DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/1536040
MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 12 June 2025 C O V E R S T O R Y THE VANISHING DREAM OF HOMEOWNERSHIP? Soaring prices, limited supply, and rising rates have pushed the American Dream out of reach for millions. Can the industry help bring it back? B y P H I L B R I T T F or generations, homeowner- ship has symbolized stability, prosperity, and a stake in the American Dream. Yet for millions of Americans today, that dream feels more like a mirage. With home prices soaring, inventories shrinking, and mortgage rates rising, first-time buyers—especially those from low- and moderate-income backgrounds—face an uphill battle. The traditional path to owning a home is now marked by economic roadblocks, systemic barriers, and increasing uncertainty. Despite these challenges, a grow- ing coalition of lenders, nonprofits, policymakers, and financial institutions is working to turn the tide. Through innovative programs, targeted assis- tance, and education initiatives, these groups aim not just to reopen the door to homeownership, but to rebuild the bridge leading to it. A Challenging Landscape H omeownership peaked in 2004 at 69.2%, noted Rod See, Corner- stone Capital Bank SVP and Managing Director of the Community Lending division at Cornerstone Capital Bank. "In addition to strong job growth and rising household income, the increase was driven by government initiatives to expand access to homeownership such as relaxed lending standards and expanding mortgage products such as adjustable-rate and subprime loans. The government also promoted homeowner- ship as part of the 'American Dream."' In 1995, President Bill Clinton launched the National Homeownership Strategy, which had a goal of increasing homeownership by 8 million house- holds by the year 2000. This initiative involved a partnership between public and private entities to address home- ownership barriers among low- and moderate-income families, minorities, and other groups. The strategy focused on reducing costs, increasing financing availability, and simplifying the home- buying process. However, the aggressive push to drive homeownership also contributed to the mortgage crisis less than 15 years later. The homeownership rate declined to a low of 62.9% in 2016 and now stands at just over 65%. The major challenge with home- ownership hasn't been at the high end, or even with what are today considered moderately priced homes, but at the lower end of the housing market. According to Realtor.com, the average cost of a starter home today is just north of $300,000, nearly double what it was 10 years ago. Moreover, according to Zillow, there are 233 cities in which the price of entry-level homes exceeds $1 million. Costs for starter homes, and housing in general, continue to increase for a couple of reasons—the supply of hous- ing is limited, and the costs of building materials keeps increasing. According to the 2025 FHLBank of Chicago Targeted Community Lending Plan, the current affordable housing shortage can be traced to the overall de- P H I L B R I T T started covering mortgages and other financial services matters for a suburban Chicago newspaper in the mid-1980s before joining Savings Institutions magazine in 1992. When the publication moved its offices to Washington, D.C., in 1993, he started his own editorial services room and continued to cover mortgages, other finan- cial services subjects, and technology for a variety of websites and publications.