WASHINGTON, Oct. 27, 2015 /PRNewswire/ -- Millennial decisions about homeownership will have significant impact on income inequality in the United States for generations to come, according to U.S. Secretary of Housing and Urban Development Julián Castro and realtor.com® Chief Economist Jonathan Smoke who participated in a town hall before an online audience and graduate students at the George Washington University. Realtor.com® is a leading online real estate destination operated by News Corp [NASDAQ: NWS, NWSA; ASX: NWS, NWSLV] subsidiary Move, Inc.
Full video of the event, held on Oct. 26, is available here: realtor.com/townhall
Moderated by The Wall Street Journal's Economics Correspondent Nick Timiraos, Secretary Castro and Smoke addressed the economic trends that have impacted the homeownership prospects for millennials — once predicted to become a "generation of renters" — and the challenges that remain. Secretary Castro and Smoke also answered questions submitted by Twitter and Facebook users.
Millennial sentiment regarding homeownership:
"About 30 to 40 percent of the jobs created have gone to millennials over the last two years," said Smoke. "It's so 2012 to say these folks are down on their luck and stuck with mom and dad. About half of this year's growth in sales is coming from first-time home buyers."
He added, "I would characterize what I see and hear [from millennials] like this, basically [millennials] believe in homeownership and long term [millennials] can see [themselves] owning a home. [Their] problem is that in the short term [they] can't see [their] direct path there because [they] have these other challenges impacting [them]."
Tight mortgage lending standards and FHA:
"The story of the last couple years has been that for...responsible folks it has been too difficult to get a home loan," said Castro. "So the question is how do we maintain the safeguards we have in place, but also open up the credit box so more folks, including millennials, get a chance to own a home."
Castro said, "Both on the affordability side and on the access to credit side, FHA is doing some good things. Earlier this year, the Federal Housing Administration announced a reduction in annual insurance premiums. This action will help millennials and families save an average of $900 annually."
How homeownership impacts income inequality:
"Generation after generation, the primary vehicle to create wealth in our country has been through homeownership," said Castro. "We don't need to go back to where we were before, but we do need to have sensible and strong policies in place that offer good opportunity for responsible borrowers."
"In the U.S., homeownership has provided an opportunity for one generation to hand over to the next that opportunity and that wealth," added Castro. "Particularly for folks of modest means and minority communities, this is an even bigger deal because traditionally minority communities have not had the same homeownership rates."
Education and reform are imperative
"The good news that happened over the last few years is the strong investment that has been made in housing counseling," said Castro, adding HUD works in conjunction with 2,400 agencies to provide housing counseling to help consumers understand the obligations and responsibilities that go along with homeownership and how they can prepare themselves for homeownership.
"One of the fundamental issues for younger households today is the fact that we're still using a credit score process and standards that were essentially defined when many of them weren't alive yet," Smoke commented. "The documentation really needs to catch up to the 21st Century," he said, adding that many millennials earn their income from companies such as Lyft or Airbnb, which isn't acknowledged when applying for a mortgage, because "it doesn't qualify as three years of consistent employment."
About Move, Inc. and realtor.com®
Move, Inc. operates the realtor.com® website and mobile experiences, which provide buyers, sellers and renters of homes with the information, tools and professional expertise they need to discover and create their perfect home. News Corp [NASDAQ: NWS, NWSA; ASX: NWS, NWSLV] acquired Move in November 2014, and realtor.com® quickly established itself as the fastest growing online real estate service provider in the first half of 2015 as measured by comScore.
As the official website of the National Association of REALTORS®, consumers know they can look to realtor.com® for the most comprehensive and accurate information anytime, anywhere. With relationships with more than 800 multiple listing services (MLS), realtor.com® has more than 3 million for-sale listings, which account for more than 97 percent of all MLS-listed for-sale properties. More than 90 percent of the listings are updated every 15 minutes. Move's network of websites provides consumers a wealth of innovative tools, including Doorsteps®, Moving.com™, SeniorHousingNetSM and others. Move supports real estate professionals by providing many services to grow their businesses in an increasing digital, on-demand world, including ListHub™, the nation's leading listing syndicator and centralized intelligence platform for the real estate industry; TigerLead®; Top Producer® Systems; and FiveStreetSM and Reesio as well as many free services.
This document contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's views and assumptions regarding future events and business performance as of the time the statements are made. Actual results may differ materially from these expectations due to changes in global economic, business, competitive market and regulatory and other factors. More detailed information about these and other factors that could affect future results is contained in News Corp's filings with the Securities and Exchange Commission. The "forward-looking statements" included in this document are made only as of the date of this document and we do not have any obligation to publicly update any "forward-looking statements" to reflect subsequent events or circumstances, except as required by law.
Lexie Puckett, realtor.com, 805-557-3151
Erika Rendón, U.S. Department of Housing and Urban Development, 202-402-2082