Thank you, Sen. Hutchison, for those kind words, and for your great work in the United States Senate...

I appreciate your inviting me to this terrific summit. It's always a pleasure to come back to Texas. It's great to be with so many talented young leaders. If you represent the future, then the future is bright indeed.

I may not quite fit into your demographic, but hey, I am young at heart!

America is a young country. And so were its founders. That's right-our Founding Fathers were young professionals. Thomas Jefferson was 33 when he wrote the Declaration of Independence. James Madison was in his mid-30s when the Constitution was ratified. Alexander Hamilton was just 34 when he became Treasury Secretary.

Young people say they want to change the world. Well, that time, they did!

Our founders had the energy and passion of youth. But they also had a vision that saw far into the future.

Look at the Constitution. Over the centuries, it has proved both enduring and adaptable.

Listen to Madison on the concept of private property: "If the United States mean[s] to obtain or deserve the full praise due to wise and just governments, [it] will equally respect the rights of property, and the property in rights."

This respect for private property has created the freest and fairest economy in history. Americans are able to live where they want, and buy what they want. But they also must accept the consequences of those decisions.

And those consequences have ripple effects throughout the world economy.

Right now, many Americans are making the choice not to buy a home. Existing home sales were down 4.3 percent in August, and 12.8 percent lower than a year ago. New home sales were down 8.3 percent, or 21 percent lower than a year ago. In the South, the median home price since 2006 has actually fallen-unthinkable just a few years ago.

The impact has been felt from the offices of Countrywide Financial to the aisles of Home Depot and Lowe's. It's caused a credit crunch, which has made it harder for small businesses to expand and make plans for the future.

Can we solve the problem? Yes. How? By first looking at the causes of the problem.

First, all real estate, like all politics, is local. In a few states, a poor local economy has caused declining incomes and job losses.

This has made it harder for families to buy a first home or move into a larger home.

In other places, the opposite occurred. Rising home prices and a roaring economy in some Sunbelt states led to a fever of speculation-what former Federal Reserve Chairman Alan Greenspan might have called "irrational exuberance." Now, as prices stabilize and demand returns to normal, new houses sit empty.

Much of this demand was fueled by the rise of exotic subprime mortgages. Nationally, subprimes make up only about 15 percent of housing loans. And 80 percent of them are sound. So not all subprimes are "bad."

But a few years ago we began worrying about first-time homebuyers taking out unsafe mortgages without understanding the risks. Many were enticed by low "teaser" interest rates that have since doubled or tripled.

Here in Texas, 38 percent of outstanding subprime mortgages have adjustable rates. And the percentage of ARMs with past due payments is far higher than average.

We clearly see the problem. And we are working to solve it.

Let me tell you about the Federal Housing Administration, which is a part of HUD. It was started during the Great Depression to stabilize the housing market. It is doing the same thing today.

FHA-backed loans are designed for low- to moderate-income borrowers and first-time homeowners. And they are safe-no crazy teaser rates; no balloon payments; no tripling, crippling ARMs.

The FHA will help an estimated quarter of a million Americans keep their homes over the next year, by enabling them to refinance out of their current mortgages.

Still, we must do more. We need legislation to modernize the FHA.

Our bill didn't make it last year. I was pleased when the House of Representatives passed it overwhelmingly last month. It recently passed out of the Senate Banking Committee as well. I am hopeful the full Senate will take it up soon. I want to thank Sen. Hutchison for her support.

The legislative changes would help some 200,000 families, if not more, purchase or refinance into safe and affordable FHA-insured mortgages.

And it would allow the FHA to be more responsive to the housing market. It would be extremely helpful in Texas, one of our best markets.

The FHA is 73 years old. It's helped over 34 million Americans buy a home. But it needs to be brought into the 21st century. With the legislation and our own administrative changes, FHA can reach nearly 800,000 single-family homeowners nationwide over the next fiscal year.

Clearly, the housing sector could use a boost of confidence. It needs reassurance that we're on the case.

Several weeks ago, Treasury Secretary Paulson and I met with mortgage industry representatives to find new ways to help struggling homeowners keep their homes. We call it the HOPE NOW partnership.

Eleven of the largest mortgage companies representing 60 percent of all mortgages have joined us, in addition to counselors, investors, and trade organizations.

We will work together to educate homeowners on their options. They have more than they realize.

HOPE NOW is the perfect complement to our housing counselor program. This is a real success story. Our housing counselors are helping potential homeowners of every income level and cultural background learn their rights and responsibilities.

We want consumers to understand the fine print before they sign on the dotted line.

President Bush has increased funding for this program by 200 percent since 2001. Last week, we announced another $43 million in new grants. It's worth it!

We want all Americans to learn the benefits of homeownership, including financial security and improved health, and education. American home equity has grown from $6.6 trillion in 2000 to $10.9 trillion in 2006. This is good for families. And it's good for the business community.

For me, economic development is always a priority, never an afterthought. I learned that lesson at the Dallas Housing Authority. It's just as true today. You cannot have a climate hostile to businesses but friendly to homeowners. It just doesn't work.

We're doing a lot. But there are some things I cannot do alone. I need you to participate.

I know, you may not be ready to buy a home. That's OK. Just remember, the time to prepare for homeownership is now.

You may not realize it, but more and more young people are buying a home. The number of homeowners under age 25 has risen from 15 percent in 1993 to 25 percent in 2006. Proof that the American Dream is alive and well.

The foundation of homeownership remains good values. Hard work. Thrift. Living within your means. Staying out of debt.

So let's do this together. While we work to save taxpayers money, I need you to save a little bit each month for your future. While we work with the mortgage industry, I need you to communicate with your creditors.

The choices you make today will determine your future.

Will you be playing catch-up the rest of your life, digging yourself out of financial holes? Or will you use these days as a springboard for much greater things?

As successful young professionals, I know you have the energy and vision to make the right choices. You've done it before.

I know you can see yourself in a home of your own. It's the American Dream that benefits all Americans.

Thank you.

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