The housing market has shown signs of life recently. Prices have risen, mortgage rates are very attractive and construction is reviving.
But recall where the market has been over the last 20 years and you’ll start to see a less cheerful picture. In fact, from a longer perspective, it appears that the housing market, as it stands now, isn’t stable or sustainable. It is, arguably, still on artificial life support.
Return for a moment to November 1994. That’s when President Bill Clinton told the National Association of Realtors that many more Americans should own their own homes, because homeownership went “to the heart of what it means to harbor, to nourish, to expand the American dream.” He called on the nation to embark on a public-private effort to lift the homeownership rate, which then stood at just above 64 percent.
In Mr. Clinton’s vision, so-called government-sponsored enterprises — the mortgage-financing giants known as Fannie Mae and Freddie Mac — were to play an outsize role in providing affordable home mortgages to ever-widening groups of people.
