The Department of Housing and Urban Development is aiming for a 70 percent home ownership rate by 2006, a goal some observers believe is unreachable. To meet the federal government's newest target, an estimated 3.8 million more families would have to join the ranks of the 70.8 million households who already own the roofs over their heads.

"Is it doable? Yes. But are we going to get there? No," says David Lereah, the new chief economist at the National Association of Realtors.

To boost the ownership rate by 3 percent, the current ratio was at a record 67.2 percent at the end of the second quarter. Lereah points out that interest rates have to remain low and the economy must stay strong for six more years. And that, the economist, believes is "extremely doubtful."

"We've already been pretty fortunate over the past six years," Lereah says. "The goal is certainly worth pursuing, but six more years is a long road."

Douglas Duncan, Lereah's counterpart at the Mortgage Bankers Association, doesn't think the chances are very good, either, explaining that large numbers of households have already become owners earlier than normal because of significantly more favorable loan terms and easier qualifying standards.

"They're not going to be buying because they already have," the MBA economist said. "They may be buying up, but they won't be adding to the ranks of home ownership. So it's going to be a stiff challenge."

HUD admits its objective is a "bold target." But in a draft of its latest six-year strategic plan which must be delivered to Congress by Sept. 30, it says the goal can be reached by reducing the ownership gaps between minorities and whites and between lower and higher-income families.

If the ownership gaps between minority and non-minority families and low-income and higher income households were trimmed 15 percent and 25 percent, respectively, the Department says, the 70 percent target could be reached.

At last count, 73.4 percent of all white households were home owners as compared to 47.2 percent of African Americans and 45.4 percent of Hispanics. Also, the ownership rate is suburbia is 73.8 percent vs. 50.7 percent in central cities, and the rate among households earning less than the median family income is 50.8 percent.

HUD's new plan, which sets the direction for the Department's policies, management and budget resources over the next six fiscal years, promises to reduce the disparities in ownership rates among racial and ethnic groups by earmarking a larger share of FHA-insured loans to minorities, first-time buyers and buyers in central cities.

HUD said it will chase the objective by, in part, increasing the availability and affordability of FHA mortgages and be placing even greater affordable housing requirements on Fannie Mae and Freddie Mac, the two secondary mortgage market companies which channel most of the money for home loans to local lenders.

Other strategies include convening home ownership fairs and recruiting local business, government and non-profits to help in the effort. Fairs "have proven a valuable tool to increase understanding of the home buying process and to motivate saving for downpayments," the draft report says.

The department also intends to continue promoting new technologies that reduce construction costs, and use grants to support new construction and rehabilitation on a case-by-case basis.

The current target, which was set several years ago, is to achieve a 67.5 percent ownership rate by the end of this year.

Published: September 5, 2000

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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.