Obama Administration Rolls the Dice With Millennial Housing Policy

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By Jacob Maslow

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Young Teacher

The recent decision by the U.S. Federal housing officials to loosen lending standards in boosting home ownership seems aimed squarely at millennials. Millennials are a demographic anomaly among American aged cohorts. The traditional model of American home ownership is that an adult child leaves home at 18, goes to college, gets his/her first job, and rents an apartment for a few years. After a few years, this person settles down and buys his/her first home. After that, they upgrade to a bigger home, and then an even bigger home until they retire. Pretty straightforward, this is the standard script of the great American dream.

Well, the great financial crash has changed all that. In fact, the housing pattern of the millennial generation is completely different from the housing pattern of the past. Millenials are more than happy to move back into mom and dad’s basement or simply rent. The whole idea of home ownership is completely foreign to them, and in many cases, completely undesirable. You have to remember that, in the wake of the 2008 financial crash, so many Americans lost their homes to foreclosure. This was not only a financial disaster. This was also an emotional roller coaster, and it posed tremendous personal challenges to Americans of all stripes.

The Obama administration knows that if it wants to get the economy on a more solid footing that would be sustainable, it had to stimulate home ownership. The problem is on how it can do this without reviving some of the failed housing and lending policies of the past. Unfortunately, it appears that the administration threw all caution to the wind and chose to resurrect a lot of the lending policies that had led to the first housing crash. Would this be enough to spur a great housing boom among millenials? It is anyone’s guess. What is indisputable, however, is that the same financial forces that led to such pain in the past might be now at play.

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