PARALLEL UNIVERSE: Obama's Economic Message on the Right Track --- Except for Pushing Homeownership

By David M. Kinchen
 All in all I approved President Obama's economic issues address Wednesday, July 24, 2013 at Knox College in Galesburg, IL (not "Galesville" as CNN had identified the city on a screen text), except for the point he made about homeownership being one of the  cornerstones of a middle class lifestyle.


 I beg to disagree Mr. President: I think homeownership is great for those who qualify for the position, but there's nothing wrong with renting -- as we've done for the past five years after more than 30 years as homeowners.


  Here's the text of the president's address in Galesburg, birthplace of poet and author Carl Sandburg and one of the most attractive and historical cities in my home state of Illinois:  


Coincidentally, on the same day as the address, the U.S. Census Bureau and the Department of Housing and Urban Development issued a report on June new home sales, up sharply from the previous month and from June 2012 -- and at the fastest pace in five years. Link:


  Lest the casual observer believes all this good news presages the start of another bubble, the Irvine, CA-based housing analytic firm of CoreLogic insists the latest recovery is not another bubble. Link:


  My point -- and I want to emphasize that  I'm not against homeownership per se for those who can afford it -- is that the federal government has no business pushing homeownership, especially when the free market shows that those who want to buy a new or existing house are, in the classic real estate phrase: "Ready, willing and able."  


The numbers for both new and existing houses and how they've improved since the meltdown began more than five years ago speak for themselves. Homeownership has advantages for many people, but renting gives the family greater flexibility to go where the jobs are without being tied down to a house. For my story on existing home sales from the National Association of Realtors, which shows that despite a minor slip, sales have been sustaining an excellent pace for the past two years: Link:


  The  president mentioned reforms in housing finance, a subject that is currently under consideration by Congress. My preference would be to emphasize FHA and VA and sell off Fannie Mae and Freddie Mac, but others have differing views on this subject. I think Fannie and Freddie are too dependent on taxpayer bailouts. With a healthy housing industry, both Fannie and Freddie are better off as heavily regulated private entities. I'm not a casual observer of the real estate scene: I've been covering real estate, housing and construction for daily newspapers -- and this site -- since 1970 and I'm past president (1984) of the National Association of Real Estate Editors.    
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