Congressional supporters of Fannie Mae and Freddie Mac accepted extraordinary moretgage risks in order to facilitate the American dream of home ownership. Did they succeed?

With the drop in home values many American home owners saw their home equity drop seriously. We have increased the number of home owners, but destroyed much of their home ownership equity, including many who had financially sound down payments and risk profiles.

Steven Manlanga in “Driving Off Another Mortgage Cliff” at RealClearMarkets notes another observation.  The push to subsidize risk had little impact on homeowners over 44 years old and only slightly more impact on homeowners between 35 and 44. The big gain was in households headed by someone under 25 years old. In that group ownership rose to 25% from 19%. In the age group  between 25 and 29 ownership rates rose from 39% to 41%.

In other words it appears the the dream of home ownership was not being denied, it was just being delayed.  And this extraordinary risk that was thrust on the taxpayers only succeeded in accelerating the American dream for our youngest adults by a few years.

Tips to Douglass Ott