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Family holding green paper houseFollowing on the heels of President Barack Obama’s second-to-last State of the Union Address, during which he made a passing reference to the changes made at the Federal Housing Administration (FHA), HUD Secretary Julián Castro sat down at the Newseum in Washington, D.C., for a live fireside chat with Zillow Chief Economist Stan Humphries on Wednesday, January 21.

The event, which garnered a lot of buzz across various social media platforms (the general public was encouraged to submit questions using the #HousinginAmerica hashtag) took a closer look at some of the more prevalent themes on the minds of today’s homeowners, buyers and renters.

“The President did an excellent job of laying out the case for investing in the middle class to ensure that more folks are able to reach the middle class,” says Castro, of Obama’s January 20 State of the Union Address. “And when it comes to the values that have made it possible for folks to be middle class and reach the American Dream, one of those is the opportunity for homeownership.”

In fact, for FHA and HUD, a big part of this has been the announcement of the mortgage insurance premium reduction, which, over the next three years, will offer an average savings of $900 annually to two million folks.

“Things like child care and sick leave and equal pay; things like lower mortgage premiums and a higher minimum wage—these ideas will make a meaningful difference in the lives of millions of families,” said Obama, as he referenced the housing economy in his latest State of the Union Address.

“I call 2015 the year of housing opportunity,” says Castro, who notes that the market has turned around in terms of housing starts with a 5.5 percent increase year-over-year. While price increases are beginning to level off, a lot of opportunity has been created.

And it’s clear to see that housing is top of mind for many Americans. Here’s a breakdown of what was discussed during Wednesday morning’s fireside chat.

Rental Side and Its Effect on Getting into Buying Side
“2015 is going to be an exciting year for housing,” says Castro. While rent is typically an encumbrance for folks who are trying to save up for a down payment, there are things in play that will ultimately make it more affordable to get a loan. When you combine the mortgage insurance premium reduction, leveling off of home prices, cooling of rents in certain areas, lowering of gas prices and the improving economy, all of these things add up to more money in people’s pockets to go from renting to buying. “I also anticipate more millennials getting off the sidelines and moving forward with their home purchasing decisions,” says Castro.

Options for Those with Little to No Credit
A few years ago, getting a home loan was too easy, and today, it’s often too difficult for many prospective buyers to obtain a loan. While the FHA introduced a blueprint for access to credit in May 2014, Castro notes that they’ll continue to think through ways to be more helpful in this regard. “The blueprint for access to credit provides certainty for lenders and borrowers while helping lenders ease up on credit overlays,” says Castro. “We also have safeguards in place so that we can offer opportunities to those ready to own a home without sliding back to where we were before.”

Student Debt
There’s no denying that rising student debts have an impact on the decisions folks make when it comes to their real estate aspirations. But Castro notes that it’s important to address debt in a smart way, whether it’s refinancing student loans or deferring them out. “The President’s proposal for free community college is also important as it unleashes potential brainpower. Buying a home is about building equity and wealth that you’ll have with you for the long haul, so I encourage folks to be smart about student debt and understand that investing in a home will ultimately create wealth.”

Older Americans Heading Toward Retirement with Debt
“As much as we focus on millennials, the fastest growing segment are folks over the age of 65,” says Castro. When dealing with these Baby Boomers, Castro notes that there are a few different ways to be helpful, including housing counseling and reverse mortgage programs that let them borrow off the equity in their home.

Optimal Homeownership Rate
In the 1930s, homeownership rates were around 40 percent, and today, they’re hovering around 70 percent—a point that was reached in the ‘60s. “The difference between where we are now and where we were at the height is five to six points,” says Castro, who goes on to explain that homeownership isn’t right for everyone. “I believe it makes sense for more Americans to have the opportunity to own a home as it’s the primary source of wealth for many.”

Optimal Level of Government Involvement
While Castro supports the notion of having more private capital in the market, he notes that the FHA has played a vital role in helping provide stability and opportunity within the housing market, especially for first-time buyers. “We’ll see this continue to come down as more private capital comes into the market, but I do believe that government has a role to play. In addition, the FHA played a role in building the homeownership rate to where it is today, and I hope this role continues.

“The President’s focus on ensuring folks have the opportunity to own a home and be middle class is right down the line of what we’re focused on at HUD,” concludes Castro.

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