Home ownership still has a long way to go before it reaches the point at which everyone who wants to hold title to the roofs over their heads is satisfied.

While most observers agree that 100 percent ownership is not attainable, if only because some people will always prefer to rent, Fannie Mae Vice Chairman Jamie Gorelick raised the bar considerably last week, offering that 75-80 percent can now safely be considered a "natural resting place" for the ownership rate.

That's far above the current ownership rate of almost 68 percent. It's even more than the 70 percent that former Fannie Mae Chairman James Johnson suggested was the saturation point a decade ago.

But Gorelick, noting that it's now easier than ever for families who want to own to obtain financing, said she's "very optimistic" that the nation's ownership rate will be "north of 71 percent" by the end of the decade. And it may not stop, she said, until it hits 80 percent.

"We've changed the definition of readiness," she explained, referring not only to the shift away from traditional underwriting guidelines and hefty downpayment requirements but also to the new-found national resolve to raise the ownership bar.

"As a society, we've made a big bet on housing, and I don't think that policy will ever change because it's been so good for the fabric of our national life," the Fannie Mae official said.

Gorelick made her remarks during an opening morning session at a mortgage conference in Chicago. The session was billed as "a conversation with the four tenors of housing finance." The discussion was moderated by former FHA Commissioner Nicolas Retsinas, who is now director of the Joint Center for Housing Studies at Harvard University, and included Paul Peterson of Freddie Mac, Ginnie Mae President Ronald Rosenfeld, and Alex Pollock, president of the Federal Home Loan Bank of Chicago.

All the speakers represented government sponsored organizations designed to keep the money flowing so lenders will always have an endless of funds for housing.

Gorelick indicated that she expects the ownership rate to start climbing higher in the near future.

"Now that we're coming off a refinancing boom," she said, "lenders can begin focusing on serving the markets they tended to forget or dismiss" when they had all the business they could handle.

"We're on a wonderful trajectory that has tremendous possibilities for our country," she said, adding that the desire for ownership is driven not only by "a real nesting instinct" but also the fact that the "real wealth" of most households rests in their homes, not the stock market.

Other panelists tended to agree with Gorelick's assessment, saying that even an economic downturn wouldn't pop the housing bubble.

Ginnie Mae's Rosenfeld was one who's not particularly concerned about the recent increase in delinquency rates, even though so many of today home buyer's are highly leveraged.

"It's not a matter of great concern," he said. "These are fundamentally good people who are experiencing short-term bumps in the road. We might have to recycle some houses, but at the end of the day, we believe we're on the right track."

In the overall scheme of the things, the new Ginnie Mae president added, rising default rates are "not significant. People who are marginal credits today will one day be seen as very good credits."

Peterson, who is executive vice president for single-family business at Freddie Mac, said "there's a lot of opportunity for housing to remain robust." While housing prices will "from time to time" become out of line in a handful of places, he said, the market overall will remain "very steady."

The Freddie Mac executive also pointed out that even if the economy remains healthy, delinquencies would rise, as they always do, as the loans become seasoned.

Traditionally, the percentage of defaults rises for the first few years before peaking in the fourth of fifth year as people who were financially sound when they applied for funding experience major illness, unemployment and divorce.

"The only thing that would prevent (the inevitable run up in delinquencies) would be another couple of successive waves of refinancing," he said. "But even with that, it will only delay it again."

Published: April 17, 2002

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.