In light of the current administration’s dogged attempts to revamp rather than phase out mortgage giants Fannie Mae and Freddie Mac, Hank Paulson, former Treasury Secretary, opines that once the housing market has stabilized incentives for home ownership over other investments should be “rolled back,” he wrote in a Washington Post op-ed last week[1]. Paulson, under whom Fannie and Freddie were put into conservatorship as part of the stimulus efforts, stated that the companies’ “massive investment portfolios should be wound down” and that the “central place of home ownership as part of the American dream reflects a bias of our society that is unlikely to simply end.” He went on to state that home ownership has been “overstimulated to the point that it was unsustainable and dangerous to the broader economy.”
Given the number of people currently in mortgages and homes that they cannot – and never could – afford, I’m inclined to agree with him. However, the idea that home ownership or property ownership as an investment should be de-emphasized by the federal government seems to pose an impending threat both to would-be homeowners and to real estate investors.
Do you think that this de-emphasis of home ownership would be a good thing? Where do you think owning one’s own home should be located, if anywhere, in the schema of the “American Dream?”
Thank you for reading! Your comments and questions are welcomed below.
[1] http://blogs.wsj.com/developments/2010/07/30/paulson-revamp-homeownership-policy-after-housing-market-stabilizes/
