Current Economic Conditions Of The Usa Is Characterized By Slow Growth And Deteriorating Household Net Worth

1095 Words5 Pages
The scenario for current economic conditions in the USA is characterized by slow growth and deteriorating household net worth. Although strict lending standards and tight credit are presenting sobering challenges to latent homeowners with low incomes, incomes shrinking and rent inflation have been experienced by renter households since the economic recession, and there has been a rise in the number of renters among the severely housing cost-burdened. [1] The price of houses is not within reach for many families because they do not have sufficient cash for down payment and closing costs. Moreover, they cannot pay down debts; their credit scores are low, and they have higher borrowing costs. Since the 1980s, federal government policies have…show more content…
It is not that the financial gain is the only reason a majority of American households aspires to own a home; homeownership has also to do with social benefits and these benefits relate to greater satisfaction in life. Low-income families overcome wealth barriers through affordability assistance such as down payment assistance, stipend, subsidies, and vouchers of homeownership, releasable loans, and soft second mortgages and achieve favorable debt-to-income ratios by keeping monthly payments low. Assistance in small amounts of down payment increases the rate of a chance for moving first-time buyers into homeownership. There is a conclusion in A 2005 HUD which says that the small amounts of similar down payment assistance can be very effective in helping renters to become homeowners and as less as $1,000 can result in a 19-percent increase in the number of low-income households buying a home. As the level of assistance rises, the size of the increase declines, and assists up to $10,000 lead to a 34-percent rise in overall homeownership, although there is a greater effect on underserved groups and in low-income homeownership, there is almost a 41-percent increase [5]. There is an alternative form of assistance to low-income homebuyers and purchase on a lease is available through HOME, CDBG, and Housing Choice Voucher Homeownership funds. Preparation for Homeownership House counseling is yet another approach to affordable, sustainable homeownership. By making

More about Current Economic Conditions Of The Usa Is Characterized By Slow Growth And Deteriorating Household Net Worth

Open Document