Moreover, the time is right for the FHA to return to providing insurance on mortgages for condominiums, a significant part of the market for young buyers. Fifteen years ago, the FHA supported the purchase of nearly 100,000 condos. In the past 12 months, the agency has supported just 17,000 condo purchases.
The FHA knows that first-time purchases are declining. In fact, the agency recently launched “Homeowners Armed with Knowledge,” a pilot program for pre-purchase counseling that targets first-time buyers. While this is a good first step, it will take more than homeowner education to solve this problem.
The housing sector is on the mend, but outdated government policy—along with a struggling economic recovery—is keeping the aspiring first-time buyer on the sidelines. The opportunity is in plain sight, and the time for action is now.
Richard A. Smith is chairman, chief executive officer, and president of Realogy Holdings Corp. A member of the Business Roundtable, he serves on the housing commission of the Bipartisan Policy Center and the policy advisory board of the Harvard Joint Center for Housing Studies.
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