Freddie Mac -- two government-sponsored enterprises involved in housing finance -- to buy $2.4 trillion in affordable home mortgages in the next 10 years. This will result in new affordable housing for about 28.1 million low- and moderate-income families.
Permitting renters to use vouchers to help buy homes. Legislation signed in 1999 by the President created a homeownership voucher program that will enable more than one million recipients of Section 8 rental assistance vouchers to become first-time homebuyers.
Discounting homes for police officers and teachers. The Officer and Teacher Next Door programs offer police officers and teachers in selected U.S. communities a 50 percent discount when buying HUD-foreclosed properties. To date, more than 4,500 officers and teachers have become homeowners through these initiatives.
Providing incentives to save for homes. The President, as part of his 1992 community empowerment agenda, signed legislation creating Individual Development Accounts that provide matching funds for low-income families to save for a first home, higher education or to start a new business. Some $20 million was awarded in fiscal years 1999 and 2000 under this program.
- Strengthening the Community Reinvestment Act (CRA). The Administration's commitment to strengthening the Community Reinvestment Act has been an important tool for simulating the flow of capital to under-served communities. When HUD provides public investment in low and moderate income areas through Community Development Block Grants, HOME Investment Partnerships and other programs, CRA serves as a vital development partner.
Cuomo said that studies have shown that homeowners accumulate wealth as the investment in their homes grows, enjoy better living conditions, are often more involved in their communities, and have children who tend on average to do better in school and are less likely to become involved with crime. Communities benefit from real estate taxes homeowners pay, and from stable neighborhoods homeowners create.
Here are figures showing how the homeownership rate have improved since the 1994 fourth quarter, just before the President set his year 2000 goal. The category of "Other, non-Hispanic" includes Asian Americans, Native Americans and Pacific Islanders. Rates that set new quarterly records are in bold.
|Third Quarter 2000||Fourth Quarter 1994|
|Households w/less than median income for the quarter||52.2%||48.6%|
|Married couples under 35||61.0%||57.1%|